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Tax Havens

Tax havens are not only small remote Caribbean islands, as is generally thought, but tax havens are actually found worldwide. A tax haven is defined as a jurisdiction with low or zero taxes and features ‘ring-fenced’ tax structures, in which local residents and local companies are excluded from the special tax treatments offered to non-resident nationals and corporations.

Tax havens normally have many common features and characteristics. The first is Legislation for the formation of special entities that are subject to preferential tax treatments, these offshore entities available to non residents or alien subscribers.

Tax havens normally have laws that offer privacy and confidentiality, and clauses in law which prevents effective information exchange with regard to foreign nationals and corporations benefiting from tax privileges. Often, the laws are designed to attract foreign capital and function as economic boosters. Therefore, countries with low or nil taxes that provides confidential financial and legal services to non-resident nationals and corporations could be a tax haven..

The various tax incentives in tax havens include reduced tax rates, tax breaks for a period of time for new businesses, full tax exemptions on all income that is earned overseas, outside the jurisdiction of the tax haven. When referring to offshore tax havens, the last view, exemption on all income that is earned outside the tax haven is what usually characterizes an offshore tax haven. Other incentives may include absence of foreign exchange controls, no capital, gain or wealth taxes, no inheritance taxes.

Confidentiality and privacy are cornerstones of offshore havens. Without privacy law, the reasons for going offshore would seem impractical and pointless, hindering the benefits that are anticipated from tax savings and asset protection strategies. Privacy laws in tax havens offshore make it possible for people to protect assets, especially in cases where governments are repressive and dictatorial, proclaiming the right to seize personal accounts and arbitrarily enforce heirship rights. The features of tax havens should not compromise your financial plans, offshore investments, succession or inheritance plans and asset management strategies.

Tax havens rely on these features to be distinguished from ordinary financial centers or markets. They include privacy, independence or self-governing government, a well developed legislative framework, and a skilled workforce of experts and professionals readily available.

Offshore entities in tax havens include offshore companies known as International Business Companies IBC, protected cell companies, offshore mutual funds, and limited liability companies (offshore LLC), offshore limited liability partnerships and offshore limited partnerships, as well as offshore trusts and offshore foundations. Tax havens are essential to making these entities available to businesses, individuals and groups so that they can pursue various plans to protect their assets from litigation, do business in a manner that helps them to save on taxes and pursue private interests privately.

Offshore tax countries that are considered the best tax havens offshore usually have highly developed offshore banking systems and are home to several branches of international banks. Finding the right offshore plan to suit your specific financial or asset planning needs is not a problem in tax countries that are the best tax havens, while in the meantime you accumulate returns on your investments and assets through managed securities trading services.

The best tax havens are independent nations, or at least countries that may be overseas territories but enjoy a fair degree of autonomy in government and matters such as taxation. Independence is an important factor in considering the best tax havens as it means that a tax haven is not under the control of a sovereign power and is not subject to the arbitrary exercise of control by an outside force.

The following short list of offshore tax haven territories found worldwide: Caribbean, Europe, Africa, Asia, Middle East, and Oceania. This relatively covers the entire globe. Some specific, and highly regarded tax havens are: Dominica, Anguilla, Nevis, Panama, Belize, Isle of Man, Jersey, Guernsey, Singapore, Seychelles, Cyprus, UAE, Switzerland, Cayman Islands, Vanuatu, Mauritius, Hong King, Cook Islands, Bermuda, Vanuatu, St Vincent, St Lucia and the BVI( British Virgin Islands).

Tax havens allow for doing business discreetly, undertaking new ventures and achieving privacy and secrecy when managing family and business matters. A great number of the Fortune 500 companies utilize some form of offshore entity. “Offshore” is a necessary and harmless mechanism that contributes positively to the global system of finance