2009-07-07 15 Of The World’s Most Significant T…

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15 Of The World’s Most Significant Tax Havens
BillShrink Guy
April 21, 2009
File under Tags: locations, tax havens, taxes

As long as there have been taxes, there have been tax avoiders. And as
long as there have been tax avoiders, there have been tax havens.
Broadly speaking, any country that is known for helping individuals or
businesses avoid taxes can be described as a tax haven. Some are very
forthcoming and proudly advertise the tax advantages of living there,
while others are more discreet. In either case, tax havens have a long
and enduring legacy in civil society (with an estimated $11.5 trillion
currently stashed in offshore accounts) and each one offers something
different to aspiring tax dodgers.

Luxembourg

(Source)

Luxembourg is an attractive place for foreigners to stash excess wealth, as the entire country (said to be
among the richest in the world - in per capita terms) seems to have a rather lax attitude toward tax
collection. According to one website that profiles tax havens: “although they have taxes, nobody seems to
work too hard on collecting them.”

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Amenities: No tax on bank interest, investment dividends, or capital gains for non-residents.

Cook Islands

(Source)

The Cook Islands have much to offer prospective tax dodgers, including the sheer natural beauty of its beach
climate. Combined with the tax advantages discussed below, it’s no wonder shamed Australian entrepreneur
Alan Bond stashed his money here before it all came crumbling down on top of him. Not everyone has such
a rosy view of the Cook Islands, however. AssetProtectionBook.com describes several instances where
Cook Islands-based trusts were successfully invalidated by foreign judges and attorneys, some of whom
actually specialize in going after trusts that are based there.

Amenities: No capital gains taxes, income taxes, or death taxes levied on investors.

Cayman Islands

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(Source)

Hedge fund managers and investors have grown particularly fond of the Cayman Islands, which relies solely
on indirect methods of taxation like import duties, tourist fees, and licensing fees to sustain its government
and operations. The Caymans got major press during the 2008 Presidential debates when Barack Obama
slammed their tax haven status, declaring “there’s a building in the Cayman Islands that houses supposedly
12,000 US-based corporations. That’s either the biggest building in the world or the biggest tax scam in the
world, and we know which one it is.”

Amenities: No income, capital gains, gift, or estate taxes on individuals or offshore corporations.

Channel Islands

(Source)

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Investors with real estate-based investment trusts (or REITs) in their portfolio will find the Channel Islands
much to their liking. A 2007 Telegraph article notes that UK-based REIT investors are flocking to the
Channel Islands (located between the shores of France and England) where their investment income is taxed
at far lighter rates than the mainland UK. In addition to REIT investors, the Channel Islands are also
apparently attracting their fair share of of e-commerce firms and web companies (including UK retailer
Play.com.)

Amenities: Low taxes on property investment income, low incorporation costs.

Bermuda

(Source)

What could be better than floating in these crystal-clear waters and sipping an exotic drink with the
knowledge that your business profits are completely shielded from taxation? These and other benefits help
explain why entire companies (such as Tyco) have moved their operations to Bermuda. And while other tax
havens are coming under intense legal scrutiny, a 2002 Seattle PI article notes that “what these American
companies are doing in Bermuda appears to be perfectly legal under the tax code.”

Amenities: While Bermuda does not currently offer much in the way of tax benefits for individuals,
businesses enjoy a total exemption from income and capital gains taxes.

Dubai

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(Source)

Dubai is the tax haven of choice for those seeking to do business with Russian companies and investors. It is
also home to a sizable pool of job talent and business contacts of all kinds. According to one website, Dubai
is blossoming into “leading UAE commercial gateway to more than 1.5 billion consumers in Asia, Africa,
Europe, India and the Middle East.”

Amenities: No taxes of any kind, no tax audits, no information shared with prying government agencies.

Lichtenstein

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(Source)

Lichtenstein is rumored to be one of history’s earliest tax havens, and it has a well-deserved reputation
among tax dodgers. Unfortunately, the success of evading taxes in Lichtenstein may be leading to its own
undoing! Forbes recently reported that German spies have been dispatched to the country to hunt down
suspicious activity from its own citizens.

Amenities: Very easy for foreigners to set up trusts (just use a locally-hired attorney or nominee.)

British Virgin Islands

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(Source)

According to a Yahoo! News article, ‘More than 400,000 companies share a few local addresses” on the
British Virgin Islands, despite having no employees there and often evading taxes in their native countries as
well. Indeed, offshoring is so integral to the local economy that it provides over half of all government
revenue.

Amenities: Business owners are attracted to the British Virgin Islands for, among other things, the extremely
low incorporation and trust maintenance fees that the Islands have to offer.

Andorra

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(Source)

Those who are looking for a “basic” tax shelter to avoid taxes on personal income (versus sophisticated tax
avoidance schemes for hedge funds, corporations, or investment vehicles) will find what they have been
looking for in Andorra, a small, landlocked country in Western Europe that is one of only three countries
remaining on OCED’s blacklist of “uncooperative” tax havens. While Andorra recently instituted a small
capital gains tax, the overall tax savings still far outweighs it’s liability.

Amenities: No personal income tax.

Switzerland

(Source)

No list of tax havens would be complete without the one that paved the way for them all: Switzerland.
Famously utilized by celebrities and rich people around the world, Switzerland is best known for its “Swiss
bank accounts”, which offer anonymity and protection from prying eyes of all kinds. An eye-opening article
at Tax Justice USA describes how celebrities hide their money in Switzerland. It’s well worth a look!

Amenities: High level of secrecy and confidentiality, no taxes on money saved.

Gibraltar

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(Source)

The UK colony of Gibraltar has a proud and distinguished history as a tax shelter and today, an online
gambling epicenter. But as with many successful tax havens, Gibraltar’s reputation is landing it in hot water
with countries who frown upon tax evasion. Most recently, Spain pleaded with OCED to blacklist Gibraltar
as “uncooperative”, as a result of Spanish efforts to investigate financial corruption and, allegations that
Gibraltar “shelters corrupt businesses.” The EU has also recently pressured the UK to stop offering tax
breaks to offshore companies based in Gibraltar, but this yet too have resulted in any significant changes.

Amenities: Low gambling tax (1% on all winnings), low taxes on offshore corporations

Belize

(Source)

Not all countries are eager to advertise their coziness with tax dodgers, but Belize has nothing to hide.
According to Shelter Offshore, Belize openly writes its laws with an eye toward tax avoidance, further noting
that Belize “learned from the successes and mistakes of other tax havens around the world and designed its
legislation carefully so that it would become THE most attractive tax haven globally.”
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Amenities: Names of directors & shareholders of offshore companies are concealed, very fast
incorporation time (1-3 days)

Vanuatu

(Source)

An important consideration in choosing a tax haven is whether the country in question will share information
with governments or investigators. This is where the Micronesian Pacific island of Vanuatu shines, as it shares
no account information whatsoever with law enforcement. Another interesting tidbit: Vanuatu-headquartered
businesses and bank accounts apparently played a role in voter fraud during the 2004 US Presidential
election!

Amenities: Highest level of secrecy, no income, capital gains, or inheritance taxes.

Greneda

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(Source)

Another tax haven with exceptional climate and cultural appeal beyond its tax advantages is Greneda, a
favorite of banking trust investors around the world. But be careful! As recently as 2001, Grenada was
entangled in a scandal that saw roughly $150 million stolen from some six thousand offshore American
depositors. It was also reported that while many tax havens were beginning to clean up their act, Grenada
“has proved a particularly poor regulator.”

Amenities: Strict confidentiality of offshore corporations and accounts, bank trust laws among the best in
existence.

Cyprus

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(Source)

Named in a recent survey as “one of the most attractive tax havens in Europe”, Cyprus has almost
unprecedented support from the local civilian and business community regarding its taxation practices. In all
of Europe, no other country’s citizens are as happy with the level of taxation currently in effect than those
living in Cyprus. It is also described as an ideal country in which to form an offshore corporation.

Amenities: Low corporate tax rate (10%), no capital gains tax, no withholding tax on offshore companies

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33 Comments

1.

You forgot to put the USA..

a non-resident alien pays no capital gains or dividend tax.

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Comment by tim vanovickoyo — April 22, 2009 @ 6:32 am

2.

Fascinating.
I thought Switzerland was the only tax haven…thankfully not.
Great post.

Comment by BigAl — April 24, 2009 @ 8:18 am

3.

I wish I could pay taxes again but just a fair amount. Not what they ask for by taking three quarters of
your paycheck. City, State, And Federal. Why can’t it be just one?

Comment by Ronald Baro — April 24, 2009 @ 8:38 am

4.

The Cayman islands would be my personal choice, as long as I get to go there to “secure” my money
in person :).

Comment by TheFingDay — April 24, 2009 @ 10:25 am

5.

I’ve been in a position over the last 5 years where I’ve had to research this every 6 months or so, and
I have to say, this list is sadly outdated.

I would recommend to anyone looking to use any one of these to shelter themselves from liability to
do their research very carefully.

Switzerland (and I think Andorra) have recently begun to bow-down to the demands of the EU, for
example, which makes it a less attractive option than it would otherwise have been.

It seems also that New Zealand was left off the list. Standard companies are still taxed at 33%,
however, it has an unusually favourable status for offshore companies/trusts, as well as double-
taxation agreements with many countries, PLUS the passport is very useful for travelling and
respected worldwide (should you need to/be able to obtain one).

With many of the above-listed options, companies attempting to use those jurisdictions to their
advantage (which I fully support, agree with and advocate), will inadvertantly cause the “tax man” to
want to scrutinize the accounts more closely than otherwise possible.
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This is not true with New Zealand - the authors of this article seem to have missed the pages on
Shelter Offshore about NZ (Google “NZ Tax Haven” - it was the second result for me).

**Disclaimer - I am an NZ citizen whom lives permanently outside of the country (since 2004). I own
and operate 3 limited liability companies, 1 of those with branches in other countries, as well as 2
trusts.

Comment by Mathew — April 24, 2009 @ 8:17 pm

6.

Thanks for the info on NZ Matt, but the fact that it holds some advantages over the other shelters
does not mean the article is “sadly outdated.”

Comment by Wayne — April 27, 2009 @ 8:04 pm

7.

Clearly, the tax landscape for US-based companies doing business overseas is about to change
dramatically. It is time to include the USVI as part of your global tax strategy. Why?

1) The United States Virgin Islands is a possession of the United States, not a foreign tax haven.

2) The United States Virgin Islands is not considered a tax haven and is one of only two Caribbean
countries identified on the OECD ‘white list’ of jurisdictions that “have substantially implemented the
internationally agreed tax standard”.

3) There are no bank secrecy laws that are being utilized to hide assets or transactions. The United
States Virgin Islands is not about hiding money from the IRS, but instead about a legitimate, US-
sanctioned program to provide incredible federal tax incentives in exchange for bringing much-needed
business operations and jobs to the US-owned Territory of the United States Virgin Islands.

4) The United States Virgin Islands Economic Development Program is authorized jointly in the
United States tax laws (Internal Revenue Code §934 & §937) and the United States Virgin Islands
tax laws.

5) The United States Virgin Islands Economic Development Program creates jobs in the USVI.

6) The United States Virgin Islands Economic Development Program has been in existence since
1960 as a result of a federal mandate by the United States Congress and it firmly remains in existence
today with US political support.

7) The United States Virgin Islands Economic Development Program offers competitive tax
incentives, which include:

* 90% exemption on US income tax (results in a top federal tax rate of 3.5%)
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* 100% exemption on 4% gross receipts tax
* 100% exemption on 0.75% real property tax
* 100% exemption on 4.2% excise tax
* 100% exemption on 7% US Customs import duty
* 1% VI Customs Duties instead of 6%

8) No need to defer income with a top federal tax rate of 3.5%.

The time is now to include the USVI as part of your global tax strategy. To learn more about how you
and your company can receive these significant incentives, contact us at http://www.usviedc.com.

Regards,
Edgar
Administrator -USVIEDC.com

Comment by Edgar — May 16, 2009 @ 5:57 pm

8.

Given that so many people in the nation, and worldwide have NO money, this list might prove to be
the most insignificant. What about countries trying to help their people eat and have medical?

Comment by Randy — May 25, 2009 @ 3:12 pm

9.

The Channel island of jersey is now considering inheritance tax

Comment by david forde — June 29, 2009 @ 6:07 am

10.

Glad someone mentioned the good ol US of A with Delaware & other states offering the
respectability of USA but no reporting/filing tax etc + bearer shares as long as no trading with US
Often wondered about US focus on Cayman,BVI,Switzerlans etc when they offer so much
themselves

Comment by kevin — June 29, 2009 @ 6:16 am

11.

USVI tax rate of 3.5%. WOW. It is a US owned or controlled place. Can an American live there and
still be an American?
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Does this tax rate apply to income generated from the US and sent to USVI?

Can money funnel through USVI and back to the US and still receive this 3.5% rate?

Comment by Vic Butler — June 29, 2009 @ 6:44 am

12.

And what about Panama, Panama? Why do so many people prefer to stash their savings in that
country?

Comment by Christoph Wuth — June 29, 2009 @ 6:54 am

13.

Why have you not commented on Panama which has some of the most significant bank and entity
secrecy laws in the world? Panama’s laws are so strict that it is criminal to release the name of an
offshore account or entity holder.

Comment by Mark Swanson — June 29, 2009 @ 7:14 am

14.

To Randy: Ah, another let-me-spend-your-money liberal heard from. The whole point of this and
similar lists is specifically to prevent people like you from getting your hands on other people’s money.
You didn’t earn it, but you’re more than happy to take it away and give it away. Do you know that
50% of Americans pay no income tax? And you can bet they’re not all pathetic soles, not by a long
shot. But folks like you want the every declining percentage of Americans who are successful to
shoulder the bill for these people and the wasteful plans of the liberal congresses of this nation. No
wonder the wealthy are looking for places offshore to take their money.

Comment by Mike Sueirro — June 29, 2009 @ 7:26 am

15.

@randy
How about countries that let there people free and prosperous so they can earn they’re food and
medical needs? A whole lot of human trouble is caused by government control, edicts and taxations.

Comment by Ewt — June 29, 2009 @ 7:33 am

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16.

Austria?

Comment by ernst seiler — June 29, 2009 @ 7:55 am

17.

Try Uruguay, You left it off. In this country anyone divulging your personal account details will end up
in prison. There’s a much closer connection here to New Zealand than you think. MATT Check that
one out.

Good info on USVIEDC. Except I would never trust anything that comes out of the USA.

Also a lot of the countries mentioned are no where near as safe as you might think. I know I have had
Offshore Companies and bank accounts in nearly everyone of them, this past 15 years. Anywhere
connected to the UK is being swallowed up by our American Friends in terms of disclosure.
That’s thanks to a jelly livered British Government.

Rgds,

Daniel.

Comment by DANIEL BROWN — June 29, 2009 @ 8:07 am

18.

@Randy - “What about countries trying to help their people eat and have medical?”

Randy, if you’re in the US, give it a little more time. The great leader Obama is working hard to insure
you won’t have to lift a finger for any of these essential services going forward. You will however,
have to get on a bus and lift a finger to continue voting for the architects of these fantastic programs
every couple of years if you want them to continue. Beyond that, just kick back and enjoy the fruits of
others labor!

Comment by FiscalCorruptocrat — June 29, 2009 @ 8:10 am

19.

You totally forgot about Uruguay as well as St. Kitts- Nevis.

Comment by Egad!! — June 29, 2009 @ 11:41 am

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20.

What about Uruguay? Heard it’s also privacy friendly about foreign bank accounts.

Comment by Paul — June 29, 2009 @ 12:36 pm

21.

The Feds can change the USVI rules in the blink of an eye. Not a stable regime.

Comment by Sargam — June 29, 2009 @ 2:53 pm

22.

I think Panama should be included in the list as well as a number of people are going that route.
Others seem to be going a different route than tax havens: Brazil, Chile, Argentina, and Uruguay are
not so much tax havens but places where people, from the US in particular, are moving their wealth
to. They don’t worry about US tax laws if they aren’t there anymore. That could be considered the
ultimate tax dodge, can’t tax who ain’t there anymore.

Comment by Kurt — June 29, 2009 @ 6:58 pm

23.

I have one of my offshore accounts in Mauritius - another offshore country. What are your thoughts
concerning it?

Blair

Comment by Blair Christink — June 29, 2009 @ 11:37 pm

24.

Canada will soon be another-its new tax free account allows citizens to deposit $5,000 annually to
grow, invest, and spend tax free. It’s like an offshore account in-Country!
Next year will be the second of this type of account, and I’ll have $10,000 to spend, invest and live
tax free.

Comment by Greg — June 30, 2009 @ 6:05 am

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25.

What are your thoughts or anyone eles’s on Costa Rica as a safe haven?

Comment by Tim Beall — June 30, 2009 @ 7:33 am

26.

vanovickoyo YOU ARE WRONG im a non-u.s. resident and I pay 28% on dividend gains!
just not on capital gains, which for the past 15 years yuor country hasnt being giving anyways!

Comment by cach — June 30, 2009 @ 9:05 am

27.

the USVI economic program is legitimate so long as you meet the code requirements for sourcing and
residency. USTreasury has not been cooperative in this program and drove most businesses away in
2003-2004.

Comment by jay — June 30, 2009 @ 10:33 am

28.

These places are truly amazing though.

Comment by John — June 30, 2009 @ 5:55 pm

29.

great article but you forget to mention that some of these jurisdictions (Switzerland and Jersey for
example) will NOT open accounts for American citizens after the whole UBS mess. Don’t know
about the others though. Any ideas??

Comment by sergio — June 30, 2009 @ 7:26 pm

30.

Another safe place is Guatemala, Antigua is THE place, for those with modest funds that want
anonymity and a great exchange and cost of living rate. To release info on accounts, the requesting or

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extraditing country must prove in Gua court that there was a Gua crime that was committed related to
the money. None of that “domestic terrorist” distraction while the Fed steals your life savings. And
IRA’s can be used to buy property outright, yes, in foreign countries. Done here in Antigua all the
time. And as a barely making it gringo, I can afford to buy a really nice 3 br home 15 minutes from
Antigua for 75K. I have a huge new, 2 br condo with my very own courtyard (20′x25′)and garage,
for 600 a mo. My maid/cook is $150 a month! If it were not for the big mess in the US, I would never
have moved here, and now I wish I had moved here fifteen years ago.

Comment by BJ Antigua — July 1, 2009 @ 7:23 pm

31.

Well done - in the top 15 Panama and Uruguay really need to be added.

I agree with Kurt from above - if you physically move outside the States - and acquire a second
citizenship and passport - or a new identity altogether - you are way ahead of the game.

Comment by Thomas Crown — July 2, 2009 @ 7:20 am

32.

I would like some information on money invested in

Nicaragua Banks. The reason would be to have it
re invested in Gold Properties in the North East section
of Nicaragu.

we are a Canadian company doing preliminary work on a gold

properties in this area and we need more capital to
operate a small gold mining operation. We can offer
25% interest in this operation for an investment of
$75,000 or it could be broken down into small segments of
$37,500= 12%; or $12,500 = 6%

Would this method help investors with their financial wealth

to have a better much lower tax rate or no taxes to be
paid on this investment
You can contact Jerry Ross Toronto Canada
416 285 1980 or email. rossequip@rogers.com

Comment by jerry ross — July 4, 2009 @ 5:04 am

33.

All of these mentioned off shore sites neglect the risk of that countries governments having a
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revolution… Goodby to foriegners investments / bank deposits.

Comment by Doug — July 4, 2009 @ 8:09 am

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