What is a tax haven?

The term “tax haven” refers to countries that impose low or no tax. Many companies and high net-worth individuals use tax havens to stash away money that would be taxed in their resident countries. It is estimated that around 8% of the world’s wealth is kept in such offshore destinations. Tax havens are also typically secretive about sharing information about account holders.

Not all tax havens are entirely tax-free. Many charge relatively lower taxes, but they levy high customs and import duties to compensate for this. Companies might need to pay for new registration and renewal charges. Other fees, like licensing charges, also cover the loss incurred due to low taxes. A low tax rate also attracts business investments.

Here’s a list of countries that are considered as tax havens:

The Caribbean island nation of Bermuda doesn’t levy any income tax. Currently, there are no personal or corporate taxes in this country.

The city-state of Singapore charges low taxes to investors and companies. It also has reasonable corporate tax rates and offers tax incentives.

The island nation is considered a low-tax jurisdiction for businesses investing in Asia and Africa.

The famous tourist destination is also considered a tax haven because of its low tax levels and stringent privacy laws. It has entered into favourable tax treaties with many countries.

The tiny European nation has business-friendly policies which help businesses to keep their tax liability low.

Similar to Bermuda, this island nation in the Caribbean doesn’t levy personal tax, capital gains tax, corporate tax and payroll tax.

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