International Air Transport Association or International Airlines Travel Agency Network.


Your International Bank Account Number. Check with your bank.

I.B.C. (International Business Company):

A company exempted from tax or from compliance with specified regulations of the jurisdiction in which it is established but not allowed to trade or own real estate there.

IBIT (International Business and Investment Trust):

The IBIT is formed as a Trust in an English Common Law tax haven jurisdiction that does not compel the registration of Trusts. The ownership is controlled by bearer depository receipts for the shares of beneficial interests of the Trust. This eliminates the need for any governmental registration or filing and thus makes the Trust totally anonymous! Click here to order your own 100% anonymous and tax-free International Business and Investment Trust!


International Bank for Reconstruction and Development.


International Civil Aviation Organization.


Short for International Chamber of Commerce, a Paris-based organization that acts as the international forum for national chambers of commerce. The ICC also acts as an arbitrator in many international trade disputes.


International Council for the Exploration of the Sea.


The International Court of Justice.


A small graphic motif on a computer screen that directs the user to a software program.

Idle Capacity:

Industrial capacity that is lying idle for some reason, such as a shortage of Raw Materials or labour, or a lack of orders.


Irish Development Authority.


International Finance Companies.


International Monetary Fund - aims to promote international monetary cooperation and currency stabilization and expansion of international trade. The IMF was designed to enable to enable member countries to borrow from each other in order to iron out irregularities in their exchange rates and reserves. Countries are required to meet strict economic and financial conditions if they want to become borrowers.


Goods or services that are bought by someone or some organization in a country other than the one in which they are produced.

Impulse Buying:

The purchase of goods on impulse; buying something because it has been seen in a shop window rather than because of a predetermined need for it. We buy chocolates on impulse; but rarely diamonds.

Incomplete/Imperfect Gift:

"Equity will not perfect an imperfect gift". Where the settlor does not transfer the property to the trustee the trust is not constituted. Common law rules that the settlor has to do all in his power to transfer the gift in order to create a valid trust.

Incorporation Havens:

An incorporation haven is a country, such as Liberia and Marshall Islands, which has no infrastructure of local attorneys or accountants. It is simply in the business of registering corporations and ships. There are no other services offered and the tax haven clientele never goes there. The registration of new companies is carried out by representative offices in New York, Zurich, Hong Kong, Tokyo, Rotterdam and Piraeus, in the case of Liberia and Marshall Islands.


An incorporator is the person who signs the articles of incorporation. Incorporators may have personal liability for false statements contained in the articles of incorporation.


Within the company or organisation. Doing something in-house means that it is being done by somebody on the company's payroll rather than by an outsider. The opposite of outsourcing.

In Play:

An expression used to refer to a quoted company that is known to be vulnerable to a contested takeover.


A promised reward that motivates an employee to work harder and be more productive. An incentive bonus is a payment made for production that is in excess of an agreed amount.


The monetary reward that comes from the productive use of land, labour and/or capital.

Income Statement:

Called the profit and loss account in the UK, this is the US term for the accounting statement that shows an organisation's revenue and its costs over a period (usually the organizations's financial year), and its resulting profit or loss.

Income Tax:

A tax imposed on individuals or businesses and calculated as a proportion of their income. For most governments it is the largest revenue-earner of all taxes.


The process of obtaining the approval of the authorities to organize and run a corporation. In the United States an organization that is incorporated must include the letters Inc after its name.


Indemnity means to reimburse or compensate. Many corporate directors and officers will require that they be reimbursed for all cost, expenses, and liability which they incur while acting on behalf of the corporation.

Independent Trustee:

A trustee who is independent of the settlor. Independence is generally defined as not being related to the settlor by blood, through marriage, by adoption or in an employer/employee relationship.


A way of comparing disparate things (often their prices) related to an earlier base period, which is often given the value of 100. The things may be consumer goods (as in the consumer price index) or stocks and shares (as in the stockmarket index).


The process of linking the cost or price of something to an index. Wages that move in line with the consumer price index (to enable them to take account of generally rising prices, that is, inflation) are said to be indexed.

Indirect Cost:

The costs involved in manufacturing or in providing a service which cannot be attributed to a particular product or service. The cost of the electricity required to heat a company's headquarters, or the premiums paid to insure factories against fire damage, are both examples of indirect costs. An indirect cost is also known as an overhead.

Indirect Taxation:

A tax that is not imposed directly on an individual or organization. For example, VAT in Europe or sales tax in the US, which are levied on the turnover of a product. Also customs duty, which is an ad valorem tax on imported goods.


A formalised way of introducing someone to a new place of work. An induction course can include lectures about the history of the company, a guided tour of its premises and visits to customers.

Industrial Relations:

The relations between employers, employees, trade unions and government.


The process of becoming an economy that is based on industry: one with a large number of factories involved in manufacturing goods.


A sector of the business world, such as manufacturing industry or the steel industry. Also all these sectors taken together.


An increase over time in the prices of goods and services, Inflation is usually measured by the consumer price index, a basket of the goods and services bought by the average householder.

Inflation Accounting:

A way of coping with inflation when preparing a company's accounts; a way of addressing the fact that the dollar that bought something at the beginning of the year is not worth the same as the dollar that it was sold for at the end of the year. On paper it could look as if there was no loss on the purchase and sale, but that would be misleading.

Information Technology:

The technologies that enables the rapid and widespread dissemination of information, essentially the technology of the computer and the telephone, and the interplay between them. Frequently abbreviated to IT.


The basic plant and services underpinning the operation of business or of a country.


A legal measure to restrain someone from doing something on the grounds that it may, for example, cause injury or inequity.


The addition of new elements to products and services, or to the methods of producing and marketing them. Innovation is a continuous process of adding improvements at the margin. It is not the same invention, which involves an element of sudden and dramatic discovery.


The State Department's Bureau of Intelligence and Research (U.S.A.).

Inside Information:

Information which is received because the recipient is in a privileged position. Thus an investment banker working on a takeover will know about it before the general public, and so will the directors of the company doing the taking over. They would all be deemed to be in possession of inside information.


A person who is in possession of inside information.

Insider Dealing:

Dealing in stocks and shares on the basis of inside information. In many developed countries this is illegal. Although hard to prove, a few people have served time in prison for it.

Insider Information:

Important facts about the conditions or plans of a corporation that have not been released to the general public.


The state of a company that is unable to pay its debts on time. If the company can manage to reschedule its debts before any of its debtors press their claims through the courts, it may avoid going into liquidation.

Instalment Credit:

A loan provided for the purchase of consumer goods which is repaid in a number of regular equal instalments over an agreed period of time.

Institutional Investors:

Any organization that trades securities in large volumes over a long period of time; for example, pension funds, insurance companies and investment banks. The market behaviour of institutional investors is very different from that of retail investors.


A contract between one party (the insurer) and another (the insured) in which the insurer agrees to reimburse the insured for defined losses over a defined period of time. This is called casualty insurance to differentiate it from life assurance.

Insurance Premium:

A payment made to obtain insurance.

Intangible Asset:

A business asset which cannot be kicket, such as goodwill, a brand name, or the inventiveness of a company's R&D department. Intangibles obviously have considerable value, but it is hard for an accountant to put a number on it.

Intellectual Property:

Ideas, designs or inventions – the fruits of the intellect. By means of a patent, a trademark and copyright law, intellectual property can be protected from commercial exploitation by copycats. It can also be bought and sold like real estate.

Ownership conferrint right to possess, use or dispose of products created by human ingenuity, including patents, trademarks and copyrights.


Any means of communication between two parties in which both parties can communicate simultaneously with each other. So the telephone is interactive, but the television is not (yet)

Interbank Rate:

The rate of interest that banks charge each other for borrowing and lending money among themselves.

Inter-Company Pricing:

Tax havens may be used for the purpose of inter-company pricing in a number of ways. In the first place, a manufacturing company located in a high tax jurisdiction could effect sales to a related company in a tax haven jurisdiction at cost or at prices involving a very small profit margin; the tax haven company could then in turn sell the goods to one or more related marketing companies in high tax jurisdictions at high prices which would produce a low profit in the hands of the latter company or companies. A variation of this technique would involve selling to unrelated marketing companies at arm's length prices, the primary object of the exercise still being achieved since the manufacturing company would have avoided taxation on the real profits that would otherwise have accrued to it.

Secondly, raw materials or goods or components manufactured at a very low cost abroad, could be purchased by a tax haven company and then sold to a related company in a high tax jurisdiction at high prices which would give the latter company a substantially lower profit than if purchases had been effected directly.

Often inter-company pricing takes place by companies merely passing invoices without the subject matter of the sale actually being transferred to or by the intermediary company.


There are two business-related meanings:
  1. The money paid for the privilege of borrowing money. The cost of borrowing money.
  2. A share in an asset. For example: "They had a 50% interest in the building."

Interest Cover:

The number of times a company can cover (out of profits) the cost of the interest payments it has to make on loans. In other words, profit over the year (before interest and tax) divided by the amount of interest paid out over the same period. The lower the interest cover, the lower is the likelihood that a company will be able to pay its shareholders a dividend.

Interest Rate:

The amount charged for borrowing money for a year, expressed as a percentage of the amount borrowed.

Interest Rate Swap:

An agreement involving exchange of interest coupons at a fixed rate for coupons at a floating rate. Both parties' liabilities under the swap are in the same currency and for an equal amount. Thus, there is no exchange of principal. Interest swap transactions are arranged between entities, one of which wishes to reduce the cost of its floating rate obligation and/or to obtain other benefits and the other wishes to borrow fixed rate funds without recourse to the bond market.


The hardware and software that lie between two computers and that allow them to communicate with each other. From this specialist meaning the word has come to be used for any bridge that connects things, people or ideas.

INTERFIPOL (International Financial Police):

A slang synonym for the Convention on Mutual Assistance in Tax Matters drafted by the Organization For Economic and Cooperation Development designed to facilitate exchange of information between the twelve member countries of the O.E.C.D but not yet approved by at least five of the participants. However, because some of the activities are believed to go beyond the normal borders of the competent authorities of various countries, particularly in seeking records and collection payments, some international tax specialists have given it this name as in their opinion it alludes to Interpol (international fiscal police).

Interim Accounts:

Accounts produced somewhere between the beginning and the end of a company's financial year. Some stock exchanges demand that quoted companies produce interim accounts six months after their full-year accounts. Banks may demand that companies produce interim accounts to support a request for a loan.

Interim Dividend:

Part of a company's annual dividend that is paid in stages (usually six-monthly or three-monthly) during the year.

Interim Manager:

A manager who is employed by a company at a senior level for only a short period of time. An interim manager's job usually focuses on sorting out a particular problem or seeing through a particular strategy or course of action.


Any organization or individual that acts as a go-between.

Intermediate Goods:

Goods which lie somewhere on the production line between raw materials and finished products. Rolls of steel, for example, are intermediate goods in the manufacture of cars. Iron ore is the raw material; the car is the finished product.

Intermediate Technology:

Technology which is appropriate to the state of development of a country or an industry, particularly used with reference to developing countries that are not at the frontier of technical knowledge. For example, encouraging the use of handicraft skills and tools for the manufacture of furniture in cantral Africa, rather than investing in high-tech factories full of robots.


The addition of new intermediaries into a business process.


The use of several different modes of transport (road, rail, sea or air) to ship goods from one place to another.

Internal Funds:

Funds which a company generates from its own efforts. These are available to be paid out as dividends to shareholders or for investment. Compare with external funds.

Internal Rate of Return:

The rate at which a future cash flow has to be discounted to give an amount exactly equal to the investment in the project. If the internal rate of return (IRR) is higher than the interest that could be earned from leaving the money in a bank, than the project would appear to be a reasonable one.


Anything that is carried on between two or more different nations.

International Business Corporation (IBC):

In addition to its everyday usage, this term has a special meaning in the legislation of Antigua, Barbados, Grenada and St. Vincent and refers to companies, which, though resident in one of these countries, do not carry on business in goods or services originating in such country.

International Business Corporation IBC (Channel Islands and Isle of Man):

Like the international IBC, the IBC found in this region is designed for foreign companies and individuals to the jurisdiction in which it is registered, providing a maximum of privacy, combined with a comprehensive freedom from local taxation. An IBC pays every year filing fees and domiciliary fees in order to remain registered. This company has a special form of tax rate, designed to defeat the controlled foreign company legislation of the neighboring larger countries. This type of company will pay taxes on local, as well as international revenue at a very competitive tax rate.

International Business Corporation IBC (International):

IBC stands for International Business Corporation. It is a company designed for foreign companies and individuals to the jurisdiction, in which it is registered, providing a maximum of privacy, combined with a comprehensive freedom from local taxation. An IBC pays governmental fees and domiciliary fees each year in order to remain registered. In some jurisdictions an additional tax-exempt charge payable. Such charges are denoted in the e-offshore list for every jurisdiction. An IBC is like any other company subject to local law.

International Financial Centers:

The term "International Financial Center" which is occasionally used - incorrectly - as a synonym for "tax havens" refers more correctly to centers such as London, Luxembourg, Paris, Singapore and Zurich. One of the important requirements of a successful international financial center is that international financial business transacted there should not be subject to inconvenient controls or withholding taxes.

International Tax Planning:

The object of international tax planning is to determine, from the tax point of view, whether or not to embark on a project; and, if it is embarked upon or has already been commenced, then to minimize or defer the imposition of the tax burden falling on taxable persons and events and to do so lawfully, in the attainment of the desired business and other objectives, while taking into consideration all relevant tax factors with particular regard to the danger of double taxation and the advantages which may be derived from the inter-relationship of two or more tax systems, and in the light of the material non-tax factors.

The role of tax havens in international tax planning lies in the possibility of situating a taxable person or a taxable event in a tax haven with a view to displacing the connecting factor with a high tax jurisdiction and thus permitting a modification in the incidence of tax.


A worldwide network of interlinked computers that can be accessed by anybody with a personal computer and a modem. The internet is used to disseminate information (via the world wide web), to send messages (by e-mail), and to enable groups with common interests to communicate.


A network of computer links set up within an organization to enable the members of that organization to communicate (exclusively) with each other. An intranet may also have a link to the internet and the outside world.


The inputs a company holds that are necessary for its production processes plus the unsold finished goods that it holds in its warehouse or wherever. In the UK the term used is stock.


The purchase of a capital asset with the intention of gaining an income from it or of making a capital gain. Buying stocks and shares is investment, so too is buying property for rent or a company for its profits. By and large, buying jewellery is not an investment.

Investment Appraisal:

The process of determining the likely rate of return of an investment.

Investment Bank:

A financial institution that arranges the initial issuance of stocks and bonds and offers companies advice about acquisitions and divestitures.

Investment Currency Premium:

Premium payable to persons resident in the Scheduled Territories for exchange control purposes in order to purchase investment currency, namely foreign currency from a limited pool of such currency designated as eligible for use for certain investments and payments abroad (in particular for portfolio or property investment and direct investment which cannot be shown to provide benefits over a short period to the balance of payments of countries in the Scheduled Territories).

Investment Grade:

The rating that a security needs to obtain from credit-rating agencies if institutional investors are to be allowed (by their statutes) to buy it.

Investment Grant:

A grant given for the purpose of investment.

Investment Holding Company:

A company organized in a tax haven country by an investor, which purchases and subsequently handles for him his personal investment portfolio through the anonymity of a nominee company. Consideration for the purchase is the establishment on the investment company's books of a debt to the investor equivalent to the value of the investments transferred whereby the income generated from the investment holding company's assets are not taxable.

Investment Incentive:

Investment incentives are incentives of various kinds which are granted in order to attract local or foreign investment capital to certain activities (e.g. exports, technological development) or particular areas (e.g. backward regions or designated areas as part of a decentralization policy). Such incentives may be of various types, e.g. grants, interest-free loans, factory sites, exemption from exchange restrictions, and are frequently granted as a package together with tax incentives.

Investment Trust:

A company whose sole business consists of buying, selling and holding shares.


An organization or an individual who makes an investment.

Investor Relations:

That part of a company's activity designed to maintain good relations with its shareholders.


Traded items that never see the inside of a container, such as banking services, tourism and software design.


A document prepared by a seller of goods and sent to the buyer demanding payment.

Invoice Discounting:

The selling of a company's invoices to a financial firm at a discount to their face value. Companies do this to improve their cash flow.


= I owe you. Signed document bearing these letters followed by specified sum, constituting formal acknowledgement of debt.

IP Address:

Internet Protocol address identifying a computer connected to the Internet.


Initial Public Offering. The first offering of a company's securities to the general public.


Inland Revenue Commissioners (United Kingdom tax authority).


Internal Revenue Service (United States tax authority).


Short for Integrated Services Digital Network, a telecommunications technology that promises to revolutionize the way in which voice and data communications are transmitted.


Short for International Standards Organization, an association of almost 100 countries that tries to standardize technical and industrial processes. It publishes a series of International Standards which recommend a minimum quality and/or performance for manufactured goods.


A large block of securities that are sold all together at one go.

Itemized Billing:

Invoices for things like telephone calls that are broken down item-by-item. Computerized analysis allows customers to receive details of each call to which the invoice relates.


Day by day plan.


International Telecommunications Union.




Java technology is both a programming language and a platform. With most programming languages, you either compile or interpret a program so that you can run it on your computer. The Java programming language is unusual in that a program is both compiled and interpreted. With the compiler, first you translate a program into an intermediate language called Java bytecodes, the platform-independent codes interpreted by the interpreter on the Java platform. The interpreter parses and runs each Java bytecode instruction on the computer. Compilation happens just once; interpretation occurs each time the program is executed.

Jet Lag:

The physical condition resulting from long distance travel and changes in time zones, the symptoms include insomnia, lack of appetite, and a short temper.


The acronym for just in time, a Japanese management system based on the principle that no stock should arrive for processing until the minute that it is actually required. JIT saves large sums of money by eliminating unnecessary inventory, but it requires highly sophisticated logistics systems to operate properly.


A system of production used when the quantity of goods to be manufacutred is too small to justify the cost of setting up a system of mass production.

Job Description:

A formal written description of a job, laying down all that is expected of the person who is employed to do that job.

Job Evaluation:

A regular, systematic process in which employees' performances in their jobs are assessed by senior managers. The assessment includes recommendations about training and individual development.

Job Lot:

A collection of miscellaneous goods of uncertian value. The goods may, for example, have been soiled in a fire or be past their sell-by date.

Job Security:

The extent to which there is a risk of redundancy attached to a particular job, or the extent to which an employee believes that there is such a risk.

Job Sharing:

The division of one job between two or more part-time employees. Job sharing particularly suits jobs which involve serving a list of clients, such as home nursing.

Job Specification:

A detailed description of the qualifications, skills and experience required to do a particular job.

Joint and Several Liability:

A liability which is the responsibility of a group of people and for which the people can be sued either jointly or individually.

Joint Liability:

A type of liability which is the responsibility of a whole group of people (a guarantee of a bank loan to a company that has been signed by all the company's directors, for example). Anyone wishing to take legal action for the liability must sue the group as a whole.

Joint Stock Company:

A company that is owned jointly by its stockholders, that is, its shareholders.

Joint Venture:

A type of business partnership involving joint management and the sharing of risks and profits as between two or more enterprises based in different countries. When the capital of the partnership is known as a joint venture.

Junk Bonds:

Bonds issued by companies with low credit ratings. They typically pay relatively high interest rates because of fear of default.

Junk Mail:

Unsolicited promotional and advertising material that is delivered by mail. Increasingly, the expression embraces such mail delivered electronically, as well as by the postman.




A type of corporate structure found in Japan in which a large number of companies own small stakes in each other. These companies work together in a vertically integrated chain that provides everything from the raw materials to the consumer credit that enables the final consumer to buy the keiretsu's finished products. The keiretsu model has aroused much interest in the West.

Key Money:

Money that has to be paid in advance as a deposit to secure a rented property.

Key Person:

A senior executive in a company whose life and/or health is insured by the company. If the person should die or be ill within a certain period the company receives compensation from the insurer.

Key Tested Telex (KTT):

An older form of transferring funds between banks, using telex machines in addition to verification of messages thorugh the use of key code numbers.


The words, or sequence of symbols, that are fed into the search engine of an electronic database to extract specific information. The care given to selecting keywords determines the relevance of the information retrieved.


A payment made to an individual who is responsible for awarding a contract (or for making a purchase) to persuade them to award it in favour of the payer of the kickback. In most circumstances kickbacks are illegal.


A special technique or skill which a company has developed and which has a value to that company, either because it gives it a competitive advantage over its rivals, or because it can sell the skill or technique to others.

Knowledge Management:

The process of managing the knowledge that a company owns, either collectively, through such things as its patents and know-how, or individually in the minds of its employees. More and more companies are appointing knowledge-management officers to be in charge of this function.


The Japanese word for internationalization, something that is interpreted as the rest of the world rather than the spread of the rest of the world's corporations around Japan.




Human effort: one of the three factors of production at the root of all studies of economics. The other two are land and capital.

Labour Intensive:

A description of products or services that require a high input of labour compared with the amount of land and capital. Postal services and catering are labour intensive; flying planes and making steel (these days) are not.

Labour Mobility:

The willingness of workers to move from one place to another in pursuit of new job.

Laissez Faire:

French for "let it happen", an expression used to refer to a particular sort of free-market economics in which government interference with pure market forces is kept to a minimum.


The acronym for local area network, a computer network that embraces a number of computers whose workers have a common interest: for example, they all work in one particular building, or they all work at one particular function (accounting, say).


A term used to refer to a shipment of goods at the time and place when and where they are delivered.


A company or an individual who receives income from tenants making use of land and property over which the company or individual has the rights.


The introduction of a new product or service into a market. This usually involves a co-ordinated advertising campaign and intensive distribution.


To pass "dirty" money through "clean" places, such as reputable financial centres, so that the money appears to have been acquired legitimately, or to have had any tax due on it paid in full.

Law of Diminishing Returns:

The economic principle that, after a certain level of production, the same input produces a diminishing amount of output. This can be because of diseconomies of scale: as things get bigger they may require more management input to produce the same output.

Lawyer's letter:

The initial shot in a potential legal battle. A letter, for instance, sent by a lawyer to an intransignent debtor demanding payment within a certain time.

Lay Off:

To end somebody's employment, either temporarily or permanently, because of cuts by the employing organization. A temporary slowdown in demand for cars, for instance, might lead a car manufacturer to lay off some of its production workers for a few months, until demand picks up again.


Short for leveraged buy-out, a takeover of a company in which most of the purchase price is paid with borrowed money, which (usually) then becomes a liability of the company that has been purchased.

Lead Time:

The amount of time between the placing of an order and the actual receipt of the goods that have been ordered. Lead times are an important variable in the planning of production processes.


A human quality that makes people prepared to follow one person but not another. Some maintain that people are born with leadership; others maintain that it can be learnt.

Lean Production:

A term used to refer to a particular method of production devised by Japanese manufacturer in their efforts in the 1960s and 1970s to catch up with their western counterparts. It involved minimizing production costs as much as possible, and wherever possible.

Learning Organization:

The type of organization that makes a systematic attempt to retain and redistribute in an optimum way the information and knowledge that it gathers in it day-to-day business.


A contract granting the right to the use of property for a given period of time and for a given payment (or series of payments). If the property is land or buildings, the payment is called rent.

Lease Back:

An arrangement under which an organization which owns land or buildings sells them to a financial intermediary and immediately leases them back from the intermediary. This can have a dramatic effect on the organization's balance sheet.


The hiring (by a manufacturer) or large capital assets (such as machinery) from a financial intermediary. Leasing enables the lessee to exchange what would have been a single large capital payment for a series of instalments that can be considered as an expense paid out of income. This can produce tax benefits for both the lessor and the lessee.


A book in which an organization's accounts are formally recorded.

Legal Tender:

Any sort of money which is a legally acceptable form for paying a debt. Notes and coins are legal tender. Cheques and credit cards are not, since a vendor or a lender is not obliged to accept them as payment.

Less-Developed Country Corporation:

Dividend and interest income from qualified investments in less-developed countries and gains from sales or exchanges of such investments excluded from foreign base company income to the extent that these amounts are reinvested in qualified less-developed country investments. Less-developed countries are countries other than those within the Sino-Soviet bloc, Western Europe (other than Greece), Australia, Canada, Hong Kong, Japan, New Zealand, and South Africa. To qualify as a less-developed country a corporation must derive 80% of its income from less-developed countries and must have 80% of its assets and business property in such countries or in other associated properties. Under the Tax Reform Act of 1976, dividends arising form gains on sales or exchanges of stock in less-developed country corporations are no longer excluded from current taxation when the dividends are recieved from earnings accumulated after January 1, 1976.


An individual or organization to whom a lease is granted.


An individual or organization who grants a lease to another individual or organization.

Letter Box Company:

A corporation set up in a tax haven with nothing more than a mailing address to take advantage of tax provisions. Severely criticized in many quarters as an evasive measure, the company whose existence is little more than a nameplate has been outlawed in Monaco but is allowed to function in many other havens.

Letter of Credit:

An arrangement whereby a bank makes funds available to a customer in a foreign country. The bank debits the customer's account at the same time as it sends a letter to a suitable bank abroad asking it to give the customer credit. A letter of credit is useful for the finance of trade as well as of foreign travel. The bank abroad will usually have a continuing agreement with the home bank to provide this service for its customers. Such a bank is called the home bank's correspondent.

Letter of Intent:

A letter formally expressing an intention to take a particular course of action. A letter of intent is written in a way that makes it clear that it is intended not to be; it merely indicates that something is being contemplated.

Letter of Wishes:

. Guidance and a request by the Settlor to the trustee having no binding powers over the trustee. There may be multiple letters. They must be carefully drafted to avoid creating problems with the settlor or true settlor. In the case of a grantor trust becoming a co-trustee, the trustee cannot be a "pawn" of the settlor or there is basis for the argument that there never was a complete enouncement of the assets. Sometimes referred to as a side letter.


The extent to which a purchase was paid for with borrowed money. Amplifies the potential gain or loss for the purchaser.

Leverage (Indirect) Programs:

Programs which use leased assets (such as US Government bonds) to increase the amount of instruments purchased and resold for a profit. The benefit of leased assets is that such programs generate substantially larger profits.


There are at least three meanings:
  1. An amount of money that is owed.
  2. An obligation to do something in the future.
  3. The legal responsibility for damages for breach of contract or some other civil wrong.


A right granted by one organization to another to use a process, trademark, patent, and so on, belonging to the first organization in return for a fee, or for the payment of a royalty.


An individual or organization to whom a licence is granted.


Technology which can be the subject matter of licensing covers all forms of industrial enterprise. It embraces industrial property which may be protected by patents, trade marks, etc. As well as technology, which cannot be patented. Industrial enterprises frequently exploit their technology by transferring it to licensing companies in tax havens so that royalties and other sums may be received by the licensing company from related companies or third parties thus reducing the total tax burden. The anti-avoidance provisions of most developed countries have limited the use of tax havens for this purpose.


An individual or organization who grants a licence to somebody else.

Lifetime Employment:

The practice of working for the same employer from the moment that a person enters the workforce to the day that they retire. Lifetime employment is increasingly rare, but

immediately after the second world war it was commonplace.


The acronym for last in first out, an accounting principle whereby (for valuation purposes) the last stock-in-trade that was purchased is considered to be the first to be consumed in the production process.


In relation to dealing instructions, a restriction set on an order to buy or sell, specifying the minimum selling or maximum buying price.

Limited Duration Company:

A hybrid entity with the characteristics of a general and limited partnership, the limited duration company exists in the States of Wyoming, Colorado, Florida and Kansas and certain tax havens outside the United States, including the Cayman Islands, Mauritius, and the Turks & Caicos Islands. In the latter, the entity is known as the limited life company. Although all members enjoy limited liability, no members have to be relegated to the status of "silent" partners as in a limited partnership, and the company is treated as a partnership for federal tax purposes in the United States under specific conditions. A limited duration company's life span is limited to 30 years and the company must be dissolved if a member withdraws because of death or any other reason unless all remaining members agree to keep it alive. Share transfer is restricted.

Limited Liability:

The fundamental principle of incorporation whereby a so-called limited company is limited in its obligations to the amount of equity that is raised by its shareholders. A creditor of a limited liability company does not have legal recourse to the directors or the individual shareholders per se for payment of the company's debts.

Limited Liability Company (LLC):

A hybrid between the partnership and the corporation (originates from the German GmbH created by law in 1892).

Limited Liability Company/Corporation:

A company established under common law. This type of company can be found in the UK, the Channel Islands, the Isle of Man and many Caribbean jurisdiction. The important characteristic is that the liability of the shareholder is limited up to the amount of their capital contribution.

Limited Liability Partnership LLP:

A form of the LLC favored and used for professional associations, such as accountants and attorneys. The benefits are that it protects the general partners, usually the one funding the operation, from liability. It is tax transparent and therefore used as a tax-planning tool for US tax resident persons or entities.

Limited Partnership:

A form of partnership in which one or more of the partners run the partnership (and have unlimited liability) and a number of other partners contribute only capital to the partnership (and have their liability limited to the amount of capital that they invest). The partners with unlimited liability are called general partners; those with limited liability are called limited partners. The limited partners have no right to participate in the running of the business.

Limited Power of Attorney:

A legal document that empowers the trade manager to deal with the various parties of the transaction on behalf of the owner of the funds (the Principal). Transactions will not happen without this instrument.

Line Extension:

A marketing term for the increase in a product line brought about by adding variations of an existing brand; for example, by adding to a brand of chocolate bars like Mars a brand of Mars icecream.

Line Management:

The managers responsible for the actual production of an organization's goods and services. The expression comes from the military where line duties are those involved directly in the line of fighting, wheras staff duties are associated with the headquarters and support functions.


The process of redistributing a company's assets after it has ceased trading. The company may have ceased trading of its own volition, in which case the process is called voluntary liquidation, or it may have ceased trading on the instructions of a court because it has failed to meet its obligations on time.


A measure of how quickly a company (or a market) can turn its assets into cash. A bank is highly liquid compared with a hotel company, for instance. Financial institutions like banks have to maintain a certain level of liquidity (imposed by their regulators) so that they can pay out their depositors' money easily should there be a (temporary) loss of confidence in the institution.

Listed Company:

A company that has obtained permission for its shares to be admitted to the London Stock Exchange's Official List.

List Price:

The formal price of goods and services as recorded on a list produced by the manufacturer or service provider. This may not be the price that customers are actually asked to pay.


The adding of a company's securities to the list of those that are traded on a recognised stock eschange.

Listing Requirements:

The things that a company is obliged to do before its securities can obtain a listing on a stock exchange. These usually include:
  1. being in business for a minimum length of time;
  2. making a profit for a certain period; and
  3. producing accounts prepared according to the stock exchange's own reuirements, which may demand disclosure well beyond what is required by the law of the land.


A unique London-based insurance market that began in the 18th century in the coffee shop of a man named Edward Lloyd. The market is known particularly for insuring marine risks, but it suffered a series of heavy losses in the 1980s when it went into business with which It was less familiar.


To put a software program or a quantity of data into a computer.

Load Factor:

|The percentage of a carrier's capacity that is occupied. For example, an airline may need, on average, a load factor of 75% - ie to sell more than 75% of its seats in order to be profitable.


A transaction in which the owner of property (the lender) allows another person (the borrower) to have use of that property, usually for an agreed time and for an agreed price. The property in question, of course, is (more often than not) money.

Loan Stock:

That part of a company's capital which is in the form of long-term loans or bonds.


The exclusion from a place of work (an office or a factory) of one group of workers by another. Lock-outs usually occur as part of an industrial dispute between trade unions and managers.

Log File:

A file created by a web or proxy server which contains all of the access information regarding the activity on that server.

Log on:

To go through the stages required to gain access to the programs and information contained within a computer.


A term taken from the military where it referred to the science of supplying and moving troops; hence the science of moving goods, services and people in and out of corporations.


The design or symbol that uniquely identifies a particular organization or brand.


An investor is said to be long in a stock when his supply of it and his commitments to buy it in the future are in excess of his commitments to sell it.


In corporate life, generally a period in excess of ten years. Long-term planning is planning for the business world of ten years hence. Longs, as the British government's long-term bonds used to be called, were securities with an original maturity of 15 years or more.


The condition in which a company's expenses over a given period are greater than its revenue over the same period; or where its income from a particular transaction is less than the cost of the transaction.

Loss Leader:

A product that is sold at a loss by a manufacturer or a retailer to entice (that is, to lead) a customer to buy other things from the same manufacturer or retailer.


The extent to which customers buy the same goods and services again and again. On the whole, a customer's loyalty decreases as his or her choice gets wider.

Loyalty Card:

The plastic card issued to customers as part of a loyalty programme.

Loyalty Program:

A marketing initiative designed to increase customers' loyalty to a particular product or a particular distribution channel. A typical loyalty program might include givng customers plastic cards which electronically credit them with points (which can be redeemed for goods) in line with the volume of their purchases.


A short version of limited liability, an expression added to the end of a company's name to indicate that the company has the protection that limited liability affords. All languages have a similar way of indicating that an organization enjoys the privileges of limited liability.

Luxury Goods:

Expensive goods which no reasonable person would consider to be essential to everyday life, such as precious jewellery, high fashion or specially matured alcoholic drinks. Because of their nature, luxury goods are bought in a different way from consumer goods and need to be marketed differently. They are sometimes taxed differently, too.