Offshore Financial Centres
Also known as Tax Haven
Tax havens are low-tax or tax-free countries with laws that maximize personal and banking privacy while minimizing taxation and regulatory interference for individuals and corporations. Often misspelled as 'tax heavens', these offshore jurisdictions specialize in furnishing financial, legal and business services to non-resident offshore companies, and provide investing opportunities for offshore capital.
Although financial regulations are typically enacted with the best of intentions, they tend to make business more complicated than it needs to be for some investors and businesses. Many offshore financial centres have responded to these concerns about regulations by adapting a more business-friendly regulatory structure.
Many states and nations design their policies with the goal of attracting business from foreign investors who want to be as tax-efficient as possible. These countries have tax policies and bodies of corporate law which provide a good financial climate for large investors and corporations who want to minimize tax exposure and regulatory interference. The state of Delaware in the US, for example, drew business to it in the early 1900's by enacting laws that made it far easier to form and manage a corporation.
Tax haven countries that top the list for the efficient corporate legal structure include Panama and the British Virgin Islands. Other nations on that list, which have also made a name for themselves by building business-friendly regulatory structures, include Nevis, Mauritius and Seychelles, to name a few.
Many investors place a high value on the security of their funds, which is not always respected by their home countries. Although this is not true of all offshore financial centres, nations such as the Bahamas, St. Vincent, Seychelles, Belize and Mauritius have designed their privacy laws with the concerns of foreign investors in mind.
Because privacy laws are constantly shifting in this day and age, it is frequently wise to speak with an advisor about selecting an offshore financial center based on privacy concerns.
An offshore financial centre can be concisely described as a state or nation which has designed its laws in a way that attracts business investors. Some nations make it easy to manage corporations founded in their jurisdiction; others have an especially sensible regulatory structure or stringent privacy laws.
When selecting a suitable tax haven country, be sure to consider all of your investments’ unique needs. With Capstone, we are poised to help you identify these needs and subsequently develop an offshore market strategy that maximizes profitability and long-term success.
Ten Criteria for Choosing the Best Tax Havens
Selecting a tax haven country is an integral part of establishing an offshore structure or financial account. The jurisdiction that you choose should have at the very minimum, the following 10 characteristics:
A Full Fledged Tax Haven - no capital gains tax, no interest income tax, no inheritance tax, etc.
Favorable Incorporation Laws - the corporate laws of the country should enable you to hold 'Bearer Shares', have directors from any country, inexpensive, and be able to incorporate Private Interest Foundations.
Stable Currency With No Currency Restriction Regulations - there should be no restrictions on the movement of funds in or out of the country.
Strict Privacy Laws - there should be strict privacy laws that protect your banking information and corporate book information from anyone, including foreign governments.
Stable Government - the government of the country should be stable and should use the opposite legal system of your domestic country (if your country uses common law, you should seek a country that uses roman law). The country should be safe to visit.
Stable Economy - the economy of the country should be stable.
Excellent Banking System - the banking system of the country should be advanced both in areas of banking infrastructure, government auditing, and technology.
Excellent Communications System - the communications systems of the country should be technologically advanced in comparison with first world countries.
Language Compatibility - the language of the country should be suitable for your understanding.
Time Zone Compatibility & Close Location - the time zone of the country should be such that you can contact your offshore provider or financial institution during your normal domestic business hours & fly to the country quickly if necessary to handle business.
Best Tax Havens List from Capstone Consulting
Capston Consulting specializes in asset protection through the formation and administration of structures set up in multiple tax haven countries, which include anonymous corporations, IBCs, foundations, trusts, bank accounts and other vehicles. We believe the strongest offshore structure is one that takes advantage of a multi-jurisdictional approach, one designed specifically to meet your business and banking needs.
Therefore, although we can incorporate in almost any jurisdiction, the following have special appeal:
- Bahamas
- Belize
- British Virgin Islands (BVI)
- Cyprus
- Delaware (USA)
- Hong Kong
- Malta
- Mauritius
- Nevis
- New Zealand
- Panama
- Seychelles
- St. Lucia
- St. Vincent
- U.A.E.
- U.K.
One tax haven country cannot do it all, however! Panama offers the best all-around option of any jurisdiction, for reasons of cost effectiveness, privacy and flexibility. It is closely followed by Belize.
Other popular offshore jurisdictions such as the Cayman Islands, Anguilla and the Channel Isles are beginning to see the troubles associated with their lack of true independence and association with the EU by proxy of the UK. These and others have succumbed to pressure from the EU, UK and USA in recent years.
Some have adopted undesirable measures; signed information exchange agreements, mutual legal assistance treaties; and tax information exchange agreements which are largely one-sided agreements in favor of the larger countries.
In fact, many of these island jurisdictions, such as the Caymans, contain clauses at the end of their respective constitutions which essentially give the British Crown, through its proxy Governor, the right to enact laws and regulations without any vote at all.
Even though many of these jurisdictions would not be considered privacy jurisdictions in the same way as Belize or Panama, we can tailor solutions that utilize nominees, along with Panama foundations or Belize trusts that will provide maximum anonymity where legitimate business reasons require it.
We have agents in almost every other major offshore jurisdiction, so if you have special jurisdictional requirements or preferences outside of these that are listed in this site, please contact us and we will give you the pros and cons of your choice(s).
Peruse the offshore tax haven list above and be sure to Contact us if you have questions regarding the offshore business structure that's right for you.