Tax Havens

Topics: Tax haven, Offshore finance, Offshore company Pages: 60 (19660 words) Published: December 6, 2012
Tax havens – main

Best Tax Havens

Tax haven is considered to be a country which has no taxes or low taxes levied on individuals and corporations. Each year tax havens attracts loads of clients who are drawn in by the possibilities of reducing taxes on their capital. Most of the world’s tax havens are also offshore financial centers and together they create business structures and other such services which clients can use knowing that they have the advantage of saving on taxes. Offshore financial centers are simply jurisdictions or countries which offer offshore services such as offshore banking, the incorporation of offshore companies the formation of offshore trusts and foundations and investment fund management among other services.

Tax Havens of The World

Tax havens came about in the late nineteenth (19th) century and have since then developed and expanded. About twenty (20) years ago there were only a few existing tax havens in the world but today this number has grown tremendously. The world’s tax havens are located in the Caribbean region, Europe and some Pacific and Indian Ocean islands. The tax havens of the world includes countries such as the Republic of Panama, Anguilla, Dominica, Nevis, Belize, Seychelles, Mauritius, Vanuatu, Singapore, Hong Kong, British Virgin Islands, Bahamas, Dubai, Delaware, Gibraltar and Cyprus among other jurisdictions.

Offshore Tax Havens Benefits and Advantages

Offshore tax havens have many benefits for clients. In the beginning offshore tax havens were used mainly for asset protection and this was done by individuals and families who had capital and wealth to protect. It is safe to say that tax havens’ very first clients were the wealthy families, individuals and corporations of the world. With the increase in the popularity of offshore banking the number and the popularity of tax havens grew. Now more than ever offshore tax havens are used for business purposes. Tax havens around the world are known for the following characteristics: they provide confidentiality and privacy, provide offshore services, low tax or zero tax rate.

Tax exemptions for offshore companies in the tax havens are guaranteed by legislation in most of the offshore tax havens in the world. In offshore Bahamas and Dominica legislation guarantees that every offshore company incorporated the above mentioned jurisdictions is guaranteed twenty (20) years tax exemption starting from the day of incorporation.

Reduce Tax Liability in Tax Havens

Offshore tax havens present clients with the legal means of reducing tax liabilities. This can be attained from the use of an offshore corporation or International Business Company, offshore trusts and foundations and offshore banks. Offshore companies can be incorporated in Cayman Islands, British Virgin Islands, Vanuatu, Seychelles, Singapore, Bahamas, Dominica and Anguilla among other tax havens. An offshore company incorporated in a tax haven can do business anywhere in the world. In most offshore tax havens offshore companies are not taxed on any profits, dividends or interest owned by that company outside of the jurisdiction. The pure tax havens have no withholding tax, capital gains tax, inheritance tax, gift tax. This includes, Anguilla, Seychelles, Dominica, Nevis, Belize, the British Virgin Islands and the Bahamas. The low tax havens which include countries such as Barbados tax International Business Companies on their annual profits. The taxes levied in low tax havens are much lower to existing tax rated in other countries. In Barbados taxes levied range from 1 to 2.5 % of an offshore company’s annual profits.

Best Tax Havens For Privacy

In addition to zero taxation in the tax havens offshore companies are also provided privacy. The legislation which regulates the offshore companies unlike onshore companies (ex. UK companies, such as Ltd company or LLP) has clauses which are aimed at protecting...
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