However, the proliferation of tax information exchange agreements promoted by the OECD and the legislation enacted by the United States under the FATCA program has significantly reduced the effectiveness of these tax havens. Because of their rules protecting financial privacy, lack of a personal income tax, and absence of a corporation tax, several Caribbean countries are considered true tax-havens.
Anguilla
One of the few British Overseas Territories that may be considered a tax haven is the island of Anguilla. Offshore firms are exempt from paying taxes since their profits are earned outside the country's borders. Is a true tax haven that does not levy any taxes on money generated outside its territory? Because neither individuals nor companies are required to pay income taxes, inheritance taxes, or capital gains taxes in Anguilla, the territory may be referred to as a "tax haven."
Bahamas
In the 1990s, the Bahamas introduced laws that simplified establishing offshore firms and multinational commercial enterprises inside its jurisdiction. This helped the country solidify its reputation as a tax haven at the time. Offshore banking, offshore trust management, offshore business registrations, and even offshore ship registrations are just some of the offshore financial services that may be obtained in the Bahamas. Offshore corporations and individuals with offshore accounts do not need to pay taxes on revenue generated outside of the Bahamas since there is no tax responsibility.
Barbados
Because Barbados taxes offshore corporations at a rate of 1-2 percent and, more significantly, because the tax rate falls as a company's profitability increases, Barbados cannot be considered a valid tax haven. Despite this, Barbados offers a relatively low tax environment for offshore firms incorporated in its jurisdiction. In addition, it has a flourishing financial industry that provides services in offshore banking and establishing offshore corporations.
Belize
Belize's Laughing Bird Caye Establishing offshore banks and organizations in Belize is not a complicated procedure. The same can be said for establishing trusts and foundations. In addition, Belizean offshore corporations are exempt from paying taxes on money received by their companies in other countries. In addition, interest or capital gains made via offshore bank accounts or trusts are not subject to taxation.
Islands of the British Virgin Group
The British Virgin Islands (BVI) do not impose taxes on offshore accounts; however, they have tax information exchange agreements (TIEAs) with 19 other countries, one of which is the United States of America. This is the case even though legislation is in place to regulate and protect the privacy of corporate. There are currently no plans in place to negotiate any more tax arrangements.
The Islands of Cayman
The Cayman Islands are one of the world's five biggest offshore financial hubs. Although we cover the subject of the Cayman Islands in more depth in a different piece, it is essential to note that the Caymans have a long-standing reputation as a significant worldwide financial hub.
Arenal Volcano
Although it is not strictly speaking a tax haven. It provides a wide range of tax benefits, one of the primary reasons multinational firms have settled in the country. For example, Costa Rica exempts several firms from paying any taxes for eight years to incentivize and attract new companies.
Dominica
There is no personal income tax, corporation tax, or tax levied on income or capital gains obtained outside of the Commonwealth of Dominica's jurisdiction, making it a true tax haven. The Dominican Republic should not be mistaken for the Commonwealth of Dominica. It does not levy any taxes on withholding, gifts, estates, or inheritances, which are taxable events.
Panama
Even if the Panama Papers crisis has partially damaged Panama's image as a tax haven, the country is still a land of opportunity for individuals looking to decrease the amount of taxes they are required to pay. Several Caribbean countries are considered true tax-havens. Offshore firms registered in Panama are permitted to operate inside and outside the country's borders without being subject to taxation.
The Islands of Saint Kitts and Nevis
Offshore firms and their owners do not have to pay income tax, withholding tax, capital gains tax, estate, and inheritance tax, corporation tax, or any other local tax since St. Kitts and Nevis is a true tax haven that does not levy any taxes on money generated outside its territory. Because there are no currency controls in place, money can enter and leave St. Kitts and Nevis with little to no restrictions and without any inquiries being made.
