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Regulatory Arbitrage
Also known as reg-arb, is when investors use the government’s laws in their favor.
Reg-arb happen when corporations try to undermine their regulator authority by redefinin
and reclassifying different business activities in order to take advantage of a more flexible and favorable treatments.
Jurisdictional Arbitrage
Is when intuitions try to take advantage from the discrepancies on the common law between competing territories, countries and cities.
Regulatory & Jurisdictional Arbitrage Applications
1. Criminal Persecution: extradition agreements for fugitives.
2. Online Gambling: internet website that allow sports betting.
3. Banking Regulation: Basel III agreement that redefine the definition of Tier 1 Capital across jurisdictions.
4. Sales Tax Arbitrage: Amazon buying, Best Buy window shopping.
5. Tax Arbitrage: the reallocation of business operations to tax heavens.
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