ECU
European Currency Unit.
EMU
European Monetary Unit.
Equity
The risk-sharing part of a company’s capital, usually referred to as ordinary shares.
ESOP
Employee Share Option Plans can either be approved or unapproved for taxation purposes. A typical plan for a multi-national company may well be set up in an offshore centre and therefore be unapproved by any particular onshore taxation authority.
For example, a multi-national corporation with employees in, say 20-30 countries may well decide to set up an unapproved scheme offshore. However, in certain circumstances, case law can provide that contributions to the scheme, which are utilised to buy shares in the sponsored equity company, may be tax deductible expenses in the books of that company.
Eurobond
A bond issued in a currency of that other than that of the country or market in which it is issued. Interest is paid without the deduction of tax.
Exchange Control or Restrictions
Limits on free dealings in foreign exchange or on free transfers of funds into other currencies and other countries.
Expatriation
The removal of ones legal residence or citizenship from one country to another in anticipation of future restrictions on capital movements or to avoid estate taxes.
Fiduciary Account
An amount typically deposited with a Swiss Bank which will redeposit the sum with a third party bank outside Switzerland in its own name (to overcome Swiss withholding tax on interest).
Fixed Interest
Loans issued by a company, the government (gilts or gilt-edged), or local authority, where the amount of interest to be paid each year is set on issue. Usually the date of repayment is also included in the title.
Flight Capital
The movement of large sums of money from our country to another to escape political or economic turmoil, aggressive taxation or to seek higher rates of interest.
Foreign Currency Account
An account maintained in a foreign bank in the currency of the country in which the bank is located. Foreign currency accounts are also maintained for depositors by banks in the U.S. Such accounts usually represent that portion of the carrying bank’s foreign currency account that exceeds its contractual requirements.
Gearing
A company’s debts expressed as a percentage of its equity capital. High gearing means that debts are high in relation to assets.
GMBH (Ger, Gesellschaft mit Beschrankter Haftung)
In Germany, Switzerland and Austria, a limited liability company in which the liability of the members is limited to amounts agreed contributions, or as stipulated in the Articles of Association.
Grantor Trust
Under U.S. tax law, income of the trust is taxed as the income of the grantor.
Hedge Funds
Speculative funds managing investments for private investors (in the U.S., such funds are unregulated if the number of investors does not exceed one hundred).
Hot Money
- Large quantities of money that move quickly in international currency exchanges due to speculative activity.
- Foreign funds temporarily transferred to a financial centre and subject to withdrawal at any moment.
Hybrid Companies
A hybrid company is a company having various classes of membership which typically can comprise registered stock, guaranteed membership and unlimited membership. The guarantor member being liable to contribute to the company a stated sum in the event of insolvency or liquidations, whilst an unlimited member, as the name implies, has no limit on his liability relating to the debts of the company in the event of an insolvency.
Insider Dealing
A criminal offence involving the purchase or sale of shares by someone who possesses ‘inside’ information about a company’s performance and prospects which is not yet available to the market as a whole, and which if available might affect the share price.
International Business Company (IBC)
A term used to define a variety of offshore corporate structures. Common to all IBCs are its dedication to business use outside the incorporating jurisdiction, rapid formation, secrecy, broad powers, low cost, low to zero taxation and minimal filing and reporting requirements. An increasing number of offshore jurisdictions are permitting the use of bearer shares, nominee shareholders, directors and officers.
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