The most important condition for those who want to set up their business interests in an offshore financial center is to select a jurisdiction that provides both political and economic stability, so that business can be conducted with certainty, confidence and corporate security.
A good offshore jurisdiction should not be subject to violent political swings or the possibility of military coup or invasion. A historically bad example was the African state of Liberia, whose well intentioned offshore legislation was overrun by a military conflict and political turmoil. Most of the offshore tax havens, however, have good track records as regards their political and social stability.
A similarly important factor is economic stability. The ideal offshore jurisdiction should have transparent economic policies, a sound economic system, a stable currency with no restrictions on investment repatriation, low inflation and the main economic liberties strongly protected by the rule of law and an independent judiciary.
One should stay away from any offshore jurisdiction that has an image of corruption, dictatorship, social tension and economic instability.