A tax haven refers to a state or territory with extremely low or no tax rates. They are an ideal place for affluent individuals, corporates, and financial institutions to stow away their monies and avoid taxation. Below are the top 10 tax havens you should know about:-
1. Luxembourg
Unlike other jurisdictions that provide offshore services with the aim of providing a platform for tax avoidance, Luxembourg offers corporations a business-friendly and low tax environment.
2. Hong Kong
Hong Kong is arguably Asia’s financial capital and features the region’s leading stock exchange market. The island charges zero taxes on foreign income, and 15% on local income. No taxes are charged on capital gains, sales, dividends, and interests.
3. Vanuatu
Tax incentives, secrecy laws, and client confidentiality are among the factors that have made Vanuatu a popular tax haven. The jurisdiction’s offshore banking is quite active and it boasts of several licensed offshore banks.
4. Switzerland
The Swiss banking laws that ensure maximum secrecy have made it an ideal tax haven. These laws along with the country’s quality of life and political stability have made it a favorite offshore financial center for businesses.
5. Cayman Islands
This is one of the jurisdictions with the largest tax loopholes. The region’s government does not charge income taxes, capital gain, and does not withhold taxes of alien corporations.
6. Bermuda
Bermuda’s minimal regulations on business and taxation of corporate and personal income have made it an ideal tax haven.
7. Singapore
Singapore’s banking laws make it relatively easy for foreigners to open bank accounts. Further, Singapore has risen to one of the most appealing economic regions in South East Asia due to its success in trade. Its stringent laws on secrecy and the ease of storing assets have made it a popular tax haven.
8. United Arab Emirates
UAE has emerged as a top investment hub over the last two decades. This has been aided by the country’s relative political stability and favorable tax laws. These tax laws have fueled massive foreign investments from leading global corporations.
9. Bahrain
With banking laws that are almost similar to those in UAE, it is not a surprise that Bahrain ends up on this list. Besides Bahrain not charging taxes on capital gains and personal income, it has tax treaties with developing countries that favor offshoring. Corporates take advantage of the secrecy laws in this region to hide hard cash and assets.
10. Isle of Man
The Island which is situated between Ireland and England charges no taxes on capital gains, capital transfer, and turnover. The charges on income tax are also little, with the highest being 20%.
Big corporations and individuals have been known to take advantage of the above tax haven locations to set up offshore accounts and pay less on their tax bills.
