Tax Havens. Benefits of forming a Company in Tax Havens and opening bank accounts.
Worldwide Incorporation Services specializes in Company Formation in Tax Havens and opening bank accounts.
What is a Tax Haven?
What is a tax haven? What many of you may not realize is you most likely have heard of one in the media without even realizing. When you heard of people incorporating “offshore” investments or “offshore”bank accounts, you heard people making use of tax havens. A tax haven is a country or state is country with more lenient tax laws than your home country in which you do business. A tax haven can also be a country that practices financial secrecy, which is a legal principle that financial institutions would not have to provide information regarding your financial records, to the authorities unless certain criteria were to be met, for example a criminal complaint being filed. Tax havens have been a popular choice for many wealthy individuals as less taxation obviously means more money in your pocket. Surely there can’t be areas in the world with more lenient or perhaps non-existent tax laws than my own, but there is, and it just so happens there that roughly 15% of the worlds countries are tax havens according to U.S. National Bureau of Economic Research.
Why You Might Consider a Tax Haven?
Well the main and obvious reason that most people are drawn to tax havens, is simple the lower or potentially non-existent tax laws that exist in the tax haven are better than the ones in your own country. Many wealthy people enjoy the prospect of paying less taxes, after all you worked hard for that money, it is unfair for someone to come and claim a large portion of your hard earned revenue for your hard work.
Many people whom are interested in hiding their funds from their home country for what ever reason that may be would also reap the benefits of a tax haven, due to the fact that they practice financial secrecy, meaning they do not need to provide financial record to a foreign country. Financial secrecy of course can be circumvented by foreign authorities if certain criteria are met, such as the person whose financial records are in question were to get arrested in the country that is requesting financial documents.
Choosing a Tax Haven
Luckily for you most tax havens are in the Caribbean, which means you’ll have plenty of vacation spots that also double as a tax haven. However, if the Caribbean doesn’t work for you there are plenty of other tax havens throughout the world, no matter which continent you are on. When choosing a tax haven, you’ll need to know what needs you are looking to fulfill by moving money offshore, are you an individual or a corporation? Are you looking to avoid high taxation? Are you looking to avoid persecution from your own country? These are all questions that need to be considered when choosing a Tax Haven to invest in.
Why a Corporation Might Consider a Tax Haven?
A corporation has many of the same reasons an individual would have to join a tax haven, usually it is to avoid the high taxation of their country. A corporation is less likely to make use of a tax haven for illegal purposes unless the business was built upon shady business practices and criminal activity. Many corporations already incorporated in some way a tax haven, usually too increase revenue, some just a “rainy day” fund, a little something off the books for emergencies, perhaps an economic collapse, or you need to get away for whatever reason.
Best Tax Havens in the World
The best tax havens in the world are in Caribbean, the ones you want to look for are the ones who offer a tax haven company option and no taxes for a tax haven company. Some countries such as the Bahamas offer twenty years of no taxes, while others you have to pay a small yearly fee for a license to operate. When choosing your best option for a tax haven you want one with the lowest possible interest rate and highest amount secrecy if possible, this is to allow you to have the most control over your assets.
Benefits of Tax Havens
A tax haven can be used to gain more income, or to build your company. You could also use a tax haven as a new form of life insurance, so when you pass on you could leave a large sum of un taxed money for your loved ones. A tax haven is beneficial to both parties involved, the country who is a tax haven for corporations and the corporation or the individual.
A tax haven often isn’t as industrial as other countries whom have higher tax laws (countries who can afford higher taxes) so to make up for lost revenue they impose higher banking taxes on financial institutions, which in turn allows the lower corporate taxes and individual taxes. Tax haven have been known for their economic stability because of these low taxes imposed, such as Switzerland receiving constant praise for their economic stability and most recently Ireland in 2010.
Tax havens are legal and if you aren’t breaking the law you can easily make money using tax havens to your advantage. Many people have a misconception when it comes to tax havens and believe that they are used exclusively by sleazy bankers and criminals, but the truth is they’re law abiding financial institutions used by law abiding people who are resourceful with their finances. With the proper amount of research, you to can soon be moving your money around to various tax havens, in order to gain more income and economic stability in times of a worrying economy.
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