Due to the privacy and tax security offered by individual countries, tax havens offer super-wealthy individuals a great opportunity to keep their money in offshore accounts?for tax avoidance and other purposes.??
These countries offer prospective individuals significant benefits and financially robust opportunities. The most attractive prospect is the fact that they allow people to avoid some potentially astronomical income taxes in their native countries.
What is a tax haven??
A tax haven is a country that offers a reduced, or if you are lucky, no tax liability.?
Tax havens also share limited or no financial information with foreign tax authorities. Tax havens do not typically require residency or business presence for individuals and businesses to benefit from their tax policies.
Over the years, many countries have become more attractive to ultra-wealthy individuals as they offer a more?relaxed taxation system.
Here are some of the world's top tax haven countries in the world:?
Along with being one of the popular tourist destinations, Switzerland is also known for the robustness and success of its financial institutions.
The country is known for its constant reliability regarding off-shore tax shelters and is the go-to spot for wealthy Europeans as well as international clientele.?Switzerland's banking services have been recognised by the law as a sort of economic specialisation.?
Bankers are prohibited from giving any information about their clients to anyone who inquires. For many years, many companies?and individuals from around the world have taken advantage of Switzerland's tax advantages.
However, the staunch privacy otherwise found in other tax havens has been somewhat weakened by investigations and subsequent laws by the European Union.?
Panama has a territorial tax system - wherein the income earned within the country is taxed, but exempts income earned elsewhere.?
A firm based in Panama can have assets anywhere in the world. The legislation also safeguards Panama enterprises' privacy, so you may be assured that your business interactions and financial statements will be kept secret and discreet in Panama. These rules protect your financial investments in Panamanian corporations.
However, there have been apprehensions about how safe the haven really is, after the Panama papers hit and spread like wildfire. It led to the country losing some of its offshore clouts. Still, Panama continues to remain an interesting option.?
Luxembourg, a small European nation, is?one of the wealthiest countries in the world, largely thanks to its financial sector, which makes up more than 35% of its GDP.
Luxembourg's tax-haven status stems from its business-friendly policies, which allow international corporations to exploit tax loopholes.?A wealthy corporation or individual can take heart with investing in the tax haven of Luxembourg, as it is one of the leading financial institutions in Europe.
Privacy is the central tenet of Luxembourg¡¯s policy as a tax haven. Only the owner of the funds or off-shore account can sign off on sharing personal details about their finances.
Luxembourg keeps everything under lock and key, ensuring their clients are feeling secure. It doesn¡¯t tax interest in off-shore bank accounts. Not only that, but they even offer favourable tax rates to their domestic corporations, giving them tax breaks and sometimes exemptions.
Perhaps the most efficient tax haven in the world, the Cayman Islands?have a solid international reputation for providing a comprehensive range of financial services to a wide spectrum of clientele.?
In the Cayman Islands, there is no corporate tax whatsoever. For corporations, this is a fantastic windfall to take advantage of. The Cayman Islands could very well help shield many corporations from increased and substantial taxes.??
Another big advantage that the country offers is the lack of interest you have to pay on investments. Specifically, the Cayman Islands would benefit corporations and hedge fund managers the most. For those who value privacy, the laws in that regard are excellent, ensuring that people won¡¯t be able to ascertain valuable financial information.??
Another beautiful island spot turns out to be one of the more expensive countries to call home. Bermuda has a 0% tax rate and no income tax whatsoever for investors and those looking off-shore. This makes it another perfect prospect for the world's wealth.?
One such company, Nike, in particular, made millions from not paying America¡¯s tax rate. Nearly a quarter of Fortune 500 companies are involved in some way or another with Bermuda as a tax haven.
Bermuda¡¯s emphasis on privacy for prospective bankers is some of the best in the world.?Although Bermuda benefits everyone utilizing them as a tax haven, corporations probably achieve the most benefit from using them.
The British Virgin Islands is known as one of the world's top tax-havens. It is being said that island holds?more than 5,000 times the value of what its economy should hold.
The country does not impose any taxes on offshore accounts, and it has no tax treaties with other nations, thus protecting the financial privacy of bank account holders.
An advantage to offshore banking customers and offshore companies incorporated in the British Virgin Islands is that there are no exchange controls. This makes it much easier to transfer funds from one place to another for trading and investment purposes while protecting financial privacy.??
The Netherlands is one of the most consistently popular tax havens for Fortune 500 companies in particular. Whereas about a quarter of these companies using Bermuda, well over half of the Fortune 500 use the Netherlands as a tax haven.
Like Bermuda, the company Nike has also managed to set up an account as well as avoiding paying Dutch taxes overall through a subsidiary they set up. Although not as openly tax-free as other tax havens, the Netherlands offers a substantially lower tax rate than other European countries.
The government of the Netherlands often states that their country is not a tax haven. Many big-name companies like Google take advantage of this by opening subsidiaries in the Netherlands.
The government, trying to crack down harder to avoid the image of a tax haven, is actively attempting to implement legislation that will affect the status of corporate taxes in the country.
Also read:?Believe It Or Not, Citizens Of These Countries Do Not Need To Pay Taxes!