Caribbean Tax Havens

Caribbean tax havens are amongst the world’s most popular and well respected tax havens. The Caribbean region has been known to produce outstanding tax havens which are also offshore jurisdictions. Tax havens in the Caribbean are known for the benefits they provide for a large client base: some of the benefits of Caribbean tax havens include, reducing tax liability and providing privacy. Some of the more respected tax havens in the Caribbean are Dominica, St Kitts, Nevis, Barbados, Anguilla, the British Virgin Islands (BVI), Belize and the Bahamas among others.

Offshore Tax Haven

Tax havens are best described as countries which provide shelter from taxation. Taxes imposed in a tax haven can be very low or nonexistent. A tax haven which imposes no taxes is usually referred to as a pure tax haven and the Caribbean has many of these. Most countries in the Caribbean resorted to becoming tax havens as a means of maintaining their local economies and removing the dependency on more developed nations, a trend once very prevalent in the region.

As offshore tax havens countries in the Caribbean region offer professional offshore services which include the incorporation of offshore companies or international business companies, offshore banking, the formation of offshore (exempt ) trusts, the formation of limited liability companies (LLCs), exempt insurance and reinsurance, the registration of vessels and ships and the formation of foundations among other services. These offshore services are all backed by modern and progressive legislation each possessing distinct characteristics based on the country of origin.

Offshore Tax Havens in the Caribbean

The offshore havens of the Caribbean are well known to provide clients with legal means to reduce international taxes. All the offshore tax havens mentioned above are pure tax havens with the exception of Barbados which taxes offshore business companies a small percentage of its overall annual profits. Barbados imposes taxes on its offshore business companies at the low rate of between 1 and 2.5%  and the amount of taxes paid are calculated based on the profits of the offshore corporation. The other Caribbean tax havens charge offshore business companies zero taxes on profits gained from outside of the jurisdiction. Offshore jurisdictions such as Dominica guarantees an offshore business company a 20 year period of tax exemptions as stipulated by the offshore legislation.  Caribbean offshore jurisdictions also exempt offshore business companies, trusts and foundations from Stamp Duty on transactions made on behalf of these entities.

Offshore Tax Haven Benefits

Tax havens in the Caribbean all provide privacy for the beneficial owners of offshore business companies and bank account holders. In most offshore jurisdictions in the Caribbean, legislation has been passed prohibiting the disclosure of information regarding beneficial owners of offshore companies, foundations, trusts and bank accounts. In the offshore jurisdiction of Nevis for example, privacy is protected by the Confidentiality Relationship Act. In the Commonwealth of Dominica divulging information regarding offshore business companies results in a monetary fine and a possible prison sentence.

Most of the major tax havens in the Caribbean have not signed double tax treaties with other countries in the world, making tax information of clients safe from the tax authorities in the respective resident countries. Caribbean tax havens further provide privacy for offshore clients by enabling them to incorporate offshore business companies with the use of nominee shareholders and directors. This practice is allowed in Nevis, Dominica, Anguilla among others.

The tax havens of the Caribbean have been around for over one decade and have great experience in providing asset protection for clients and, Caribbean tax havens are good at providing secrecy for clients.

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