General Knowledge About Offshore Companies

What is a tax haven?

It's a country, where substantial tax benefits to businesses are provided by the law. In this general sense, it's all relative - because a country with a 12.5% corporate income tax may seem like a tax paradise for a business person, who has been used to a 40% tax in his own country. In these terms, You can find "tax havens" in the most unusual places!

In the traditional meaning, a tax haven is a country where You can register a company which will remain totally tax-free in that country (except for fixed government fees), as long as it doesn't carry out its business inland. Actually, this notion has recently been carried to the next level by some tax haven jurisdictions – notably, the British Virgin Islands – where more modern laws have been adopted, introducing zero income tax for ALL businesses, both domestic and offshore.

A proper tax haven country will in fact have a whole system of laws, regulations and practices, facilitating the attraction of foreign and international business to its shores – and not only by zero tax! Such country, commonly known as an "offshore financial centre", would also have a developed financial system with minimum restrictions, simplified and fast company registration procedures, strict secrecy provisions in its corporate and banking sector, and no information-sharing agreements with other governments.