TAX HAVENS OF THE WORLD

There are only two things you can be sure of in life: death and taxes

TAX HAVENS OF THE WORLD

Taxes - we will see how we can

avoid this today
What is a Tax Haven ?

a place of safety or sanctuary

a country that offers individuals and

businesses little or no tax liability

Types of Offshore Jurisdictions

What is Offshore ? Zero Tax Jurisdictions

Eg. British Virgin Islands, Samoa & Bahamas

Low Tax Jurisdictions (Concessional Tax Systems)

Eg. Singapore, Hong Kong & Mauritius

High Tax Jurisdictions

Eg. USA, Australia, UK, Netherlands & New Zealand

Tax Haven Countries

Europe

Bahamas & Carribean

Eire Isle of Man Jersey Alderney Guernsey Monaco Gibraltar Madeira Andorra Luxembourg Liechtenstein Malta Cyprus

Africa

Liberia Seychelles Mauritius

Bahamas Bermuda Turks & Caicos U.S. Virgin Islands British Virgin Islands Anguilla Antigua Nevis Montserrat Barbados Grenada Netherlands Antilles Aruba Panama Costa Rica Cayman Islands Belize

Pacific Rim

Cook Islands Samoa Niue

Tax Haven Countries

FIRMS DEALING IN TAXHAVEN C OMPANIES

S/NO Name Address Tel Fax E-Mail & Url singapore@ offshore-inc.com ht t p://www.offshore-inc.com singapore@ ocrasing.com.sg ht t p://www.ocra.com/ singapore@ mossfon.com.sg ht t p://www.mossfon.com/ singapore@ accept or-t rust .com

OFFSHORE INCORPORATIONS LIMITED Group (OIL Group)

80 Raffles Place, #1 6-20 UOB Plaza 2, Singapore 6438 0838 048624 24 Raffles Place, 26-04 Singapore 048621 Clifford Cent re, 6535 3382 62210592

6438 2023

2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5

OCRA (Singapore) Pt e Limit ed MOSSACK FONSECA & CO. (SINGAPORE) PTE. LTD. ACCEPTOR PROFESSIONAL DIRECTORS

6535 3991 62210591 6438 1 332

1 Cecil St reet , #1 38 4-01 Singapore 069538 B,

80 Raffles Place, #1 6-20 UOB Plaza 2, Singapore 6438 1 330 048624

INSINGER DE BEAUFORT MANAGEMENT (SINGAPORE) PTE 24 Peck Seah St reet , #05-01 /05 Nehsons 6226 2236 LTD Building, Singapore 07931 4

6224 5660 infoasia@ asia.insinger.com

Choosing an Offshore Jurisdiction

Political and Economic Stability Infrastructure Confidentiality Taxation Modern Corporate Legislation

Modern Corporate Legislation

Issue of bearer shares Optional audit of accounting records Minimal captialisation requirements Appointment of nominee directors and officers Maintenance of a local registered office and resident agent Minimal or optional corporate filing obligations Flexibility for holding meetings of shareholders and directors Ability to transfer the corporation from one jurisdiction to another

Benefits of Using Offshore Companies

International Trading Arrangements Investment Companies Licensing Arrangements For Intellectual Property Shipping Services Consultancy Services Finance And Banking Captive Insurance

International Trading Arrangements

The offshore company is used for international trade

Agency commissions Transfer pricing of goods Confirming house To purchase plant and equipment for hire or leasing to an offshore contractor or for a particular project

Investment Companies

To hold investments in

Publicly Quoted Companies Foreign Real Estate Underlying Subsidiary Associated Companies

Joint Venture Projects

Licensing Arrangements

Intellectual Property

Intellectual property such as patents, copyrights, designs, computer software and technical know how can be owned by an offshore company
The offshore company will then licence the intellectual property to third parties

Benefits of Using Offshore Companies

Shipping Services

These registries offer low cost registration fees and tax exemption on income earned from shipping activities

Consultancy Services

Sell the services of entertainers or sportsmen to international promoters

Finance And Banking

Offshore Finance Company

Captive Insurance

Offshore captive insurance company

Implications For Professionals After 11.09.2001

Greater KYC requirements

KYC = Know Your Customer

Banks and Financial Institutions passing on greater responsibilities to the intermediaries. Legislation against criminal activities Moral Issues More requirements for banking relationship.

Tax Competition Vs Tax Harmonization

Tax Competition
Sovereign right to determine how income is taxed within countries borders

Tax Harmonization
Macau From a gambling enclave to a offshore tax haven 1st Nov 1999 Licensing system for offshore institutions LDA (limited company by shares) can apply for the offshore permit Can open an office at Macau Full exemption from income tax Additional Requirements

At least engage 5 resident staff Occupy an independent office Documents to be translated to Chinese & Portuguese Annual audits to be prepared by Macau registered auditing firms.

British Virgin Islands

Located approximately 80 km east of Puerto Rico Worlds premier offshore centre with over 290,000 companies incorporated in the last 10 years Legal system based on English common law No taxes levied on IBC companies with the exception of the annual government licence fee which is US$300 Must have a Registered Agent and Registered Office in the the BVI, provided by a licensed trust company At least one director and corporate directors are permitted No requirements for a Register of Directors to be kept at the Companies Registry Details of the directors do not appear on any public records

British Virgin Islands

Company should have at least one shareholder and bearer shares are allowed No requirements for Annual Returns, Annual Meetings or Audited Accounts

Mauritius

OFFSHORE COMPANY (Tax Treaties Company)

An Offshore Company must have at least two directors and two shareholders. Corporate Directors are not permitted Must appoint a Mauritian resident as company secretary Must prepare audited accounts and file it with the Mauritius Offshore Business Activities Authority Audited accounts have to be filed within 6 months after financial year-end Non-compliance will entail a revocation of the offshore licence Offshore companies that wish to utilise Mauritius international tax treaties must demonstrate that management and control are exercised in Mauritius

Mauritius

OFFSHORE COMPANY (contd)

Register of Directors and Members must be kept at the Companies Registry Offshore companies incorporated after 1 July 1998 are subject to taxation at a rate of 15% as a Tax Incentive Company Must have a Registered Office and Agent in Mauritius

Mauritius

INTERNATIONAL COMPANY

Corporate directors are permitted Precluded from issuing bearer shares Register of Directors, Members and Officers must be registered with the Registrar of International Companies Must have a Registered Office and Agent in Mauritius

Samoa

Chinese character names are permitted in addition to English names Companies may pay their licence fees for 5, 10 or 20 years in advance. Substantial discounts are offered to companies that elect to take up this offer Must have a minimum of one director, one shareholder and a secretary Corporate directors are permitted and bearer shares are also allowed Must have a Resident Agent and Registered Office in Samoa, provided by a licensed trust company Shareholders may waive the requirement for annual returns and/or audited accounts The Offshore Banking Act 1987

Samoa

The International Insurance Act 1988 The Samoan International Companies Act 1987 Debt is specifically defined in the Act as excluding a tax of any foreign government. No double tax agreement with any other country

Gibraltar

The status of HNWI and residency is particularly Attractive for individuals of various nationalities such as British, German, Canadian, Swiss and French. HNWI will only pay tax on the the first of 45000 of Assessable income with a minimum tax payable per annum of 10,000. To qualify for the status of HNWI

Approved residential accommodation in Gibraltar To submit a Curriculum Vitae qualification work experience and 2 references Banker to confirm that 1 million worth of bank deposits are available

500 Application processing fee

Bermuda

Public Listed Holding Companies

Bermuda tax haven company is used for public listing and is accepted by Hong Kong and Singapore stock exchanges.

Caymand Islands

NESDAQ accepts companies incorporated in Cayman Islands. Popular destination for offshore mutual funds, offshore banking and captive insurance. Note :

Letter of good standing has to be issued by the lawyer/accountants for the appointment of directors. The statutory registers are to be maintained in the Registered Office of the company at the respective countries.

Netherlands

Corporate Headquarters

The government does not tax income/profits, dividend received from subsidiary and gains and losses from sale of its shares of a foreign based company established in Holland.
The exemption only applies if the non-resident corporation makes direct investment and holds a continuous and substantial interest in the principal of at least 5%.

International accounting firms with worldwide connections establish their headquarters in the Netherlands. United States company or corporation in other country use the Dutch subsidiary as a foreign base company for operating branches or subsidiary in third countries.

Offshore Trust

Most favored Tax Havens for operating Offshore Trust are Registration of the trust and

Cook Islands Samoa Mauritius

Government fees Annual Fees Trustee fees Government fees

US$ 3500

Us$ 1500 US$ 300

The principal benefits to be gained from an offshore based trust include :

Minimisation of tax liabilities on income derived by the trust Reduction of liability to asset or wealth taxes, such as estate or gift taxes and capital gains taxes Enhanced privacy and confidentiality Ability to develop a flexible asset protection plan Flexibility in planning of family or marital asset allocations Enhanced environment for diversification of investment portfolios Flexibility of income or capital distributions amongst family members

Offshore Trust

An offshore trust may be used, inter alia, to:

Own shareholdings in offshore based corporate entities Hold investment portfolios either through personal family trusts or private investment unit trusts Facilitate the conversion of offshore income to capital Own life assurance policies issued on the life of the Settlor Provide a mechanism for accumulation of tax effective retirement benefits under a personal or employer sponsored pension, superannuation or provident fund

Facilitate the tax effective accumulation of income and capital for a charitable or non-charitable purpose
Protect offshore assets and liquid onshore assets from claims against the Settlor or beneficiaries

Offshore Trust Cook Islands

First offshore jurisdiction to enact legislations to facilitate asset protection under the International Trusts Amendment Act 1989. Further amendments were enacted in 1991, 1996 and 1989. As a result, the Cooks Island currently has the most modern international trust legislation. Particular emphasis on the protection of assets, the protection of beneficiaries and flexibility of control by the settlor.

Offshore Trust Cook Islands

Asset protection features of the Cook Islands legislation include:

An international trust will not be void or voidable as a consequence of the settlors bankruptcy notwithstanding any law to the contary in the settlors domestic jurisdiction. If there is an improper transfer, the creditors may only claim damages from the trust. As a general rule, foreign judgements cannot be entered against a international trust in the Cook Island.

An international trust cannot be fraudulent against a creditor or settlor if:

The transfer of property takes place more than 2 years after the date upon which the creditors cause of action arose: or The transfer takes place within 2 years from the date of the cause of action accruing to that creditor and the creditor fails to bring that action within 1 year from the date of such transfer.

Offshore Trust Cook Islands

The settlor may retain certain powers and benefits without invalidating the trust. The interest of a spendthrift beneficiary in an international trust may not be attacked by a creditor. A trust will not be set aside because it avoids forced heirship rules in the settlors home jurisdiction. Co-trustees may make valid decisions as a majority rather than unanimously. Title to trust property may be held by a single co-trustee. The settlor, beneficiaries and the international trust are not subject to any form of taxation in the Cook Islands.

Private Foundation
Panama Foundation Liechtenstein Foundation Austria Foundation
Founder(s) Supervisory Bodies (Protectors)

Foundation Council

General and / or Special Attorneys-in-fact (Optional)

Asset Manager

For the benefit of:

Beneficiaries

Private Foundation - Panama

A Private Foundation is created when one or more natural persons or legal entities formalise a document known as a Foundation Charter, which is registered at the Public Registry of Panama, through which the parties undertake to make a donation not less than the equivalent of US$10,000. Foundations have certain legal advantages that make them attractive for offshore use.

They are not subject to any form of taxation, assessment or levy in the Republic of Panama. Law does not require the names of the real Founders, Beneficiaries or Protectors to be revealed. No annual meeting of the Founders, Beneficiaries, Protectors or supervisory bodies is required. Not required to file annual income returns or financial reports. No restrictions on maximum assets allowed. Allowed to carry out any kind of civil or commercial transactions, anywhere in the world and in any currency.

OECD And Harmful Tax Competition

To assist governments to respond to harmful tax competition OECD issued in May 1998, a report on harmful tax competition. The report set forth guidelines dealing with harmful preferential tax regimes and makes a series of recommendations for combating harmful tax practices. The factors are

No nominal effective tax rate Lack of transparency Absence of requirement of substantial domestic activities

6 tax haven jurisdictions to eliminate harmful tax practices by Dec 2005

Bermuda, Cayman Islands, Cyprus, Malta, Mauritius and San Marino

Elimination Of Harmful Tax Practices

By Dec 31, 2001

To commit to the OECD plan to eliminate harmful tax regime. To indicate a detailed plan indicating how it will achieve transparency and effective exchange of information on all tax matters. Any regimes attracting business without substantial domestic activity must be eliminated.

By Dec 31, 2002

To ensure authorities have access to regarding beneficial ownership of all companies within its jurisdiction. Required to set up legal mechanisms so that financial accounts will be drawn up in accordance with internationally accepted accounting standards.

Elimination Of Harmful Tax Practices

By Dec 31, 2003

To establish a legal mechanism that allows information to be provided to the tax authorities of OECD countries for investigation and prosecution of criminal tax matters. Any restrictions on the ability of entities qualifying for preferential tax treatment to do business in the domestic market will be removed.

By Dec 31, 2005

To establish a legal mechanism that allows information to be provided to the tax authorities of OECD countries for the determination, assessment and enforcement of all tax matters. Any restrictions that deny the benefits of preferential tax treatment to resident taxpayers, to entities owned by resident taxpayers, or to income derived from doing the same type of business in the domestic market, will be removed.

NEW ZEALAND Foreign Trust

A foreign trust, is one where the Settler : Non Resident Beneficiaries : No New Zealand Beneficiaries Income : No New Zealand Source of Income Trustees : New Zealand Trustees Neither the trust nor the beneficiaries are liable to New Zealand Income Tax. With effect from 01/04/2005 the provision to the income tax authorities will come into force. In future foreign trust will need an IRD number, keep records for New Zealand tax purposes, provide information when it is set up or appoint New Zealand trustees.

TAX HAVENS OF THE WORLD

There are only two things you can be sure of in life: death and taxes