Earlier this year, a huge dump of files known as the Panama Papers revealed the dealings of Panama-based law firm Mossack Fonseca and brought low-tax countries into the spotlight.
Mossack Fonesca set up companies in low-tax countries such as the British Virgin Islands, Panama, and the Bahamas. Many of its clients used Mossack Fonesca’s services in order to make their companies more tax-efficient.
While Mossack Fonesca mainly set up companies in a small handful of countries, there are plenty more nations around the world which wealthy individuals and companies use in order to reduce their tax bill.
As well as having low tax, many of these countries are located in obscure and often idyllic locations. Here are some of them.
A British Overseas Territory in the Caribbean. In 2008, during a Democratic debate, Barack Obama once called a building in the Cayman Islands that was the registered office of 18,000 companies 'either the biggest building or the biggest tax scam on record.'
A Crown dependency of the UK located in the English Channel, there is no inheritance tax, capital gains tax, or standard corporate tax in Jersey. The Panama Papers revealed one Jersey bank appeared to have set up over 900 offshore companies for its clients.
Another British Overseas Territory, this time located in the North Atlantic, Bermuda is famous for its sandy beaches and its reputation as a tax haven. It has no income tax, capital gains tax, VAT, or sales tax and specialises in handling business services for non-resident companies.
Another British Crown dependency located in the English Channel, Guernsey is smaller than neighbouring Jersey. Like Jersey though, companies pay a 0% standard rate of tax on the island.
This exotic island nation in the Indian Ocean is hugely popular with tourists. Once tax credits are taken into account, the tax rate for global businesses is just 3%.
A British overseas territory in the Caribbean is well known for its popularity for those looking to reduce their tax burden. More than half of the companies revealed in the Panama Papers were incorporated in the British Virgin Islands.
Located in the Pacific, non-resident companies in the Marshall Islands, which were named after a British explorer who visited the islands in the 18th century, are exempt from all taxes. The Marshall Islands are on an EU tax havens blacklist.
Like many tax havens, Barbados is located in the Caribbean and is famous for its luxury resorts, incredible scuba diving, and its residents' love of cricket. Its corporate income tax rate is less than 1%.
A 115-island country located in the Indian Ocean. The Panama Papers show that companies close to the Syrian government set up shell companies in the Seychelles which helped them avoid international sanctions.
The South Pacific island nation has a corporate tax rate of 0%. It is one of just five jurisdictions that have refused to sign up to global tax transparency rules.
The Panama Papers showed that members of the Chinese Communist Party's Politburo Standing Committee had companies registered in the small South Pacific nation.
Niue is a tiny island nation in the South Pacific. It doesn't host too many offshore companies anymore, but between 1996 and 2004, Mossack Fonseca set up 6,000 companies in the country -- which has a population of just 1,600.
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