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Tax Haven Companies and Their Advantages

Tax Haven Companies

An investor or business owner looking to profit from reduction or relatively low tax levels would think of operating an offshore company in a tax haven. This basically gives foreign investors the ability to enjoy low tax rates where otherwise they might have to submit to high tax levels in their home country. While many have come to view this step as a legal means of tax avoidance, it is often the case that this helps business owners immensely. Then again, there are many tax haven countries around the world which are able to give offshore companies zero taxation on their total revenue. However, this information is misleading as it states that companies would not have to pay anything on their taxable income. On the other hand, it might turn out that this is not the best option for offshore companies as there might be other fees, prices or rates that international companies might need to pay to the government in order to operate from that particular country.

A good rule of thumb would be to seek out services of an accounting or consultancy service firm. These professionals have numerous years of service and expertise dealing with tax havens and would be able to give clients a better picture of the situation rather than reading about the world of tax havens from newspapers like The Post and Guardian in the UK. These professional consultants would be able to offer assistance and information to clients on the law governing tax havens. For example, they would be able to let corporate clients know that it is perfectly all right to access banking accounts even while operating offshore. The local government would have jurisdiction over the tax haven company. However, most tax havens operate with much privacy and without due course, would not be privy to the information on the profit or financial situation of the company. This development means that commentators for years have found tax haven companies a little perplexing and top businesses who have developed tax haven companies are found to be making profits disproportionately due to their lower tax rates. Still, tax haven companies are entirely legal and multinational corporations don’t make the decision to set up offshore tax haven companies only based on that one factor.

Another advantage of tax havens is the fact that there are various locations around the world for businesses to choose from. Whether it is a big country such as the United States or an island such as the popular British Virgin Islands in the Caribbean, investors are given the luxury of choice in this matter. As such, companies and large firms are able to operate from virtually anywhere based on the lists of available tax haven countries. Currently, there are many huge corporations which have money deposited in tax haven subsidiaries companies worldwide. In 2012, a report estimated that each country which supports tax havens have at least 3 billion worth of currency invested via numerous companies. This means that top decision makers or business owners are making profits of 4 to 5 times just from setting up tax haven companies and possessing shares and stocks in the company. Of course, the argument is that the wealthy operate tax haven companies to secrete their cash away from taxation in their home countries and are effectively ensuring that the system works for them. Still, while all these heads of corporations are definitely not saints, it is ultimately up to them to come up with the best system to protect their wealth.

One thing that interested investors should understand is that there are certain limitations to operating tax haven countries. While they do have many advantages that would be able to effectively increase their revenue and net worth, certain countries do not recognise tax haven companies. For example, tenders for defense or government contracts would not be considered simply because these are from tax haven corporations. Application for home loans and other types of schemes would also be slightly more difficult due to the nature of the company. This is the main reason why businesses interested in tax haven companies should seek out more information from consultants who would be able to give them more perspective on their decision. While it is perfectly legal to set up an offshore tax haven entity, there are various ramifications involved in the process. Write an e-mail to your professional consultant today for instant response and more information on tax haven companies and they will get back to you as soon as possible.

Our reputation as a professional and ethical international company providing corporate administration services, has enabled us to develop a global network that gives us a platform to provide quality incorporation services to our clients in different countries including Panama, Singapore, and several jurisdictions within the United States.

However, each of these jurisdictions have different ratings when it comes to their suitability as tax havensWe also provide solutions for companies that operate within a single jurisdiction.  Here, you get the services of a registered office and local agent services.

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Posted on December 26, 2013 at 7:56 pm
Categories: Business Opportunities in Singapore

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