Tax havens are defined as small, well-governed jurisdictions that impose low or zero tax rates on foreign investors. By doing so, they attract a considerable amount of individuals (and businesses) from high-tax countries who want to reduce their tax liability.
Despite the bad press that tax havens get, it is possible – and very common – to utilise tax havens legally and legitimately, as long as you properly declare any income to HMRC. The key to success is understanding the best way to make the most of your personal or business income legally. It’s about making sure your income is as tax efficient as possible.
With this in mind, let’s look at some of the world’s most lucrative tax havens to invest your money and maximise your income.
The Cayman Islands
Arguably the most efficient tax haven in the world, the Cayman Islands have a strong reputation for providing a comprehensive range of financial services. With no corporate tax whatsoever, many companies choose the Cayman Islands to shield themselves from increased and substantial taxes. Furthermore, those who value privacy will enjoy the strict laws that the Cayman Islands have to offer, ensuring third parties cannot access account holders’ valuable information.
Along with staying neutral in conflicts, the Swiss are well-renowned for the robustness and success of their financial institutions. The country offers privacy and security perks, but one misrepresentation is that Switzerland is entirely tax-free. While high-net-worth individuals will pay low lump sums on the money they bank, it is important to note that there is still some tax to pay.
Panama’s offshore jurisdiction offers a wide array of excellent financial services, including offshore banking and the incorporation of offshore companies. It has a territorial tax system, meaning the income earned outside the jurisdiction is not taxed. It also offers an additional benefit that isn’t available in many offshore tax havens: the ability to conduct business within the offshore jurisdiction. However, any business conducted within the jurisdiction is subject to local taxes.
Luxembourg is one of the wealthiest countries in the world, largely thanks to its financial sector and business-friendly policies. The country keeps everything under lock and key with strict privacy laws, ensuring its investors feel secure knowing that only they can sign off the sharing of their personal financial details.
The Bottom Line
When choosing which tax haven to bank in offshore, the amount of tax you can levy should not be the only factor to consider. For example, you should avoid investing your money in an offshore account held in a politically unstable country that could put your hard-earned funds at risk.
At Turner Little, we have over 20 years of experience in international baking and a thorough understanding of offshore banks, as well as the rules they must follow in each jurisdiction. This means regardless of your country of residence, we can arrange a bespoke bank account that works for you.
To discuss your requirements, speak to a member of Turner Little’s trusted team today.