Top 10 best tax havens in 2024

In 2024, interest in tax havens is on the rise, with people wanting to know which countries have the lowest taxes. These are places where companies and individuals move capital, establish offshore companies, benefit from banking secrecy, and pay very low, sometimes non-existent, taxes.

The recent report Global Tax Evasion Report 2024 puts the lens back on tax havens, which tells how around 11 trillion dollars are kept in tax havens worldwide. A figure that corresponds to approximately 12% of global GDP.

The Tax Justice Network ranks the best tax havens every year, through its Financial Secrecy Index. So let’s take a look at the ranking of the 10 best tax havens in the world.

What are tax havens?

The term “tax havens” refers to jurisdictions or countries that offer very favorable tax conditions for people and companies. Among the main characteristics of tax havens, we find:

• very low or zero tax rates on personal and corporate income, capital gains and dividends;
• bank secrecy, with strict rules on banking confidentiality that protect the identity of account holders;
• laws favorable for businesses, with simplified and rapid procedures for setting up companies;
• political and legal stability and an environment that attracts foreign investors;
• minimal cooperation with foreign tax authorities, with limited or no sharing of tax information with other countries.

Tax havens are used to legally avoid or reduce taxes, although they can also be used for illegal activities such as money laundering.

The best tax havens in 2024

Updated to 2022, the Financial Secrecy Index consists of a ranking of the "best" tax havens in the world, taking into account the financial secrecy index, which photographs the level of secrecy of the system legal and financial.

Here are the best tax havens according to Tax Justice Network, an independent network specialized in research, analysis, and protection of tax and financial regulation at an international level.

#	Country	Score	Level of secrecy
1	United States	1,951	67/100
2	Switzerland	1,167	70/100
3	Singapore	1,167	67/100
4	Hong Kong	927	65/100
5	Luxembourg	804	55/100
6	Japan	765	63/100
7	Germany	681	57/100
8	United Arab Emirates	648	79/100
9	British Virgin Islands	621	71/100
10	Guernsey	610	71/100

How does the index work?
As anticipated, the ranking reports the level of financial secrecy permitted by the laws of each country. The secrecy score ranges from 0 to 100.

It also takes into account the amount of financial services the country provides to residents of other countries. These two indicators, combined, determine the ranking.

The 10 “best” tax havens according to Money.it

Accounts held overseas, shell companies and tax havens may be seen as dubious tactics, but there are legal methods available for companies and individuals to evade extremely high taxes imposed by their country.

For individuals, the best tax havens offer very low or even zero taxes on personal income, interest, capital gains, and so on, while corporations can save billions in taxes by booking profits in an offshore company based in a tax haven, and beyond.

Here are the top 10 best tax havens, which are countries in the world that provide the most advantageous conditions for mitigating the burden of taxation in one’s home country. This ranking is based on an analysis by Money.it, which takes into account proposed tax rates, the quality of local banking services, regulations on foreign capital, and the presence of specialized companies.

1. Luxembourg

Luxembourg is a small European country bordering Belgium, France and Germany with a population of 550,000 inhabitants. It is a tax haven because it applies business-friendly legislation that allows companies to save billions in taxes.

Amazon, for example, has its European headquarters in Luxembourg and transfers all profits from sales made in Europe through its office in Luxembourg. The e-commerce giant was forced to abandon the practice and have localized branches handle the sale. This could lead to a sharp increase in the company’s tax burden.
Amazon changed its management after the European Union opened an investigation into tax evasion by this and other companies.

2. Cayman Islands

The Cayman Islands are probably the most loved and well-known tax haven in the world.

Cayman is one of the few countries with a set of laws that allow the establishment and maintenance of a company without paying taxes. If the company is in existence for business purposes then it is perfectly legal and not a tax evasion strategy. However, enjoying tax advantages and managing bureaucracy are quite complex tasks that require the help of a professional.
The tax savings could be worth it as many European and US companies have assets in the Cayman Islands.

3. The Isle of Man

The Isle of Man is defined as a "low-tax financial center", thanks to the absence of capital gains tax, inheritance tax, corporation tax, or stamp duty. The island, located between England and Ireland, also applies a very low-income tax. The maximum rate reaches 20% for a maximum total of approximately 150,000 dollars.

The Isle of Man also offers some interesting pension benefits. Many international companies have employee pension plans held in accounts opened in this small country due to liquidity protection and the ability to retire from age 50.

4. Jersey

Nestled between the United Kingdom and France, the tax haven of Jersey has its origins in the mid-20th century when many wealthy Englishmen decided to move their assets to the island.
Britain’s inheritance tax on amounts over £1 million was 80%, while the self-governing island of Jersey had none.

To date there is still no inheritance or capital gains tax; Jersey has a standard corporate tax rate of 0% - except for taxes on financial services, utilities, and property companies. All this has made the island of Jersey a very popular tax haven in the United Kingdom, where assets worth 5 billion dollars are kept every square mile.

5. Ireland

Ireland is often referred to as a tax haven, although the Irish government loudly denies it.

One Irish-based giant is Apple, which has reported over $180,000,000,000 in offshore profits through its international subsidiaries, thus avoiding having to pay $59.2 billion in US taxes.

6. Mauritius

Mauritius, in the Indian Ocean off the coast of Madagascar, welcomes numerous foreign investments, especially those directed towards India.
Among the mega-corporations that own subsidiaries in Mauritius are JP Morgan Chase, Citigroup, and Pepsi.

In Mauritius, companies are taxed at 15%, but companies that are tax residents can take advantage of tax breaks granted through agreements. Furthermore, capital gains and interest are not taxable in Mauritius, making the island a very attractive tax haven.

7. Bermuda

Bermuda has been a tax haven for years.

Entrepreneurs and companies that move their capital to this country can take advantage of banking secrecy, which even makes it illegal for Bermuda banks to disclose details of the identities of account holders. Big businesses are also attracted to Bermuda thanks to its low taxes, which do not include any corporation tax.

8. Monaco

Monaco has a size of 2.02 km² and 36,000 residents.
The small Principality offers enormous advantages: it has not taxed residents’ incomes since 1869. Anyone who can prove that Monaco is their country of residence can keep all the money they earn, without paying a single euro in taxes.

The context has attracted some of the richest people in the world: one in three residents is a millionaire. Monaco’s popularity as a home for the super-rich has made the country’s real estate market the most expensive in the world. For businesses, the taxes are very low.

9. Switzerland

In Switzerland, the combination of low taxes and a system that maintains banking secrecy on the names of account owners have made the European country a large tax haven.

Switzerland is a financial center highly appreciated by individuals and companies. Geneva, the capital of the canton of the same name, is the 13th largest financial center in the world and one of the most established.

10. Bahamas

The Bahamas is another of the best tax havens in the world, thanks to the absence of capital gains taxes, inheritance taxes, and personal income taxes.
These are all extremely advantageous conditions for the rich, especially for wealthy older people who want to limit the levels of taxation on their inheritance.

Original article published on Money.it Italy 2024-06-26 19:05:04. Original title: I 10 migliori paradisi fiscali nel 2024