What are the most famous tax havens?

  • Posted By : Admin
  • Tax havens
  • 26-07-2018
Index [Hide] [Show]

When we speak about the most famous tax havens we mean those tax haven territories that have maximum levels of security, transparency and sophistication and, as a result, attract huge amount of investments. To know which tax havens are the most famous in the world we have to get familiar first with the concept of "tax haven". The tax haven is a country where the investments of non-resident individuals are not subject to any type of taxes: income, corporate, inheritance and indirect taxes. 

Factors that influence a tax haven to be more famous than another 

The 8 factors that determine why one tax haven becomes more famous than another one can be explained with the following points: 

  1. Geographical location of the tax haven: It is not the same if a tax haven is located in Europe, for example, in Monaco, or in Africa, for example, Liberia. The main difference in the location is the economic influence of neighboring countries and therefore possible investors that this tax haven might have. In the case of Monaco it has bordering countries with a very high per capita income, such as France, Switzerland and Italy. In the case of Liberia, the bordering countries have one of the lowest per capita incomes in the world. 
  2. Tax pressure of high tax countries: The relationship between countries is a key for a tax haven to be more famous than another. If a country with a very high per capita income includes it on a blacklist of tax havens related to money laundering of capital this tax haven will lose its appeal. 
  3. Registration of ships and planes: The great fortunes have large ships, planes and, therefore, will search for countries with favorable laws for the registration of large ships and aircrafts. The main objective is to save taxes and eliminate liability to third parties in case of having any problem. 
  4. Security: The great fortunes seek maximum security when they travel to tax havens. Any investor travelling to a country where he will keep his funds wants to be sure that neither kidnapping nor robbery will take place.  
  5. Legal security: Tax havens are legally perfect countries. Their laws are based on legal systems of countries with high taxes but adapted to international investors so they can pay the least possible taxes. 
  6. Transparency: Currently all the world's tax havens whether they are more or less famous are transparent. The latest law on the automatic exchange of information has placed tax havens at the same level of transparency as of countries with high tax rates. 
  7. Stable banks: The great fortunes seek stability and safety and even in case of bank bankruptcy need to know that their funds are insured.
  8. Political stability: The most famous tax havens are the most stable countries in the world. They are countries with parliamentary democracy and do not usually have problems with other countries except with taxes. 

List of the most famous tax havens in the world 

The 10 most famous tax havens in the world are the following: 

Switzerland: it is the best tax haven in Europe and the most famous one in the world. It specializes in finance and attracts world´s biggest investments. 

Monaco: this tax haven specializes in obtaining tax residence for people with an excessively high income.

Cayman Islands: extraterritorial jurisdiction specializing in finance, registration of ships and aircraft. Clients of Cayman are usually those with a medium-high income.

San Marino: offshore jurisdiction specialized in obtaining tax residence at high rents to pay less tax.

United Arab Emirates: country for very high incomes. It specializes in fiscal residence, registration of ships and aircraft. The strong point of the Arab Emirates is its geographical location. On the contrary, the extreme temperature in summer makes other countries to have a more privileged location.

Bahrain: tax paradise for excessively high incomes. It specializes in tax residence and ship registration. Like in case of the UAE, the extreme temperature in summer doesn’t let it to scale to a superior position.

Hong Kong: it is the most famous tax haven in Asia. It specializes in finance and is the safest place to keep money outside of your country of residence. The investors that tend to invest in Hong Kong are usually of medium-high income.

Bahamas: it is the second most famous tax haven in the Caribbean. It specializes in finance and ship registration. The stockholders that invest in the Bahamas are usually of medium-high income.

Uruguay: it is the best tax haven in South America; also know as the Switzerland of America. It is a country specialized in finance.

Jersey: country specializing in finance, inheritance planning, registration of ships and aircraft. Investors that invest in Jersey tend to be very high-medium income.

list of the most famous tax havens in the world

Final conclusions 

Investing in a tax haven that is more or less famous is the best option that investors have to relocate their money and not declare it when they are kept outside of their country of residence. The key factors for investing in a tax haven are geographical location and political/financial stability. The investor will always choose a tax haven that is located as close as possible to his country of residence and has highest level of financial and political stability. 

The list of most famous tax havens described above does not mean that the rest of tax havens are not good for investment. This list is focused on very high rents, but does not mean that high rents don’t invest in other less glamorous tax havens, such as Panama, Belize, Seychelles or Costa Rica. 

Contrary to everything previously mentioned, we consider the world's least famous tax havens those that have been directly or indirectly related to money laundering or the development of criminal activities, such as Gibraltar, Aruba, Trinidad and Tobago, Saint Kitts and Nevis, Dominica, Cook Islands and Samoa.