The ‘Pandora Papers’ scandal has affected personalities around the world. An investigation by the International Consortium of Investigative Journalists (ICIJ), which is based on 11.9 million leaked confidential files of 14 companies dedicated to setting up trusts and fictitious companies in tax havens . As a result of this news, it is of special interest to know which are the main countries considered tax havens in 2021.
Tax haven: What is it?
The first and most important thing is to know what exactly a tax haven is. Based on the definition of the Organization for Economic Cooperation and Development (OECD), it is any jurisdiction that meets the following criteria: lack of transparency, minimal or non-existent taxes on income, absence of substantial economic activities in the place destination and lack of a system to exchange information .
Countries that are tax havens in 2021
The latest report of the Council of the European Union indicates that the main tax havens are the following.
Belice
Belize is located on the east coast of Central America, and has a population of about 400,000. It is a tax haven in the broadest sense of the word. Incorporating offshore companies is 100% legal and, in addition, it is a very simple procedure . In this way, both natural and legal persons obtain certain protection against taxes on foreign earnings.
Marshall Islands
The Republic of the Marshall Islands is an island state located in the Pacific Ocean. In the country’s tax jurisdiction, all foreign companies and non-resident companies that do not carry out any business activity within the island do not have to pay taxes . Nor do you have to present annual accounts and the economy is very stable because the official currency is the US dollar.
British Virgin Islands
The British Virgin Islands are a British Overseas Territory. They are located in the Caribbean Sea, east of Puerto Rico. Although it has a population of just 36,000 inhabitants, it has more than 400,000 companies. The IVBs have hardly any taxes : there are no taxes on income or profits … Income is collected through the tax on wages and land ownership.
It should be noted that, according to figures from the United Nations Conference on Trade and Development (UNCTAD), in 2019 the British Virgin Islands received 57,997 million dollars in foreign direct investment , much more than other developed economies such as France, Canada and Germany.
