Full article: http://www.arbitrageportfolio.com/regulatory-jurisdictional-arbitrage/

1. 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 redefining and reclassifying different business
activities in order to take advantage of a more flexible and favorable
treatments.
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2. Jurisdictional Arbitrage
Is when intuitions try to take advantage from the discrepancies on the
common law between competing territories, countries and cities.
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3. 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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