Short for mergers and acquisition, the business of arranging and financing takeovers (of one corporation by another) and mergers (between corporations).

Machine Tool:

A piece of equipment used for cutting and shaping metal in a manufacturing process.

Maildrop Company:

A fully-legal commercial enterprise using a stable physical address as a delivery destination for letters or parcels on behalf of fee-paying clients who don't live on the premises. Mail can be held or forwarded at the clinet's request. Some maildrops provide similar services for faxes as well. Very useful for receiving confidential information which you don't want delivered to your home address without prior notification. Maildrops and Serviced Offices: What is a maildrop? A mail forwarding service - maildrop - allows a person to use their (the maildrop's) address to receive mail and then have it forwarded to the address where the person actually wishes to receive mail. Sometimes it's in the same city, othertimes in another continent. Mail is sent to the maildrop and is then placed unopened into another envelope and mailed to its final destination. As long as your intentions are legal there is never any problems with authorities. A good, reliable service does not condone fraudulent business activity. You can still use your regular address to receive most of your mail but your confidential mailgoes to the mail forwarding service and then to you.

Financial privacy is almost a thing of the past nowadays. With computers, it's eroding rapidly, much quicker than in the past. You might say, "Who needs Privacy? I have nothing to hide!" It seems that whenever you make a simple purchase, they ask for your name and address. Then about a month later you start receiving weekly catalogs, sales literature, promotions, etc. Try giving them a name other than your own with your address. I tried John Doe (!) and sure enough that person started receiving catalogs. Many companies sell our names to others and sooner or later you are getting bombarded with Investment Schemes, Get Rich Quick Letters, Chain Letters, Miracle Health Cures, and other distracting material.

People who use mail forwarding services are a mixed bag of individuals and organizations. Some people have made enemies in life, ex-spouses, business acquiantances and while they may be living in Paris, France, they would like the other party to think they are in London, England, so they use a mail forwarding service.

If you are going to sell a product by mail and have the best product in the world but are located in San Salvador, El Salvador a potential buyer for your product may be hesitant about sending money for your product. If you have a US address, most buyers are not too worried about sending money through the mail.

Many people, maybe they have accumulated great wealth or are celebrities, have to worry about the press, fans and admirers,enemies, kidnappers, robbers, and so on. With a maildrop you can keep distance bewteen you and these people. Companies use mail forwarding services to do things their competition might find out about if they used their regular address. It's also a good way to check out your competition. You can find out what they are charging the people you are selling to. Another company ran Help Wanted Ads just to see how loyal his employees were to him. Mailing list companies also use mail forwarding services to salt their mailing lists to the people they are renting to, and check to see that the lists are being used on a one time basis.

In using a maildrop try to find out beforehand how much privacy they give you, some will give information out to anyone calling over the phone - a good one will not as it could be just anyone calling. Try to find out how long they have been in business and if they plan to be in business for awhile. Make sure they don't sell your name to other people's mail order businesses as this can defeat their purpose.

Mail forwarding service combined with serviced business offices: Business centers particularly suit companies setting-up branch office(s) overseas. They prefer to establish themselves before signing a lease, though some companies that arrive intending to use a business center for a few months end up staying with them for years - for the sake of convenience, the comfort of clean modern offices with a prestigious address, without the hassle of maintenance and other problems associated with a lease,becomes too difficult to give up.

Telephone services range from a basic message-taking service to the most up-to-date call diversion system. One business center offers a diversion service called "The London Office". This was designed with the telecommunications company so that your own 171-telephone number is instantly diverted to a chosen number anywhere in the world, and a programmed announcement saying "This is a call from your London office" pre-warns whoever answers the telephone. Of course you pay for the second leg of the call. The telephone services available from "The London Office" link with another service called "The VirtualOffice". This is a package offering clients the flexibility to work from anywhere they choose; local telephone numbers are logged onto acomputer system for call diversion. The package includes use of the business center's address, use of meeting rooms and secretarial services.

In most serviced office centers clients can buy services à la carte in order to suit their particular needs. For example, you can rent conference rooms by the hour so as to have an office for, for example in London, when the need arises. The main attraction of the serviced office facility is that the client has the option to walk away when his licence expires. Business centers take the operational headaches out of renting office space and of clients having to employ their own staff, which leaves them free to focus their efforts entirely on the success of their business.

Mail Order:

The use of the postal services as a distribution channel for goods. Customers receive a catalogue (a mail-order catalogue) from which they choose goods that they want to buy. They order and pay for them (by telephone or by post) and are sent the goods within a stated time period.


A widespread distribution of printed material by post aimed at persuading the recipients to purchase particular goods or services, to join an organizations, to give money to charity, and so on.


The cost of keeping plant and machinery in good working order.


An age-old word derived from the Italian manneggiare, to handle (originally horses, now corporations). People who manage (managers) are generally expected to carry out certain functions; for example, employ staff, motivate and organize them, plan for the future and innovate (both products and processes).

Managed Bank:

An offshore bank also known as a Class "B" or Cubicle Bank. The Managed Bank is not required to maintain a physical presence in the licensing jurisdiction. Its presence in the licensing jurisdiction is passive with nominee directors and officers provided by a managing trust company with a physical presence. The Managed Bank is not permitted to transact business within the licensing jurisdiction but may maintain its books, records, etc., to assure secrecy of operations


There are two meanings:.
  1. The business of managing an organization.
  2. The people who do the managing.

Management Accounts:

A set of accounts prepared solely for the benefit of the managers of an organization. Such accounts need to be non-technical, prepared regularly (every month or every week, for example) and in a consistent format. They often contain forecasts and estimates that break away from the normal constraints of financial facts.

Management and Control:

In certain legal systems (e.g. Ireland) which follow the former United Kingdom law in this regard, a company is treated as being resident in the country in which its management and control is exercised, and not in the country of its place of registration or incorporation. The criterion of residence may be of relevance in international arrangements in involving tax havens, and can be material from both the fiscal and the exchange control points of view.

Management Company:

See Administrative Offices.

Management Consultant:

A person or organization who advises managers in a number of business areas, including strategy, information technology, marketing and human resources. Management consultants analyse business situations and offer advice on how to improve them. Many go on to get involved in implementing their own advice.

Managing Director:

A person who directs the management of an organization; the most senior manager in a business, division or function.


An instruction to carry out a particular course of action. The instruction may be given by a court, a customer, or a manager.

Man of Straw:

Effectively a nominee settlor or grantor who creates an offshore trust but often has no further connection with the trust once it is created.


Originally the making of things by hand – "manu"…"facturing" – but now the making or things by hand or by machine.


In general, the edge. But the word has come to have a number of specialist meanings in business:
  1. The difference between the cost of something and the price at which it is sold, that is, the profit margin.
  2. In economic theory, the margin is that level of production at which the cost of producing one more unit is exactly equal to the revenue to be gained from it.
  3. A method of trading in securities which involves initially putting up only a small percentage of the cost of the securities, known as margin trading.
  4. Margin lending is a form of lending by a bank which enables a customer to buy shares and then use the value of the shares as security for the lending.

Margin Account:

A brokerage account that allows a person to trade securities on credit.

Margin Call:

A margin call is a demand for more collateral on a margin account.

Marginal Cost:

The extra cost of producing one more unit of a product over and above an agreed output. The marginal cost assumes that all the overheads have been absorbed by the previous production.

Marginal Producer:

A manufacturing unit that is only just able to remain profitable at the current price levels of the industry in which it is operating, and at its own current production levels. When the economic environment becomes less favourable for the industry, the marginal producer is the first to go out of business.

Marginal Propensity:

The proportion of any additional unit of income that will be used in a particular way. Thus if a consumer's marginal propensity to save is 0.3, he or she will save 30 cents out of every extra dollar that they gain.

Mark Down:

To reduce the original selling price of a product, perhaps because it has not been selling well. In particular, to lower the quoted price of a company's shares sharply after the announcement of unfavourable news.

Mark Up:

The difference between the cost price of a product (or service) and its selling price.


The place where buyers and sellers come together to exchange goods and services and to determine prices. It is a fundamental concept in economics, where buyers represent demand and sellers represent supply. In marketing terms, a market refers to a group of consumers with identifiable characteristics in common, such as the teenage market.

Market can also refer to the total sales of a particular product or industry. For example: "It's a $4 billion market.

Market Capitalisation:

The market value of a company's issued shares; that is, the quoted price of each individual share multiplied by the number of shares in issue.

Market Leader:

The organization which has the largest share of any particular market, and whose tactics are watched most closely by the other participants. A market leader's actions set the trend for the rest of the market.

Market Penetration:

The percentage of a target market that has bought a particular product at least once. Also the extent (usually expressed as a percentage) to which a potential market is reached by an advertising message or a distribution channel.

Market Research:

A process of systematically analysing the market for a potential new product or service, and/or examining how the market for an existing product or service has changed. Much market research is based on surveys of consumers in which they are asked a series of questions about their purchasing habits. It is sometimes called marketing research.

Market Share:

The proportion of a market served by one participant. For example: "BMW has an x.y% share of the European car market."


The process of identifying, anticipating and satisfying consumers' needs (profitably) by means of the standard tools of marketing, such as market research, advertising and general promotion.

Marketing Mix:

The weight given to various elements involved in marketing a product or service. The elements are sometimes classified as the four Ps: product, price, place and promotion. In the marketing mix for luxury goods, for instance, price is less important than product.

Mass Market:

A market consisting of almost everybody in the population. The opposite of niche market.

Materials Handling:

The business of moving the materials involved in a process (raw materials, semi-finished goods, or the final product) so that they are in the right place at the right time. The cost of materials handling can be as high as 40% of the total cost of manufacturing.

Maternity Leave:

The (usually unpaid) time off work given to a pregnant employee by an employer. The employee's job is kept available for her to return to once her baby's dependence has diminshed.

Matrix Organization:

A company whose organizational structure is designed along two axes, giving each employee two lines of authority. The two axes are most frequently geographic and functional. Hence the head of an American multinational company's German accounting operation will report to both his functional head (the finance director in the United States) and his regional head (the managing director of the business's German subsidiary).

Mature Industry:

An industry in which innovative products and processes are rare and in which the market share of individual firms does not change much over time. Such industries include steelmaking, carmaking and innkeeping.


The length of time left until the principal repayment on a bond becomes due. The original maturity of the bond is its maturity on the date when it was issued; the residual maturity is its maturity now – that is, the length of time from this moment until the repayment becomes due.

Mavery Injunction:

A court injuction preventing the trustee for a trust from transferring trust assets pending the outcome of a lawsuit.


Short for Master's Degree in Business Administration, the main qualification (rapidly becoming indispensable) for managers and people who want to run their own business. The MBA is a postgraduate, post-experience one- or two-year course in which students study strategy, marketing, finance and organizational behaviour. MBA courses are particularly popular in the United States; less so in Europe.


Short for management buy-in.


Short for management buy-out, the purchasing of an organization by a group of managers. They may already work for the organization, or they may be outsiders who intend to work for it once they have purchased it (in which case the deal is sometimes called a management buy-in). An MBO is often also a leveraged buy-out.


The vehicles that carry advertising (and other things such as entertainment and news) to an audience.

Media Buyer:

A person in an advertising agency or independent firm who buys space in the media in bulk: time during television programmes or pages in newspapers and magazines. Media buyers, sometimes referred to as "gorillas with calculators", then resell the space in smaller quantities to advertisers and advertising agencies.


A process of using a third party to resolve a difference of opinion between two other parties. Unlike arbitration, mediation does not involve the conflicting parties agreeing in advance to accept the third party's decision. The mediator has no legal power to enforce an agreement.

Memorandum of Association:

A company's charter to organize that must include such pertinent information as the nature of the business, the nationality of the organizers, the amount of capital to be issued or to be subscribed, par value of the shares, etc. This document must be designed to govern the company's worldwide commercial activites. (Also see Articles of Association).


A person assigned to work with a senior manager for the specific purpose of offering independent advice on the manager's performance in the workplace. Mentors must be in a position where they can express contrary views without damaging their career prospects.


The work of a mentor. Mentoring is partly designed to overcome the oft-repeated claim that it is lonely at the top.


Goods and services in a finished state, ready to go to the retailer or already in the hands of the retailer.

Merchant Bank:

The traditional British term for investment bank. Many merchant banks (most of them based in the City of London) grew out of the families (the Rothschilds, Hambros and Barings, for instance) who financed the trade of Britain's merchants during the years of the British empire. Hence the name.


The amicable coming together of two companies into one.

Merger Accounting:

A particular method of taking mergers into account – that is, of putting together the separate accounts of two merged companies. Merger accounting avoids creating goodwill. It includes assets in the combined accounts at their existing book values rather than at the price that was actually paid for them.


A merger or consolidation occurs when two corporations combine their assets and operations into one corporation. In meger situations, one of the corporations will survive the merger, and it is referred to as the survivor. The other corporation is referred to as the disappearing corporation. The survivor assumes all of the assets and liabilities of the disappearing corporation.

Mezzanine Finance:

Any type of finance that falls somewhere between equity and debt in the priority of its claim in the case of a liquidation. If equity is the first floor and debt the ground floor, the mezzanine stands somewherein between.


Short for most favoured nation, a status granted by one country to another whereby the first country agrees to apply its lowest tariffs to the second country's exports will get better treatment.

Middle Manager:

A manager who sits somewhere in the middle of an organization's hierarchy; a general term for the great bulk of managers who are neither managing directors nor new graduate recruits. Many middle managers have been dispensed with as a result of delayering.

Mineral Rights:

The right to dig for the minerals that lie under a particular piece of ground.

Minimum Wage:

The lowest amount that can legally be paid to an employee, often expressed as an hourly sum.


A short (usually preprinted) form of a trust, often used as a confidentiality enhancer, to bridge the ownership and management of an International Business Company. The Mini-Trust is intended only to pass assets on the death of the settlor, i.e. a will substitute.


The written record of meeting. Companies retain the minutes of important meetings, such as board meetings, as a formal acknowledgement and reminder of decisions that have been reached.

Minute Book:

Used for writing minutes in.


The corporate minutes reflect the written record of actions taken or authorized by the board of directors or shareholders. These written records are customarily stored in the corporate minute book.


A company's overriding business purpose; something that it aims to do above and beyond mking a profit.

Mission Statement:

A written version of a company's mission, which aims to inspire its workforce and, by giving them the feeling that they are working for a higher purpose than wages, to make them more productive and more loyal.


Mutual Legal Assistance Treaty created by the U.S. in the hope of accessing foreign records.

Mobile Phone Networks:

Often lost in the screaming headlines about third-generation mobile phone networks is what the heck the first and second generations were. The first generation - 1G - was analog networks, 2G is digital networks like today's decade-old GSM, and 3G is high-speed digital networks that let your mobile phone do lots of things that your personal computer can do today - getting e-mail, sending photos, reading Web pages, seeing maps, watching video clips and more. In many - especially urban - places of the world, we are now entering the 2.5G stage of mobile phones. Unfortunately, 2.5G is full of its own jargon. But if you're cell-phone shopping, you'll need to know it. If you want to use your mobile for PC-like features on the move, you'll want to make sure the handset can do WAP and GPRS. This will get you the ability to receive data (Wireless Application Protocol) over faster, upgraded GSM networks (General Packet Radio Service), where available. If GPRS isn't yet available from your carrier, your data could get a boost over GSM via a slightly faster technology called HSCSD, or High-Speed Circuit-Switched Data. For a GPRS speed boost, you'll need a phone (and network) that can do EDGE - Enhanced Data rates for GSM Evolution. EDGE networks are just being explored by European cell phone carriers, and are expected to be used particularly by companies that didn't get a government license to offer 3G. Speaking of GSM, most people think it stands for Global System for Mobile communications. Well, it does today, but that wasn't its original derivation. It first came from Groupe Spéciale Mobile - the name of the division of the European Telecommunications Standards Institute responsible for the original GSM development.


An abbreviation of modulator-demodulator, the instrument which sits between a computer and a telephone line and allows electronic messages to be passed in and out of the former via the latter. Without modems there should be no public access to the internet.


Anything that is recognized as a store of value and a medium of exchange by the participants in a market. This could be (and has been) cowrie shells, black beads and dollar bills.

Money Laundering:

Traditionally, money-laundering has been said to occur when criminals seek to make illegally obtained funds look legitimate by funneling them through "clean" banks and businesses until the money's origin is obscured. Click here for FATF's lastest report on money laundering and the annual review of Non-Cooperative Countries and Territories.

In practise, governments use the term "money laundering" to define any funds they consider less than transparent to their surveillance oversight. In other words, money without a readily identifiable source must be criminal until the user can prove otherwise by eliminated his/her financial privacy.

Money Market:

A market in which financial institutions (such as banks) buy and sell short-term financial instruments among themselves.

Money Supply:

The amount of money circulating in an economy. The definition of money varies. In the M0 version it consists of notes and coins only. The M1, M2 and M3 verions include a varying range of short-term financial assets (such as bank deposits) as well as notes and coins.

Money Trail:

The 'fingerprint' most money transactions leave.


The situation where a single producer has a sufficiently large share of a market to be able to control prices in that market. A monopoly implies the absence of competition. Governments and consumer watchdogs aim to prevent companies with a monopoly from abusing their dominant position at the expense of the consumer.


The situation where a single customer has the whole of a market to itself; the mirror image of a monopoly. Monopsonies occur most frequently when a government is virtually the only customer for a particular product, for example, in the defence industry or in certain areas of medical care.


One of the world's three main credit-rating agencies. Moody's judgment on the quality of a company or a country's debt can materially affect the price that the company or country has to pay to borrow money.


The earning of a second income; for example, night-time taxi driving by someone who is a builder or a civil servant by day. Moonlighting is so called because it frequently (but not necessarily) takes place at night. It also implies that the work is not 100% legal, in particular that it is kept out of sight of the taxman.


A period of time in which a borrower is allowed (with the approval of the lender) to forgo payments of principal on a loan. Financial institutions are rarely prepared to grant borrowers a moratorium on interest payments.


A long-term loan for the purpose of buying real estate which uses the real estate as security for the loan.


A formal proposition made in a meeting which seeks to gain the support of those at the meeting for a particular course of action. Properly formulated motions are automatically recorded in the minutes of the meeting.


The small attachment to a computer that allows the user to go in and out of different software programs. The mouse controls the movements of a cursor on the screen. By clicking the mouse when the cursor points to a particular icon, the user can switch from one program to another.

MTC Number:

The Money Transfer Control Number given in connection with a Western Union money transfer.


Medium Term Note. A guarantee issued by a bank with a maturity between 1 and 10 years and paying interest (often 10 years with a 7½% coupon).


The use of a number of different media simultaneously. For example, a multimedia presentation might include a video film (using a television), some sound effects on a CD, a slide show, and a number of graphic posters.


A company which has production and sales operations in a number of countries, and which coordinates these operations from a single headqarters. The operations are run separately from each other, unlike those of a transnational.


A mutual organization is one that is run for the benefit of a group of people (its members) who have set it up to provide goods or services for themselves. Savings banks and insurance companies were freqently set up in this way in the 19th century. In general, the members of a mutual organization also own it.

Mutual Assistance Agreement:

A contract agreement between two or more nations in which the fiscal Governments are empowered to take preference over the civil rights of each others' citizens in ascertaining and collecting crime-related proceeds or tax liability.

Mutual Fund:

Investment company usually formed in a tax haven and issuing shares to the public.

Mutual Fund Management Company:

A mutual fund, frequently established in a tax haven country, formed as a trust rather than as a company in order to serve as the settlor of the trust. The mutual funds' management and distribution operations generally are handled by exempted companies. In certain tax havens it is not possible to offer stock issues that permit redemption of ordinary shares. In this case a mutual fund cannot function as an open-end investment company as is popular in the United States and must operate as a Unit Trust as practiced in the United Kingdom.

Mutual Legal Assistance Treaty (MLAT):

An agreement among the U.S. and many Caribbean countries for the exchange of information for the enforcement of criminal laws. U.S. tax evasion is excluded as not being a crime to the offshore countries. The British Virgin Islands have not executed this treaty.



Naamlose Vennootschap (NV):

Limited company in the Netherlands used as a Substantial Holding Company, required to publish its accounts.


The acronym for North American Free Trade Agreement, an agreement between Canada, the United States and Mexico that aims to remove tariffs and other barriers to trade between the three countries.


National Association of Securities Dealers Automated Quotations System.


A privately owned corporation is nationalized when it is purchased (often compulsorily) by the state. Companies are usually nationalized for a principle (for example, a belief that the defence industry should be controlled by the state for reasons of security) rather than for profit. Nationalized companies are rarely as profitable as privately owned ones.


North Atlantic Treaty Organization.


Non-Cooperative Countries and Territories - as of February 27 2004: Cook Islands, Guatemala, Indonesia, Myanmar, Nauru, Nigeria and Philippines. See also FATF.

Negotiable Instrument:

A financial instrument, such as a bearer bond or a share, which can be transferred from one owner to another without informing the original issuer of the instrument.


The process of reaching agreement between two parties, one of which has something that the other party wants, and for which the other party is prepared to give something in return.


The granting of favours to members of the same family, an issue central to the running of a family firm. How can it remain a family firm without undermining the morale of non-family employees by its nepotism.


A value that is left after certain deductions have been made from a gross amount.

Net Asset Backing:

The net worth of a company divided by the number of its shares; a rough approximation of the value behind each share.

Net Present Value:

The value today of an amount that is to be paid in the future. This value is calculated by taking into account future interest rates and the risk that the payment will not eventually be made. Net present value is frequently used to judge the viability of an investment project. If the net present value of its expected revenue exceeds the net present value of its future costs then it is worth going ahead.

Net Profit:

An organization's gross income less all its costs, including tax, depreciation and interest payments.

Net Worth:

An organization's assets less its liability. The amount that would be left to shareholders were all the organization's assets to be sold and all its liabilitites to be met at the values that the accountants have ascribed to them.


The links that exist between computers enabling users of them to share certain centralized date and/or services, and to communicate among themselves.


Making contact with other people in the hope that they might subsequently be useful in business or elsewhere. The expression has grown out of the computer industry's use of the word network.

New Entrant:

A company that enters a market for the first time. New entrants inevitably provoke a strategic response from existing companies withing the market.


A publication that specialises in breaking news in a narrow area; for example, a country, an industry or a market.


The purpose of Newspeak was to drastically reduce the number of words in the English language in order to eliminate ideas that were deemed dangerous and, most importantly, seditious to the totalitarian dictator, Big Brother and the Party. Thoughtcrime would be made literally impossible because there will be no words in which to express it.

Niche Market:

A small, narrowly defined market, such as the market for Rolls-Royce motor cars, or the market for newsletters about biotechnology. Small, innovative companies are particularly good at identifying and satisfying niche markets.

Nikkei-Dow Jones Average:

A leading share index of the Tokyo stock exchange. It is an average of 225 major stocks of the Tokyo market.


Basic service on an airplane with no extras.


A nominal amount may be one that is too small to mention (as in nominal damages) or one that exists only in name (as in the nominal price of potatoes in 1945, a price that is not adjusted for the ravages of inflation, which the so-called real price is). The nominal value of a share is the value on the share certificate, which may not be a price that anybody has ever actually paid for it.


A person whose name is used in place of somebody else's. A nominee may open a Swiss bank account, for instance, to disguise the identity of the real beneficiary of the account.

Nominee Company:

A company formed for the express purpose of holding securities and other assets in its name or to provide nominee directors and/or officers on behalf of clients of its parent bank or trust company.

Nominee Director:

Someone who acts on your behalf as a 'front' director of the company. In some jurisdictions the nominee director can also be another offshore company.

Nominee Name:

Name in which security is registered and held in trust on behalf of the beneficial owner.

Non-Active Company:

A company either in voluntary liquidation or one wishing to protect a name that includes the word "bank" or "trust company" despite the fact that the company does not carry on banking or trust business.

Non-executive Director:

Any director on the board of a company who is not also an executive working for the company. A non-executive director's role is to ensure that there is a healthy balance between the interest of shareholders and the interest of the company's management.


A loan on which interest has not been paid for a considerable period of time (usually three months) is said to be non-performing. Financial institutions have to treat such loans in a special way in their accounts, setting aside reserves against the possibility that they will never get their money back.


Money cannot be refunded. Any advance payment for a product or service that will not be repaid if the product or service is ultimately not wanted by the payer. For instance, a deposit to secure a house which is not yet built may be non-refundable should the purchase not be completed.

Non-Resident Company:

Enterprises incorporated outside a specific tax haven, i.e., Cayman Islands, or outside any other country, whose shareholders are resident outside that particular tax haven or country and whose business activities primarily are conducted outside the specific tax haven or country. Non-resident persons may hold shares in non-resident companies and the latter may hold United States dollars or other hard currencies without requiring official permission both from within or outside that particular tax haven or country.

Non-tariff barrier:

A barrier to trade other than a tariff imposed directly on an import at its point of entry. Non-tariff barriers include things like safety regulations which only domestic firms satisfy; distribution systems that discriminate against imports; and government regulations that demand services (like finance) be supplied by known individuals.


Item is not to be used by any other person than the one named on the item.

Non-voting Share:

A share in a company that does not give the holder the right to vote at company meetings. Holders of non-voting shares benefit financially in the same way as other shareholders, but they have no say in the running of the company whose shares they own. In some markets the issuing of such shares is frowned upon.

No-Tax Haven:

Term used by certain financial writers to refer to tax havens where there are no relevant taxes.


A written acknowledgement of a debt, as in pound note or promissory.

Notebook Computer:

A miniature laptop computer with a more limited range of software.

Not-for-Profit Corporation:

A not-for-profit corporation, sometimes referred to as a nonprofit corporation, generally exists for the purpose of carrying out some socially useful objective. Formed under the nonprofit corporation laws of a state, not all of these corporations are tax exempt. And, unlike the name implies, many not-for-profit corporations make money. The money, however, does not get distributed to members, officers, or directors. The money is used to further the socially useful purpose.


Advice given in advance. The advice may be of a forthcoming meeting, or of a person's wish to end a period of employment. For example: "Today he handed in his notice."

Numbered Account:

A bank account that is known to most of the bank's staff only by its number. No name appears on the account's checks or on the statements. The main purpose of the numbered account is to disguise the identity of the account holder. Most countries (include Switzerland) insist nowadays that the true beneficiary of all accounts be known to at least one senior manager in the bank




Short for Organization and Methods, a once-popular field of management study dedicated to improving the methods and procedures used in office environments.


Organization of American States.


Organization of African Unity.


The ultimate goal of an organization's strategy.


The capacity of something to become out-of-date. For example, all fashion garments have a built-in obsolescence, that is, by their very nature they need to be replaced next season.


A measure of the extent to which a property is occupied. For example, an apartment that is rented for only half the year has a 50% occupancy; a hotel room that is occupied for nine nights out of every ten has a 90% occupancy.


The paid employment that occupies most of an individual's working life.

Occupational Hazard:

A danger that arises as a result of a person's occupation. Hence falling off ladders is an occupational hazard for window-cleaners; backache is an occupational hazard of computer programs.

Occupational Pension:

A pension that is paid by a person's employer by dint of the years of employment and the contributions that were made to the employer's pension fund during that period.


Organization for Economic Co-operation and Development. Short for Organization for Economic Co-operation and Development, a Paris-based organization of 29 (richish) nations. Among other things, the OECD aims to harmonize international trading practices and to promote free trade.

Off Balance Sheet:

Any transaction by a company that does not appear on its balance sheet. Off-balance-sheet items include things like leasing deals and fiduciary deposits.

Off-balance Sheet Financing:

The process whereby a contingent (depending on certain events) liability is not recorded as a liability on the balance sheet but typically appears in the notes to the financial statement. Off-balance sheet financing is therefore not reflected in the balance sheet total, although possible related reserves will.


An indication of willingness to enter into an agreement, and of the terms of such an agreement. An offer and an acceptance constitute a legally binding contract.


There are two meanings:
  1. A room containing a desk and a chair in which people work on paper or on computers.
  2. A clearly defined role within an organization. For example, something that has to be done by the chairman's office is done by whoever happens to be carrying out the function of chairman.

Office Politics:

The art of organizing a group of people who work in offices. More specifically, the expression refers to the psychological games that people play with each other in and out of the office.


Officers are appointed by the board of directors and serve at the pleasure of the board. The bylaws usually prescribe the titles and duties of each office. Common officers are the president, secretary, and the treasurer. Officers direct the daily operations of the corporation.


Any country other than your own. In general, any business that is transacted in foreign currencies between parties that is also foreign to the place. A Dutch bank based in London lending dollars to a Brazilian company is transacting offshore business. Such business is often done in order to minimize tax liabilities.

Offshore Banking:

By popular usage, the establishment and operation of US or foreign banks in such offshore tax havens as the Bahamas and the Cayman Islands.

Offshore Banking Unit (OBU):

A bank in an offshore financial center, not allowed to conduct business in the domestic market but only with other OBU's or with foreign persons.

Offshore Booking Centers:

An offshore financial center used by international banks as a location for "shell branches" to book certain deposits and loans. Such offshore bookings are often utilized to avoid regulatory restrictions and taxes.

Offshore Center:

A financial center used as a foreign base for overseas operations where the investor may move in and out of his investment freely and which fits the needs of the user.

Offshore Centres:

Countries and jurisdictions, most commonly small islands with little to no resources for revenue, specializing in the provision of financial services. These centres specialize and focus on offering to non-residents more favorable tax environments than that enjoyed in their home territory on international trading activities and/or investments via that country. Other beneficial features of offshore centres may include banking secrecy, privacy, various types of discretionary services and other favorable aspects of the legal environment.

Offshore Dollars:

Also known as euro dollars, offshore dollars consist of dollar deposits in any location outside the United States, including Europe.

Offshore Finance Company:

A company organized in a foreign country, almost always in a tax haven country, which handles such financing services as arranging foreign loans in Eurocurrency markets and floating bonds or other forms of indebtedness abroad in United States dollars or other hard currencies. Generally the offshore finance company is created to handle the financing requirements of its parent or related companies but is used occassionally to handle the financing needs of the parent company's distributors or agent overseas.

Offshore Financial Centers:

A country or jurisdiction where an intentional attempt has been made to attract foreign business by deliberate government policy such as the enactment of secrecy laws and tax incentives.

Offshore Fund:

A mutual fund offering its shares to persons resident outside the country in which it is incorporated.

Offshore Group of banking Supervisors (OGBS):

Established in October 1980 at the instigation of the Basle Committee on Banking Supervision with which the Group maintains close contact. The primary objective of OGBS is to promote the effective supervision of banks in their jurisdictions and to further international cooperation in the supervision between the Offshore Banking Supervisors and between them and basle Committee member nations and other banking supervisors. Current OGBS members are: Aruba, Bahamas, Bahrain, Barbados, Bermuda, Cayman Islands, Cyprus, Gibraltar, Guernsey, Hong Kong, Isle of Man, Jersey, Lebanon, Malta, Mauritius, Netherlands antilles, Panama, Singapore and Vanuatu.

Offshore Holding Company:

A company organized in a foreign country which controls one or more affiliate companies and which manages, administers or services its affiliate companies usually located outside the country in which the parent company is incorporated.

Offshore Investment Center (Or Jurisdiction):

A financial center used as a foreign base for overseas operations where the investor may move in and out of his investment freely and which fits the needs of the user. Large amounts of financial assets or foreign currencies may be sold without delay at low cost as compared with other types of financial centers. An offshore investment center is also used as a base for such international acitvities as export-import trading, commodity transactions, mutual and other investment funds, exchange and securities hedging, futures trading for options, calls and puts, and patent and trademark licensing. Once referred to exclusively as the traditional "tax haven," the title given to this type of offshore operation (offshore investment center or jurisdiction) is now also universally accepted in order to strengthen its image in the worldwide business community.

Offshore Investor:

An investor who is a user of a foreign base company in an offshore center and who may move in and out of his investment freely.

Offshore Limited Partnership:

A partnership, the general partner of which is an offshore company. The limited partners may be onshore entities.

Offshore Profit Centers:

Branches of major international banks and multinational corporations, which are established in low tax financial jurisdictions to lower taxes for the business entity as a whole. The resulting high- and low- (or non-) taxed profits are blended to enhance the overall return to the shareholders.

Offshore Trading Company:,

A company organized in a foreign country to buy goods from an exporter in one or more other foreign countries and to sell these same goods to importers in other foreign countries. The documents are processed by the offshore trading company and all managerial, administrative and day-to-day financial transactions are handled by it. The goods are shipped from the seller in one country to the buyer in the other country without ever being shipped or landed in the country where the offshore trading company is located.

Offshore Trust:

The quality that differentiates an offshore trust from an onshore trust is portability. The offshore trust can be transferred to additional jurisdictions to maintain confidentiality and to advantage desirable facets of the new jurisdictions laws.

A trust, similar to a corporation or foundation, is a legal entity with its own property distinctly separate from the assets of the individuals positioned behind it. However, unlike a corporation, trusts have no share capital. Trusts are normally created to fulfill

a specific purpose such as:

To avoid ownership of the shares of a company. The trustee who declares that the shares are held on behalf of the trust normally holds shares.
  • To collect dividends from companies anywhere in the world as income. If correctly worded, a trust may add all income to the corpus, thus making any distribution from the trust a capital distribution, which, in some countries, may not be taxable in the hands of the beneficiary.
  • To provide an extra step in the line of anonymity of the beneficial owner or owners of a company.
  • To ensure that, if any arrangement utilizing a company are exposed, these investigations necessarily end at the point where the trustee is interposed. Strict secrecy provisions bind trustees.


Something that is purchased straight off a shop's shelf, a product produced in advance in the expectation that it will find a consumer who is prepared to buy it. The opposite of tailor-made or customized.

An off-the-shelf company is one that is bought with its legal status already established, that is, a company that has never carried out business but which has a name, articles of association and a registered address.


The control of a market by a few producers. The danger of an oligopoly is that the few producers get together and agree among themselves to fix prices as if they were a monopoly.


An independent person appointed to hear and act upon consumers' complaints about manufacturers or service providers. The idea originated in Sweden, where the first ombudsman was set up to hear complaints about government services.

On Approval:

When goods are supplied on the understanding that the purchaser may return them if they prove not to be what the purchaser wanted. Goods bought by mail order are usually, in effect, sold on approval.


A computer that is linked directly to a database or to a central processing unit.


Onshore is defined as the country in which a private person, a company or any other legal entity is resident for tax purposes.

On Spec:

Work done for a client without a contract or order on the understanding that the client will only pay for the work if and when it is used.

Open-Ended Investment Company:

The corporate equivalent of a unit trust in which investors' interests are represented by redeemable shares.

Open-market Operations:

Dealings by a central bank in the money market designed to adjust a country's money supply.

Open Outcry:

A method of trading on an exchange in which dealers shout out their offers to buy or sell. A contract is made hwen a buyer's shouts are matched with those of a seller.

Open Plan:

A way of designing the interior of an office in which the walls dividing the space into individual rooms are removed. All that may stand between employees' desks are potted plants and soundproof screening.

Open Position:

A situation in which an investor has an obligation to buy more securities of a certain type in the future than his future obligation to sell securities of that type. (Or the other way round, he has an obligation to sell more than he has to buy.)

Open System:

An expression used to describe information technology that is accessible to all. In other words, any hardware and software that are in the public domain so that manufacturers can make products that are compatible with them.

Operating System:

The fundamental software program that enables a computer to run all the other programs that it contains.

Operations Research:

A mathematically based study of repetitive activity designed to improve the productivity of manufacturing processes. Or, as it is known, makes considerable use of computerised simulation.

Opportunity Cost:

In general, the amount that could have been gained if factors of production (land, labour or capital.) had been put to an alternative (and more rewarding) use. Hence investing in a bank account earning 3% a year when the stockmarket index rises by 10% has an opportunity cost of 7%.


The right to buy or sell a specified amount of a commodity (or of securities) at a specified price within a specified time (usually less than six months). Such a right can be bought and sold during the specified time. If it is not exercised within that time, however, it expires.


An instruction to buy or sell goods or services which is legally binding.

Order Form:

The document on which an order is formally recorded.

Ordinary Companies:

Companies incorporated in a specific country which generally follow the British pattern calling for a Memorandum of Association that requires a specified minimum number of subscribers, a registered office and authorized share capital. Ordinary companies are permitted to trade within or without the country in which incorporated upon approval by the Government.

Ordinary Share:

The most straightforward form of share. It gives the holder the right to vote at formal shareholders' meetings, and the right to a portion of any dividends that are declared, but nothing more.

Organic Growth:

The growth of an organization that comes from its own internal efforts rather than from external factors, such as a takeover or a joint venture.


There are two business-related meanings:
  1. A collection of people who come together for a defined purpose.
  2. The way in which those people structure their relationships to best achive their purpose.

Organizational Behaviour:

The academic study of the behaviour of people within organizations. It embraces subjects like motivation and leadership.


A diagrammatic representation of an organization's structure, including lines representing the relationships between different functions and different businesses.


Assistance given to dismissed employees by their former employer to help them to find a new job or career. The function is increasingly carried out by specialist outplacement agencies.


Assistance given to dismissed employees by their former employer to help them to find a new job or career. The function is increasingly carried out by specialist outplacement agencies.


To hand over to an outside organization the responsibility for running and developing a discrete function or process within business. For example, an organization might outsource the running of its computers or its fleet of company cars.


An obligation that is due and that has not yet been settled.


Someone who works for an organization somewhere outside the organization's own premises outworkers are used, for example, in the textiles industry, where they assemble garments in their own homes. They are usually paid a piece rate which relates their rewards to the quantity of goods that they produce.


To demand a price for something that is in excess of the price that can be obtained elsewhere, all other things being equal.


A credit facility granted by a bank which allows the borrower to draw funds from the bank up to a prescribed limit, as and when the borrower wishes. This flexible form of borrowing is common in Europe but not widespread in North America or East Asia.


A company's overhead is the sum of its direct costs.


When the demand for new issue of securities exceeds the supply of securities available, the issue is said to be oversubscribed. If there is a demand for 700,000 securities and there are only 100,000 for sale, the issue is said to be six times oversubscribed.

Over-the-Counter: There are two meanings:
  1. An informal stockmarket for trading in shares that are not quoted on a major exchange, known as an OTC market.
  2. Pharmaceuticals that can be sold freely over a shop's counter without the need for a doctor's prescription.


Hours worked by n employee beyond those contractually agreed with the employer; for example, work done in the evenings or at weekends. Overtime is usually paid at a higher rate than work done in normal hours.


Increasing a business's turnover to such an extent and at such a speed that the increase is not supported by other areas of the business. If the accounts department is swamped with new orders, for example, and cannot get invoices out and payments in within a reasonable time, the business might suffer from a liquidity crisis.

Own Label:

Products that are branded with the name of the retailer, such as a supermarket which sells its own-label cornflakes and soap powder in competition with established manufacturers' products. The retailer itself does not actually manufacture cornflakes or soap powder. It does not even manufacture the packaging. It just adds its name to products that have been made by someone else, sometimes someone who produces a well-known competing brand.


Someone who owns and runs their own small business – a taxi-driver or someone who runs a corner shop.