Tax Havens for International Business

Frontmatter

1. Tax Havens — An Introduction

Abstract

In undertaking a work of the scope and purpose of Tax Havens for International Business, it is imperative that we establish exactly what that scope and purpose is, and set forth definitions.

Adam Starchild

2. Establishing the Foreign Company

Abstract

Because there are no tax advantages to be realised in establishing a single proprietorship or partnership in a tax haven country, the information in this chapter applies specifically to the formation of a corporation, with the word company being used interchangeably with corporation.

Adam Starchild

3. Who Can and Cannot Benefit from Tax Havens

Abstract

Establishment in a tax haven does not solve all the tax problems of every conceivable case. The selection of a tax haven has to be made in accordance with each company’s needs and special requirements. For example, if a particular tax haven has internal tax laws favouring a certain business situation, but the country of residence has anti-avoidance legislation that counteracts the tax haven advantages, these factors must be weighed in making the decisions.

Adam Starchild

4. Tax Haven Classifications

Abstract

Apart from geographical and cultural considerations, tax havens fall into classifications regarding the tax advantages that each has to offer. These tax advantages are a result of internal legislation, and/or tax treaties with other nations. From a practical viewpoint, they are the most important considerations in choosing a tax haven.

Adam Starchild

5. Tax Havens with no Income Tax

Abstract

These no-tax countries share some basic similarities, which are important to a company considering establishing in one or another of them. These factors need to be kept in mind when forming a judgement about the likelihood of the governments of these countries violating their no-tax traditions.

Adam Starchild

6. Tax Havens with no Tax on Foreign Source Income

Abstract

There are many countries that tax only income generated locally. Foreign income is not locally taxable.

Adam Starchild

7. Tax Havens for Special Purposes

Abstract

The Netherlands, Austria, and Luxembourg are all tax havens for holding companies. In addition, Luxembourg is a base for international mutual funds and investment companies, as well as for banking. The Netherlands and Austria have extensive networks of double taxation treaties, which make them of particular interest as a headquarters for an international company structure. Many multinational corporations could save substantially on taxes by reincorporating their headquarters in one or the other of them, or by creating an intermediate holding company in one of them.

Adam Starchild

8. Special Legislation for Regional Offices of Multinational Companies

Abstract

Several countries have passed legislation to attract regional offices of multinational companies, and one tax haven has a tax structure which unintentionally accomplishes much the same purpose.

Adam Starchild

9. Switzerland — not all that it is Alleged to be

Abstract

Switzerland is a civil law country, with an extremely stable political and economic system. While many businessmen associate Switzerland with tax havenry, there are many other tax haven countries that are currently offering more lucrative tax advantages. Switzerland gained the reputation as a tax haven through its secret bank accounts, and Swiss banks still have many foreign depositors, despite the fact that it imposes a high withholding tax rate.

Adam Starchild

10. Liechtenstein — A Special Case

Abstract

Liechtenstein, one of the smallest independent principalities in the world, has been a sovereign state since 1806. Despite its small size (65 square miles), its government, a constitutional monarchy based upon democratic and parliamentary procedures, encompasses all the principles and practices of a modern government, based on the rule of law. It governs on the principle of separation of powers where legislation, administration, and court actions are concerned. In civil law, it conforms in part to the Austrian, and in part to the Swiss, system. Liechtenstein codified a company law in 1926 that is highly regarded as one of the most modern in Europe. Many regulations on legal procedure guarantee the impartiality and fairness of the law.

Adam Starchild

Backmatter