Corporate Tax Havens


A Corporate tax haven is a country or jurisdiction which sets the right conditions and encourages corporations to set up and use the said country as its residence. Corporate tax havens are available in many parts of the world. Corporate tax havens are mostly offshore jurisdictions. Some examples of corporate tax havens are Dominica, Belize, Anguilla, Nevis, Bahamas, Cayman Islands, British Virgin Islands, Seychelles, Singapore, Mauritius, Hong Kong, the Republic of Panama and Vanuatu among many others.


Corporate tax havens are well known for designing tax regimes which are very attractive to corporations. The majority of corporate tax havens have zero taxation schemes applied to offshore companies which are incorporated in the jurisdiction but have no business operations there. Offshore companies whose incomes (interest gained, dividends, and profits) are gained outside of the jurisdiction will pay no taxes at all. These Corporate tax havens are often referred to as pure tax havens and includes offshore jurisdictions such Dominica, Nevis, Anguilla, Panama, BVI and Seychelles among others. There are those corporate offshore tax havens which applies very low taxes to the earnings of their offshore companies. These jurisdictions are called low tax jurisdictions. A great example of this is Barbados which taxes its International Business Companies (IBCs) a low tax rate of between 1 and 2.5% on their global earnings each financial year.


Corporate tax havens are characterized for protecting the privacy of its clients. In offshore tax havens the privacy of offshore corporation beneficial owners is protected by not filing the names with the public registry. Added protection can be given by using nominee services for shareholders and directors of offshore corporation.


The legislations of most corporate tax havens provide privacy for offshore corporations. The laws of most offshore jurisdiction stipulate that the accounting records or financial statements of offshore corporations are not to be filed with any government authority. This therefore means that the financial status of these companies remains private. Corporate tax havens with low tax rates in place require that the companies registered their file their annual tax returns and accounting records. Many offshore corporations take advantage of the fact that most tax havens have no double tax treaties in place with other governments ensuring that their tax information and accounting records are not sent back to their respective governments which would subject them to taxation.


Most Corporate tax havens offer offshore banking and allow offshore corporations to set up offshore bank accounts. Offshore tax havens are well known for providing privacy for their clients and most have banking secrecy laws in place which protects offshore bank account holders.


Corporate tax havens have many benefits. They help many offshore corporations to reduce tax liabilities in a legal manner. A corporation incorporated in a corporate tax haven is guaranteed to grow since they have the right conditions. Corporate offshore tax havens are very effective means for asset protection. The privacy and confidentiality provided by offshore corporate tax havens makes asset protection even better.


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