Number of IFCs set to plummet

No more than a dozen International Finance Centres (IFC) will still be around in a decade's time as offshore jurisdictions come under increasing attack, according to tax experts.

Nick Verardi, partner at Dickinson Cruickshank, issued the warning at a forum organised by the Institute of Financial Services (IFS) Isle of Man centre and the Isle of Man Bankers' Association.

He believes the Isle of Man's salvation lies in diversification, but adds its has a "long way to go" as it fights to survive attacks on offshore jurisdictions made by international leaders such as Obama and Sarkozy.

Verardi says there will be no more than 12 IFCs in a decade's time, but the Isle of Man will be one of them. "The future's still bright, but we've a lot of work to do," he adds.

Isle of Man Finance director John Spellman says the financial services sector will look "very different" in five years' time and will be marketing solutions rather than products.

He describes G20 as "a process, not an end in itself" and calls for the development of a robust consumer protection strategy.

Spellman says zero tax "was never going to be enough" to guarantee the island's survival.

Chris Corlett, chief executive of the Department of Trade and Industry, adds: "Zero tax as a marketing tool is dead."

"What is important to help secure the island's economic survival is to show you're a good international citizen," he says.

Corlett believes the Isle of Man must become an international business centre and recognise its customer profile is changing from UK to globally-focused, in order to prevail.

He says clients seek "a breadth and depth of experience". Currently some firms choose to set their operations up on the island, yet send much of their banking and insurance business elsewhere. To stem this "leak", the island must develop "a holistic offering," he says.