There’s that old saying that only two things in life are certain: death and taxes. However, while there’s still no avoiding the former, it turns out that how much you pay in taxes is actually very much up for negotiation. If you’re smart, you’ll move your money where you only have to pay so much because of the lesser tax burden in foreign lands. We call such countries tax havens and they can be one of the most important financial solutions you ever come across.
Bermuda
This tiny island country has a lot going for it and has long been attracting foreign investors, for good reason. For one thing, it’s located conveniently in the middle of the Atlantic, making it readily accessible to North Americans and Europeans alike.
A number of Fortune 500 companies actually operate subsidiaries there because the country does not have any corporate income tax. In America, for example, corporations need to pay 35%.
In 2010, foreign companies paid an average of just 8% of their profits in taxes. For American companies, this meant they walked away with around $94 billion, while Bermuda itself only reported $6 billion in GDP. This is why foreign profits amounted to 1643% of their entire economic output.
The Cayman Islands
No conversation about tax havens around the world would be complete if we didn’t bring up The Cayman Islands. Aside from being an absolutely gorgeous place to enjoy sun and fun, the Cayman Islands are also an attractive tax haven. Like Bermuda, they have no corporate income tax and a very convenient location. This is why, between here and Bermuda, you can find nearly 65% of all Fortune 500 companies. Combine this with the fact that the country also has no property tax or other familiar versions and it becomes easy to see why so much foreign money flocks here.
Singapore
The city-state of Singapore has a lot going for it when it comes to business. This is why so many are either starting here or moving their office to the Lion City. Amongst other things, it is largely considered the best country for business in the entire world.
However, it’s definitely a worthwhile tax haven to explore too. When the US began cracking down on Switzerland years ago for their lax laws, many investors immediately took their assets to Singapore instead. Today, it’s believed that some 14% of the $1 trillion in global offshore assets is managed in Singapore.
Singapore has no capital gains taxes or taxes in inheritance. Businesses never pay more than 17%, less than half the corporate tax in America and this is before you start exploring all the loopholes to be enjoyed. No individual ever pays more than 20%. For this and many other reasons, Singapore taxation makes it perhaps the most attractive haven for companies and individuals in the entire world.
So if you’re looking to keep more of the money you earn, the good news is that you can easily do this with one of the three tax haves listed above and enjoy a nice tan in the process.