A tax haven is a country where substantial tax benefits to businesses (usually – international businesses) are provided by the law. In this general sense, it’s all relative: 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).
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, flexible corporate regulations, confidentiality provisions strictly limiting publicly available corporate information, minimum accounting and book-keeping requirements.
