A longer version of earlier musings at Forbes.
It is this that explains much of the round tripping in and out of Cyprus to and from Russia. Not taxes at all: but the desire for a stable legal system with honest courts and where property rights mean more than being in political favour. And I’d be prepared to make the case that similar things matter in Mauritius and elsewhere.
It was PJ O’Rourke who said that you should never let the government be the people with all the money and all the guns. Which goes a long way to describing why people like these offshore jurisdictions. It’s not that they are outside the tax jurisdiction so much as that they are inside a different legal jurisdiction.
In short, it’s a lot more difficult for the mafia or the government, to the extent that these are different organisations, to steal stuff if it’s legally in somewhere where they don’t control the legal system.