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Tax havens are countries with some of the lowest taxation rates in the world. These rates apply to both corporate income tax and personal income tax. Tax havens therefore play important roles in international taxation and international tax planning.

A tax haven corporation does not need to incur any form of corporate tax, capital tax, or income tax. The tax haven corporation only needs to pay an annual fee to relevant government authorities, but without any threat posed towards the financial privacy of the corporation.

Corporations in tax havens often enjoy easily convertible currency, and legislation that enable tax haven corporations to evade tax laws or regulations. A tax haven corporation evades taxes according to the law of the country and is protected from tax regulations of other jurisdictions. Such a corporation also enjoys a high level of privacy in the management, operation, legal and administrative segments of the company.

What is a Tax Haven

Also, there is no need for the tax haven corporation to maintain any sort of important local presence in the country. An owner of a tax haven corporation does not need to be a permanent resident of any particular country that is a tax haven or be involved in a business that reaches outside of that particular tax haven or country.

Basically, a tax haven provides a very free environment for foreign businesses to thrive in and develop. A tax haven frees a corporation from taxation chains and thus unlocks many opportunities and potentials of the company that would otherwise be restricted within a territory that is not a tax haven.

However, tax havens do pose threats to foreign authorities that do not support its ethics. Such foreign authorities tend to increase the pressure for a collection of tax revenue from tax haven corporations, or request for an exchange of financial foreign revenue information from tax havens. Hence, such authorities have led to many tax havens to sign tax information exchange treaties (TIEAs) and mutual legal assistance treaties (MLATs). Meanwhile, such an exchange of information that is agreed between the tax havens and foreign authorities does not mean that the financial security or privacy of the tax haven corporation is being compromised. Such exchanges of information are done also in official secrecy and such information is carefully undisclosed or revealed in any public forms. A private exchange of such information, rather, encourages more foreign authorities to invest in tax haven corporations, as there would be a mutual sense of security.

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Paul Hype Page & Co. is an ACRA-certified business adviser. Our team of seasoned professional can help you set up a company in Singapore very quickly and easily following all legal entities, and offer you sound advice on how to make it successful too.

In addition to business registration, we’ll also guide you how to:

  1. Write a business plan – Learn how to write a compelling business plan by accessing our sample business plans, or other helpful market research information
  2. Perform market research – Understand your business market, learn how it can enhance your business growth, and how to properly conduct a market research for your business
  3. Corporate Secretary Services – If you are registering a company in Singapore, you will need a Corporate Secretary. Corporate compliance in Singapore is a complex legal requirement for all Singapore registered companies. Our company secretarial team helps our clients and their officers to fulfil their statutory obligations in an efficient manner.
  4. Manage your finances – We’ll offer you the best resources and information to help you fully understand all financial concepts and teach you how to perform basic accounting tasks like budgeting, bookkeeping, financial analysis, among others

To further aid you, we have provided here a resource area with industry specific information and other industry resources to help you successfully start and run your business.

  1. Singapore Business Opportunities 
  2. Singapore Business Licences
  3. Singapore Tax Planning
  4. Singapore Company Incorporation
  5. Singapore Company Yearly Statutory Requirements
  6. Singapore Working Visa Guide

 

What is a Tax Haven FAQs

Offshore Banking, Sizable Business?2020-06-23T15:13:00+08:00

Although incomplete, statistics point out that offshore banking is a large business. In 2007, the OECD predicted that offshore capital amounts between $5 trillion to $7 trillion, and up to $21 trillion to $32 trillion sheltered in unreported tax haven around the world.

Now, this is where it gets interesting. If this assets earns 3% each year, and such capital were tax levied at 30%, it would still create a wealth between $190 billion to $280 billion in tax revenues, which is more than any other tax shelters.

How many Business Licenses are required by an Offshore Company?2020-06-23T15:12:46+08:00

The number of business licenses required by any company in Singapore is entirely dependent on the type of business activities to be conducted. This is true of offshore companies as well. Thus, there is no set number of business licenses required by an offshore company – it may be as few or as many as necessary.

Why must Singapore have Tax exemptions on International air travel and shipping Income?2020-06-23T15:12:16+08:00

The countries to which these tax exemptions apply are heavily involved in shipping and air routes to and from Singapore. Therefore, these exemptions encourage the people of these countries to continue to engage with and conduct business activities in Singapore.

2021-02-05T09:26:59+08:00January 7, 2015|Comments Off on What is a Tax Haven?
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