TTN Hong Kong conference Jonathon Clifton Group Managing Director - OIL

Transcription

1 TTN Hong Kong conference 2016 Jonathon Clifton Group Managing Director - OIL

2 Today s topics 1. Underlying demand Offshore vs Mid-shore Client segments Top key usages Growth markets over the next 5 years 2. Key constraints 3. Regulatory overview 4. Jurisdictional results 5. Industry consolidation drivers 6. Summary

3 What impact will the convergence of new regulations + negative PR have on underlying demand? 52% 41% 36% 30% 28% 7% 4% Adverse Adverse impact on impact overall demand on for offshore services overall demand for offshore services Demand Demand remain unchanged remain with switching among jurisdictions unchanged with switching among jurisdictions Demand for offshore for offshore services will increase due to underlying services economic activities will increase due to underlying economic activities No change in underlying market No change in underlying market

4 Is offshore in Asia losing out to mid-shore? Jurisdictional New Incorporation Volume (in 000) Mid-shore (Hong Kong & Singapore only) Offshore (The BVI, Cayman Islands, Samoa, Seychelles, Mauritius, Anguilla, Jersey & Guernsey) * 4

5 The New Normal? Less quantity, more quality? Offshore jurisdictions active companies volume* (in 000) P *Offshore jurisdictions consist of: the BVI, Cayman Islands, Jersey, Guernsey, Seychelles, Mauritius and Anguilla 5

6 Client segment driving growth in the next 5 years (Asia vs ROW) Entrepreneurs/High Net Worth Individuals 48,6% 43,9% Hedge Funds/Private Equity Family Offices Multinational Corporations Medium Sized Enterprises Small Private Companies 12,2% 8,6% 11,4% 12,2% 5,7% 7,3% 2,9% 4,9% 22,9% 22,0% Asian Market Non Asian Market 6

7 Top Key Usage Greater China 2015 Asset protection 41% Investment holdings for corporate 39% Wealth management 39% Special purpose vehicles 21% Listing vehicles for initial public offerings 21% Individual tax planning 12% Funds management 8% Tax planning for companies 8% Trading for corporate 8% 7

8 Growth markets over the next 5 years

9 Key Business Constraints 2015 New regulations 4,0 Competition and pricing 3,9 AML/KYC processes Opening a bank account using an offshore company 3,6 3,6 The industry s PR problem 3,3 Information leaks eroding client confidence 3,3 Lack of qualified staff 3,3 Double tax treaties and information exchange 3,2 Higher taxes 3,1 9

10 Which of the following are likely by 2020 and, which new regulations will cause the most impact? 72% % 59% 42% 29% 36% 17% 17% 16% 7% 5% Full implementation A central (nonpublic) A central registry of tax) Uniform regulation global such Uniform global (non- of common Full reporting implementation standards beneficial (non-public) ownership as (non-tax) licensing of of CRS regulation Corporate Service such Providers registry of BO as licensing of CSPs Global tax Global accounting tax standardisation accounting standardisation Publicly available The end of the use of beneficial Publicly ownership offshore End of structures use of information available BO information the offshore structures Likely impact on business Likely impact on business (Rating of 5, 5 being the most impact) 10

11 Global Enforcement of New Regulations 2015 Consistent and apolitical Others 4% 4% Key countries will navigate exceptions for their own offshore or midshore jurisdictions 38% 54% Political and inconsistent 11

12 Regulation Impact on Internal Operations 2015 Raise the cost of doing business 95% Necessitate more human capital investments 82% Require new investments in IT capabilities 76% Create inefficiencies due to KYC/due diligence processes 55% Fundamentally undermine demand for offshore structures 34% 12

13 Jurisdictional importance 2015 Rating out of 5, 5 being most important) Top 10 jurisdictions - Overall The BVI Hong Kong Cayman Islands Singapore Luxembourg Jersey USA UK Netherlands UAE 3,9 3,7 3,7 3,4 2,8 2,6 2,6 2,6 2,2 2,1 Top 10 jurisdictions Asian Markets Top 10 jurisdictions Non-Asian Markets (Excluded Caribbean) The BVI Hong Kong Cayman Islands Singapore Jersey Luxembourg USA UK Mauritius Netherlands 2,7 2,5 2,4 2,3 2,2 2,2 4,1 4,0 3,9 3,7 The BVI Hong Kong Cayman Islands Singapore Luxembourg UAE UK USA Jersey Netherlands 3,8 3,4 3,4 3,2 3,1 2,8 2,6 2,6 2,5 2,2 13

14 Jurisdictional importance - By 2020 (Rating out of 5, 5 being most important) Top 10 jurisdictions - Overall Hong Kong 3.9 Singapore 3.7 The BVI 3.5 Cayman Islands 3.3 USA 2.8 Luxembourg 2.7 UK 2.7 Jersey 2.6 UAE 2.4 Netherlands 2.2 Top 10 jurisdictions Asian Markets Top 10 jurisdictions Non-Asian Markets (Excluded Caribbean) Hong Kong Singapore Cayman Islands The BVI Jersey Luxembourg USA UK Netherlands Mauritius 2,6 2,6 2,4 2,4 2,3 2,2 4,1 3,8 3,8 3,7 Hong Kong Singapore UAE The BVI Luxembourg UK USA Cayman Islands Jersey Netherlands 3,6 3,5 3,3 3,2 2,9 2,8 2,8 2,8 2,4 2,2 14

15 Industry Consolidation Drivers 2015 Regulatory pressure 66% M&A activity driven by Private Equity ownership 49% Expansion of service offerings 46% Scale efficiencies 43% Geographic access to new clients 36% 15

16 We have come a long way together 1. More resilient and adaptive to change 2.Asian demand remains structurally sound 5.Consolidation of service providers continues at pace? 3.Compliance - from administration to revenue generation? 4.The Public Relations battle remains to be won 16

17