The common reporting system (CRS) is an example of global regulators working together, something that has been increasingly discussed. It was developed in response to a G20 request and approved in 2014.
The system "calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis".
One example is Indonesian money, which has historically been managed in Singapore, Corrigan said. Now the clients have two options: either voluntarily report to the authorities before the reporting system begins to come into effect in 2017 or wait until local financial instituions relay information to the client's home country. The latter might imply heavier penalties.
China's offshore capital
In China, the CRS comes into effect in 2018.
The CRS calls for governments from over 100 countries to report to Chinese tax authorities "the details about most of the bank and other accounts that Chinese residents have in those countries", according to a report by Jersey Finance.
In the past, wealthy individuals from the mainland tended to put their assets in Hong Kong, if, for instance, they wanted to publicly list their companies in the SAR. A formalised system for reporting offshore assets was not in place.
Hong Kong has been a traditional gateway for money coming in and out of China. Money flowing into Hong Kong from Chinese HNWIs surged 47% between 2012 to 2014, according to data cited by the report.
Chinese investors have also been attracted to the UK property market, which has far lower valuations now than it did before the Brexit vote due to the collapse of the pound sterling.
“Often what they would like to do is to acquire fixed assets, such as real estate, as part of putting roots down in the new markets, either from a business or personal standpoint, such as children being educated overseas,” Corrigan said.
Then they would start to build out their portfolio to have more investments in property or other asset classes. Chinese investors in the UK tend to be ultra high net worth individuals, he added.
However, Chinese authorities have been cracking down on capital outflows, partly to preserve foreign exchange reserves which are being used to support the RMB.