Offshore financial centres in the global corporate ownership network

Khomenko V., Nisimov R., Abramov V.

Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. Offshore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identification of OFC jurisdictions has become a politicized and contested issue. In this article reflects a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million firms (nodes) are connected through 71 million ownership relations. Against the idea of OFC as exotic small island that can be hardly regulated, we determine that many sink and conduit states are highly developed countries.

Keywords:offshore financial center; sink; conduit; corporate ownership.