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Offshore Company Formation in any Tax-Haven around the world.  |
Tax Free JurisdictionsThere is good news for the US or Canadian person. Even though taxes are to be paid on worldwide income generated in a controlled foreign corporation, one's privacy can still be protected. To maintain one's privacy, the stock in the offshore corporation can be owned by a private Nevada "C" Corporation (or for a Canadian an Alberta Corporation). This way, the income produced in the foreign corporation is reported on the tax returns of the corporation and not the individual. This can also be a tremendous tax-saving strategy, because the "C" corporation pays lower income taxes in most brackets than does an individual. Due to the recent Organization for Economic Cooperation and Development (OECD) and European Union regulations, many jurisdictions that have a dependence on Great Britain have decreased or eliminated their privacy laws. The offshore tax havens that have independence from Great Britain have retained their strong privacy laws. Many of these countries receive a majority of their income from offshore services so they have a financial incentive to keep the privacy laws in place on a long-term basis. BahamasOriginally on the FATF's blacklist of non co-operative financial centres, but ta ken off in July 2001 after passing 10 new Acts. Financial services accounts for over 20 per cent of GDP; banking provides $300m annually in revenue. The Bahamas is a very low tax jurisdiction. Banking, wealth and asset management are core industries, with around $200bn under management. The island also boasts some 700 mutual funds with around $100bn. Taxation, Globalization and Free Trade in the Bahamas - An article by Kevin Burrows BermudaGeared more towards the corporate than retail world. Boasts the largest captive insurance industry in the world, but only three banks offering banking and wealth management services to expats. Bermuda also boasts an experienced trust industry, is growing as a fund management domicile including hedge funds, and is pushing itself as an e-commerce hub. Escaped the wrath of the OECD et al thanks to strong regulation - it is thought of highly. British Virgin IslandsMade its name via low-tax International Business Company legislation in 1984. Over 300,000 IBC's have since been established and similar legislation is adopted throughout the offshore world. More than 2,000 mutual funds worth an estimated $55bn are currently incorporated in the BVI, while several hedge funds are here. In all, 11 banks operate on the BVI, catering mainly for high net-worth wealth and trust management for expats. The government launched new laws to placate the international community's concerns over financial regulation. Cayman IslandsIt's hard to believe that palm-fringed Georgetown is the world's fifth biggest financial centre - with 580 banks, 520 insurance companies and a mighty 3,000 mutual funds with assets of $215bn. It's developing as a hedge fund domicile too. The Cayman Islands is one of the world's lowest ta x domiciles with no personal or corporate taxes. Deposits, banking, wealth and fund management, and trust and company administration comprise the bulk of financial services geared towards expats. The Cayman Islands has suffered from an image crisis for many years, borne from weak financial regulation. A negative KPMG report into offshore centres and general ill sentiment throughout 2000 and 2001 has forced the Caymans to tighten its financial services industry. Continues to be monitored by the OECD. CyprusSince 1974, the island of Cyprus has been split 70:30 between the Greek Republic of Cyprus and the poorer Turkish-run north. Business and general economic standing have suffered over the continued and sometimes bloody antagonism between the two sides. All financial services take place in the Republic and focus primarily on low- tax International Business Company legislation and offshore banking. Over 50,000 IBCs set up since 1976, many of them Middle Eastern or Russian in origin looking for a regional business hub. Offshore banking is the second most impor ta nt activity, with assets of just under $11bn. The Republic was severely criticized across 2000 and 2001 for lax financial regulation by both the OECD and the FSF. Cyprus has begun to tighten its legislation and the IMF has given the island a nod of approval. Ultimately, the Republic is dropping offshore finance by 2005: its main priority is accession into the European Union, much like Malta. DubaiDubai and Abu Dhabi vie as the United Arab Emirates ' main financial centres. Eighty per cent of revenues are non-oil. Expats are well catered for via banking, asset and investment management. The popularity of Dubai as a regional and international business hub attracting skilled expat labor continues; so many banks and financial institutions have set up shop there, including HSBC and Skandia. Since September 11, financial regulation in the Middle East region has been questioned, especially Dubai 's use as a conduit for terrorist and criminal funding. DublinOver the last 10 years, Dublin has rapidly grown into the second largest domicile of offshore funds after Luxembourg , but many expats probably don't know they have a Dublin-domiciled fund or investment plan. There is no offshore banking or wealth management here as there is in places like Jersey . The low- tax International Financial Services Centre (IFSC), a district of Dublin has been beneficial to Ireland 's economy, attracting hundreds of international, blue chip banks and businesses from around the world. Corporate tax is 10 per cent, for example. Irish GDP grew 10 per cent in 2000 and is forecast to grow by 8 per cent in 2001. GibraltarFinancial services have suffered due to on-going political squabbles between Spain , the UK and Gibraltar since 1713. But this centre will do all it can to avoid being subsumed back into Spain and to protect its low- tax financial services industry. Gibraltar makes much of its prestigious EU membership - jurisdictions such as the Isle of Man and the Channel Islands are not members. Gibraltar caters mainly to the banking, fiduciary and wealth management needs of expats in southern Spain and Portugal . Gibraltar is a small jurisdiction (bank deposits total $3.5bn) and has no real fund management industry. In the past it suffered from lax regulation and a bad reputation, but has now received good endorsements from the OECD et al. GuernseyThe Channel Island of Guernsey fits the image of an "offshore financial centre" well. It offers a comprehensive range of financial services for all expats, from deposit ta king, banking, wealth and fund management, and fiduciary administration. Is developing as a leading private banking hub, and the latest figures show deposit and fund levels are at an all time high. Guernsey , like most centres, says that its regulation and know-your-customer rules are better than most financial centres. Has started to become more outspoken and high profile; it recently set up the Guernsey Promotional Agency to foster better relations with the business world. Hong KongIt's been tough for Hong Kong ever since the Asian financial crisis hit hard in 1997, despite strong GDP growth in 2000 and a rising number of firms setting up here. GDP growth for 2001 is set to be a humbling 0 per cent. Despite strong competition from Shanghai , HK is predicted to be China 's premier "world" city and act as a link between a developing WTO-approved China and a west keen to trade with China 's 1.2bn consumers. Hong Kong has yet to hit former glory but continues to be the region's key financial centre for banking, asset management and low- tax trust and company admin. Over 60 of the world's largest banks are here. Isle of ManThe Isle of Man is still a small player but has been one of the most successful offshore centres for growth during 2001: to ta l net assets of investment funds stood at $6.73bn as at June 30 2001 , an annual rise of some 19.75 per cent. Corporate taxation is set to fall to 10 per cent, pitching the island directly against Dublin as an offshore funds domicile and business hub. Three industries are zero-rated for ta x in the Isle of Man : shipping, insurance and fund management. The island plans to become a low tax hub for e-commerce companies. Already the government has awarded three online casino licenses - to Stanley Leisure, Sportech and MGM Mirage (one of the largest US casino groups) - and will issue more in the coming months. But the biggest area is the new, fledgling market for international and cross-border pensions, pitching the Isle of Man against the likes of Luxembourg - also keen to capture a market measured in trillions of dollars, not billions. JerseyJersey boasts a well-established banking, wealth management, fiduciary and fund financial services industry for expats. Joined Guernsey in defense against heavy-handed attacks on financial regulation and has refused to play ball unless other countries do so too. Around £250bn is invested in financial institutions and finance contributes around 60 per cent of government tax revenues. LiechensteinUntil 2001, Liechtenstein was one of the most secretive financial centres. A series of financial scandals and intense international pressure over secret bank accounts and low- tax company structures thrust this jurisdiction into the spotlight. Whilst complaining that it was being disproportionately targeted, it has moved quickly to hire a troubleshooter from the Swiss National Bank to clean-up legislation. The new Due Diligence Authority has been launched; its first job is to check but not reveal the beneficial owners of Liechtenstein companies - some estimates suggest as many as 80,000 structures exist. The country's 12 banks manage about $70bn. LuxembourgThe world's largest offshore fund's domicile with $800bn is also one of the biggest offshore banking and wealth management centres handling about $600bn. Banks operate like Swiss rivals, with strict client confidentiality and secrecy rules. Luxembourg is in the middle both geographically and politically of the emerging eurozone and the European Union, so steps to harmonize taxation may clash with its financial services industry - if the EU is looking to tighten up the world's financial system it should lead by example. Then again, it's hard to imagine what will then become of Luxembourg 's $1,400bn offshore assets and it is doubtful Luxembourg will do too much to threaten its wealth. It has the highest GDP per capita in the world. SingaporeDespite a recessive economy, Singapore is working hard to improve its re ta il financial services industry. The Monetary Authority of Singapore has instigated several legislative acts to revitalize the sector. Financial services still grew 4.1 per cent in 2000 and account for 10 per cent of GDP. About 700 local and foreign financial institutions are here, offering a wide range of financial products and services. Singapore competes with Hong Kong for regional business in the Pacific rim but has never really threatened the latter. A large tech sector has suffered with the general global down-turn. SwitzerlandStill on top despite continued assaults on its entrenched banking and client confidentiality rules. Any such changes to Swiss law must be put before the electorate and they are less than likely to twist an industry that brings in over SFr44bn to the economy every year. The concept of "Swiss banking", an expensive luxury for high-net-worth individuals, is nevertheless under fierce competition from cheaper jurisdictions such as the Channel Islands . Poor equity markets and general performance are making many ask if Swiss wealth management is ultimately worth the cost.
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