The Very Wealthy’s 20 Favorite Tax Havens
Companies and rich people can legitimately keep their money in tax havens to avoid paying higher taxes in their own countries. Furthermore, certain tax havens are more well-known than others.
Tax Justice Network, a campaign organisation, has created a Financial Secrecy Index for global tax havens, ranking each country based on offshore financial services and secrecy.
Scores on ownership registration, legal entity transparency, tax and financial regulation integrity, and international cooperation were determined using 20 factors.
The worst 20 financial jurisdictions are listed below.
Cayman Islands No. 1
With a secrecy score of 76, the Cayman Islands, an offshore British territory, is classed “exceptionally secretive” on the index for 2020.
With some of the world’s largest banks, hedge funds, and businesses shifting their business to the low-tax region, these three Caribbean islands account for 4.58 percent of the global market for offshore financial services.
It is the world’s leading hedge fund domicile, with financial services accounting for one-third of the country’s GDP. The value of foreign assets was discovered to be 1,500 times the size of the domestic economy.
2. United States of America
The United States received a 63 on the secrecy scale. The country controls a whopping 21.37 percent of the worldwide offshore financial services sector.
When it comes to clamping down on tax haven abuse and tax evasion, the United States is a source of concern, with Delaware being one of the simplest countries in the world to set up a shell company.
The 1921 Revenue Act lured tax-avoidant foreign capital to the United States by exempting interest income on deposits held by non-residents, and subsequent tax reforms have made the States even more appealing to individuals wishing to send their money abroad.
3. The Swiss
With a secrecy score of 74, Switzerland just misses out on the “exceptionally secretive” category.
The country controls 4.12 percent of the worldwide offshore financial services sector. This is largely due to its 1934 banking secrecy rules, which made it a criminal offense to expose information, albeit being eased in subsequent years.
Switzerland is also a safe jurisdiction due to its political neutrality.
Financial services contribute for more than 10% of Switzerland’s GDP, with UBS and Credit Suisse holding half of the country’s banking assets.
Hong Kong is number four.
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