GEORGE TOWN, Cayman Islands — For the headquarters of more than 14,000 companies, Ugland House is a quiet place.

A few lawyers, accountants, and secretaries wander into the fivestory building each weekday morning, but by mid-afternoon the black marble lobby is about as busy as a bank on Sunday.

Ugland House is what’s known as an “address of convenience” for many of the 70,000 American and other foreign companies, limited partnerships and trusts that are based in this Caribbean locale.

“All off-shore jurisdictions do is facilitate and ameliorate the conduct of global business,” a managing partner of law firm Maples & Calder, which resides in Ugland House and represents nonresident clients, Gus Pope, said.

But in recent months, these offshore operations of American companies have been under renewed scrutiny in Congress, where some lawmakers say the U.S. Treasury potentially is losing millions of tax dollars.

Many American firms have subsidiaries registered in the Cayman Islands. Energy players such as El Paso Corp., Transocean Inc. and GlobalSantaFe Corp. have local subsidiaries. So do hotelier Marriott International Inc., aerospace giant Boeing Co. and food producers Sara Lee Corp., and Coca-Cola.

Most American companies say they situate corporate units offshore for strategic, financial and tax reasons, and they make no attempt to hide them.

But a lingering taint from days when small islands were the refuge of tax evaders means that “anything that happens here is looked at more closely, because of the image of offshore,” a Canadian and chairman of the Cayman chapter of the Alternative Investment Management Association, Andy Stepaniuk, said. He is a partner with the local unit of KPMG International.

“The human capital is in the United States. How many people are making their living in the hedge fund industry in New York, paying income tax and purchasing goods and services?” Mr. Stepaniuk says of the benefits for the American economy from the thousands of financial industry workers hired by companies with their offshore profits.

In all, according to the Cayman Islands Financial Services Association, the 70,000 entities here have $1.4 trillion in assets in this “tax neutral” venue, if not so many employees. Most of them comprise only a post office box and a figurehead from a local law firm or consulting firm to represent them.

By registering a subsidiary here and making use of the islands’ profit-reporting loopholes, American companies can reduce their tax burden from the 35% the Internal Revenue Service levies on onshore profits to, in many instances, nothing. Cayman collects neither personal nor business taxes.

Cayman authorities and industry analysts contend that in today’s interconnected financial world, American corporations with international business are compelled to move offshore to compete with companies from less-tax-burdened countries.

But shifting political winds in Washington are threatening to stanch the flow of taxable business offshore — a practice that senior senators, including some Republicans, denounce as corporate America skipping out on the bill for running a democracy and forcing the IRS to take bigger bites from wage earners and homeowners.

With their Stop Tax Haven Abuse Act submitted in February, Senators Obama of Illinois and Levin of Michigan, both Democrats, and Senator Coleman, a Republican of Minnesota, want to label the Cayman Islands and 33 other territories or countries as “offshore secrecy jurisdictions” where American citizens’ financial activity would be automatically suspect. “There is an estimated $100 billion gap between taxes owed by taxpayers and the nonpayment of those taxes due to offshore abuses,” Mr. Levin said. “If this bill collects even 5% of that offshore tax gap and stems what is now a growing abuse, its impact will be significant.”

The Cayman Islands, one of dozens of small venues that have transformed themselves into international financial centers, has grown over the past 20 years from a dodgy domicile for money launderers and tax evaders to the world’s fifth-largest banking center and the global leader in mutual and hedge funds.

Consultants, auditors, and analysts here accuse tax-hunting politicians of shortsightedness and misconceptions about offshore activity and its effects on developed economies.

In a world where 60% of global trade occurs within multinational firms and financing deals blend capital from a multitude of sources, American activity cannot be sorted out for tax purposes from that of other countries, Mr. Pope, the lawyer, contended.

Eighteen of the 34 countries and overseas territories targeted by the Senate bill are in the Caribbean. Some, such as the Cayman Islands and Bermuda, are under British rule. Hong Kong, Switzerland, Singapore, and European Union member Luxembourg also are on the secrecy list. Such a branding could inflict diplomatic as well as financial damage on American allies, according to industry analysts such as Brett Wolf of Complinet, which provides information and software for financial services.

Cayman government officials see the American political designs on offshore operations as an antiquated view of a financial world that operates in cyberspace, not in buildings. “The concept that all companies’ activities have to be anchored in bricks and mortar is like trying to apply a phonograph needle to a CD,” Cayman Islands’ deputy financial secretary and the government official responsible for the financial services industry, Deborah Drummond, said.