Here’re Tax Havens To Hide Your Black Money & Plunder



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Nov 27 2012
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Tax Justice Network estimated a mind-boggling of between USD $21 trillion to USD $32 trillion is sheltered (or rather hidden) in tax havens worldwide. While dirty money or money laundering scheme can be easily made legitimate, the same cannot be said about money plundered via corruption, especially by politicians. You can withdraw a million dollar, visit a casino nearby, play a couple round of roulette game and exchange your remaining chips by requesting cheques to be issued instead. Repeat that a couple of times and voila, your dirty money is now cleaned and you’re untouchable by the Inland Revenue Department.

 

But if you’re a politician, it would be a rather tricky business altogether. For example, if you were a former prime minister and you’ve plundered RM100 billion during your rule, it would be tiring and silly to repeat the stunt of visiting casino and request for  cheques from the cashier thereafter. In a way, it’s easier for drug dealers to launder their drug money than politicians to legitimatize their ill-gotten money. The simplest method for politicians to hide their dirty money is to transfer it to tax haven countries. And when we talk about tax haven countries, the first that comes to our mind is Switzerland.

Switzerland - Tax Haven

Actually Switzerland does not come top as far as “Secrecy Score” is concerned. But you would rather trust Switzerland than Marshall Islands, Bermuda, Seychelles, Grenada, Lebanon, Ghana or Vanuatu, all of which has higher Secrecy Score than Switzerland, for obvious reason – political and economic stability. But some of these unknown tax havens are getting popular because Switzerland’s strict bank secrecy laws are cracking – thanks to powerful foreign regulators from Germany, France, Britain and United States who’re targeting tax evaders.

 

So, if you plan to stash your ill-gotten fortunes elsewhere, there’re tons of tax havens that welcome your money without questions asked. Here’re some of them:

 

 

{ 1 }  UAE (United Arab Emirates)

 

– At US$48,200, UAE has one of the highest per-capita incomes. There’s no income tax or capital taxes in UAE. The country doesn’t need to tax your income simply because oil revenue brings in 80% to the country’s coffer on top of taxes from oil companies amounting to 55% in corporate tax.

UAE - Tax Haven

– As comparison, low-salaried Germans earning $25,000 take home $18,149 after paying $6,851 or 27.4% in taxes – the highest in the world; while Indians take home $18,663 after paying $6,337 or 25.3% in taxes. However, if these Germans and Indians work in UAE, they retain 100 per cent of their personal income in the UAE due to zero income tax.

– However as a citizen, you are required to contribute monthly 5% of your total earning for social security and your employer shall pay 12.5% of your base salary for your pensions and social security. Hence it’s pay to become expatriate employees rather than citizen.

 

 

{ 2 }  Monaco

 

– Recently it was revealed that more than 2,000 Britons in Monaco are costing the UK economy £1 billion a year in lost tax revenue – that’s a lot of money in tax avoidance.

– Monaco is simply irresistible for millionaires and billionaires from around the world who want to spend time and money by day on the Riviera and by night in the Monte Carlo.

Monaco - Tax Haven

– Even Malaysia Prime Minister Najib Razak and his beautiful wife, Rosmah Mansor, could not resists the holiday temptation in Monaco as guests of playboy wannabe Jho Low, so that they can rub shoulders with Hollywood stars.

– Where money talks, even Prince Albert of Monaco couldn’t care less about receiving tainted money in the form of donation from the Malaysia premier, of which the source came from Sarawak Chief Minister, Mahmud Taib, through decades of plunder.

– There are no taxes on resident foreigners unless you’re French. Since Prince Albert and Mahmud Taib are close buddies, you don’t have to be rocket scientist to guess where the Sarawak Chief Minister hide a portion of his fortune.

 

 

{ 3 }  Qatar

 

– Based on Forbes 2012 ranking, Qatar achieved GDP (gross domestic product) of US$88,222, pushing it to top the world’s richest country in the world. It’s 1.7 million population country has no taxes on personal incomes, dividends, royalties, profits, capital gains and property, thanks largely to its natural gas reserves – the world’s third largest.

Qatar - Tax Haven

– However as its citizen, be prepared to pay 5% of your income for social security benefits; while employers contribute 10% for the fund.

– Qatar is pouring money into infrastructure, including a deepwater seaport, an airport and a railway network primarily for the 2022 World Cup. The government is also toying with the idea of implementing VAT (value-added-tax) in an attempt to reduce it’s reliance on oil and gas.

 

 

{ 4 }  Oman

 

– Oman, an Arab state bordered by UAE, Saudi Arabia, Yemen, Arabian Sea and Gulf of Oman is an absolute monarchy in which the Sultan of Oman execises ultimate authority with some powers rested on its parliament.

– Just like its neighbouring Middle East countries, Oman’s major revenue comes from crude oil. Currently, there is no individual income or capital gains taxes in Oman, although citizens must contribute 6.5% of their monthly salary for social security benefits. A stamp duty of 3% is charged on the purchase of property though.

Oman - Tax Haven

– Interestingly, despite its oil wealth, the unemployment rate fort its citizens was at a mind-boggling 24.35% when over 800,000 jobs were being taken by expatriates, leading to several strikes and protests. Only about 35% of the 1.2 million-plus Omani manpower is employed with 25.30% is engaged in domestic work.

– Perhaps the country’s wealth and the high unemployment rate were closely related to the fact that only one third of the population was either illiterate or had only completed elementary school; while 6.2% hold bachelors’ degrees, less than 1% hold master’s and doctorate degrees.

 

 

{ 5 }  Kuwait

 

– Ever wonder why Saddam Hussein invaded Kuwait in 1990s? One of the reasons – Kuwait is extremely wealthy with its world’s fifth largest oil reserves. The country is the world’s sixth-largest oil exporter, so much so that it’s oil revenue of US$63.5 billion accounted to 95% of the nation’s total revenue.

Kuwait - Tax Haven

– The is no income tax in the country but Kuwaiti citizens must contribute 7.5% of their salary for social security benefits; their employers make an 11%contribution.

– Thanks to Arab Spring, the government increased the public sector workers pay by as much as 25% when they strikes and protests.

 

 

{ 6 }  Bermuda

 

– If not for the fact that Bermuda is still a British overseas territory, Bermuda would have been the world’s highest GDP per capita country in 2005, or at least that was what Bermuda claimed.

– With off-shore finance and tourism driving its primary economy, you don’t have to pay income tax here. However as an employee, your boss may ask you ro shoulder up to 5.75% of the 16% payroll tax that your company has to pay to the government.

Bermuda - Tax Haven

– You also have to pay $30.40 per week toward social security insurance and property tax of up to 19%.

– Individuals relocating to Bermuda are charged 25% for goods they bring, but that’s still relatively low so it was not a surprise that up to 20% of its population being foreign-born.

– With Secrecy Score of 85, premier Paula Cox, during the recent C3 Summit was seen aggresively promoting Bermuda as safe haven for Middle East countries especially in the Islamic Shariah-compliant financial oppotunities

 

 

{ 7 }  Dominica

 

– Dominica is perhaps one of the best tax haven where you should park your money. There’s no income tax, capital gains, corporate tax, estate tax, withholding tax, inheritance tax, gift tax and whatnot.

– The Dominica International Business Companies (IBC) Act which was passed in 1996 guarantees that that IBC offshore companies incorporated in tax haven Dominica are exempted for a period of twenty (20) years from local taxation and Stamp Duty. Dominica Offshore Companies can be formed by persons of any nationality.

Dominica - Tax Haven

– IBCs incorporated in Dominica tax haven are not obligated by law to prepare and present annual financial statement for inspection to any tax authority on the island. Offshore business companies in Dominica need only one shareholder and one director to be incorporated.

– As long as you’re willing to pay annual fee to the government of Dominica, you’re ready to rock and roll – not bad for an island that has a Secrecy Score of 80.

 

 

{ 8 }  Andorra

 

– If you want to live a long time and hold onto your money, then it doesn’t get any better than Andorra, a tiny country sandwiched between Spain and France in Western Europe. The average life expectancy of a local is 85 years, 4th highest human life expectancy – that’s a long time to save some nice tax-free money.

– Tourism, its main industry, brings in foreign dollars and tax haven rules apply. This sixth smallest nation in Europe which has population of only 85,000 is not a member of EU (European Union) but perhaps it doesn’t have to – its tourism attracts an estimated 10.2 million visitors annually.

Andorra - Tax Haven

– There are no taxes in Andorra for companies or individuals other than modest annual registration fees, municipal rates, property transaction taxes. There are absolutely no taxes on profits, dividends or income, and with the exception of real estate, no capital gains tax or inheritance tax.

– Although Andorra claims to have strict anti money laundering legislation, it’s an interesting question if the country can do anything about multi-billionaire politicians who plundered fortunes from nation’s coffer.

– But if you’re super-rich who enjoy winter sports and don’t mind staying 20 years in order to qualify to become “privileged citizen”, this tax haven republic (with Secrecy Score of 73) which has no labor problems, virtually no unemployment and the lowest crime rate in Europe could be your paradise.

 

 

{ 9 }  Cayman Islands

 

– The Caymans represent expatriates from 125 different countries and counting. The Cayman Islands are considered a British overseas territory, and, more importantly, considered one of the financial havens of the world. There is neither an income nor a corporation tax nor an inheritance tax in the Caymans.

– With Secrecy Score of 77, financial gurus, accountants to tax specialist (and Ponzi scammers) make a good living here. Individuals open business and trusts and make investments, all while living under the radar of their own government.

Cayman Islands - Tax Haven

– However, as employers,  you are required to provide a pension plan for all your workers. There are import duties, which can range up to 25%. Due to the migration of the rich and wealthly the cost of living is pretty high – an average apartment  easily cost US$550,000 while a house would make you poorer by US$750,000.

– Caymans have put some very strict banking privacy laws in place to protect its clients – it is illegal for person to give out information concerning offshore bank account holder or offshore bank accounts without the permission of the bank account holder. You can bet some money that tons of ill-gotten money plundered by politicians have found its home here.

 

 

{ 10 }  The Bahamas

 

– Among the wealthiest Caribbean countries, the Bahamas’s economy heavily depends on tourism and offshore banking – about 70% of government revenue comes from duties on imported goods.

Bahamas - Tax Haven

– While there is no personal income tax, employees have to contribute 3.9% of their salary, up to a maximum of $26,000 annually, for a form of social security called National Insurance; while employers are required to contribute 5.9% of a worker’s salary for the same scheme. Meanwhile, self-employed individuals are charged 8.8%.

– With Secrecy Score of 83, you can remain anonymous by opening a bank account in the name of an offshore company and you’re set to enjoy online banking facilities – trade stocks, options, bonds, hold assets secretly and literally transfer your ill-gotten money from elsewhere to the Caribbean banks here with maximum secrecy.

 

 

{ 11 }  Bahrain

 

– With Secrecy Score of 78 and being recognized as having the freest economy in the Middle East, Bahrain can easily be your target as an attractive tax haven country.

Bahrain - Tax Haven

– The country derives 70% of its revenue from Abu Safa oilfield, shared with Saudi Arabia. Despite no income tax here, citizens are required to contribute 7% of their total income to the government, while expatriates pay 1%. Employers must also make a contribution of 12% of a citizen’s income for social insurance, and pay 3% for expatriate employees.

– The gap between the rich and poor is huge – most of Bahrain’s wealth is heavily concentrated in the hands of members of the ruling political elite – Sunni Muslims – while Shiites, who make up 75% of the Muslim population, are often excluded from government jobs and form the poorest segment of Bahraini society. Does this ring a bell on how Malaysia’s ruling party UMNO is extremely rich while the village people remain poor?

 

{ 12 }  Gibraltar

 

– Also known as the Rock, Gibraltar is a pretty safe place to store your money and for that same reason, but the British’s only continental European possession is also claimed by Spain. It’s not difficult to understand why.

Gibraltar - Tax Haven

– Gibraltar is a tax and money haven as there is no capital gains tax, estate tax, sales tax, VAT (value-added) tax, inheritance tax or other such taxes. There is a relatively low tax on income, withholding and property and estates though.

– Tax haven Gibraltar imposes a flat low tax of 10% on all offshore business companies or Gibraltar nonresident companies. When incorporating a Gibraltar non-resident corporation the names of the beneficial owners are not shown as public record in the jurisdiction.

 

 

{ 13 }  Isle of Man

 

– If you’re looking for a place to store some money from your government’s eyes but don’t want to leave town, then you can open up an account in the Isle of Man. You don’t even have to live here to do so.

– Believe it or not, Isle of Man, with 28 successive years of growth, actually has Triple-A (AAA) sovereign rating from Moody’s, AA+ from S&P (Standard & Poor) and even IMF’s recognition as a well-regulated offshore financial centre. Hence, you can see tons of big banks here such as HSBC, Santander, Zurich Bank, Standard Bank, Axa, Barclays, Lloyds TSB, Bradford & Bingley and Alliance & Leicester.

Isle of Man - Tax Haven

– Basically, there’s no capital gains tax, wealth tax, stamp duty or inheritance tax and a maximum income tax of 20%.

– However, people who lost money due to banking failures in the past is still haunting prospects. If the authorities did nothing to help customers in the past, what can it do now to ensure a financial institution failure in the future will wipe away your money as well?

 

 

{ 14 }  Hong Kong

 

– Hong Kong is among global tax havens where the super-rich stashed between US$21 trillion and US$32 trillion by the end of 2010. However there was also argument that Hong Kong is not actually a tax haven because of the SAR’s double-taxation agreements with other governments helps it exchange information on suspected tax evaders.

– Perhaps overseas investors generally prefer to transfer their assets and make investments in Hong Kong because there is no capital gains or dividend tax there, hence investors don’t need to pay tax when making a profit on their investment in Hong Kong stock market.

Hong Kong - Tax Haven

– Companies conducting business operations in Hong Kong pay only 17.5% in tax. And if you plan to set up companies in Hong Kong, it can be registered using nominee corporate directors and shareholders, thus protecting the identity of the beneficial owners.

– This could be the reason Sabah Chief Minister nominate Michael Chia as bag carrier after Hong Kong authorities seized RM40 million in the possession of courier-man Michael Chia in 2008. However Hong Kong ICAC can’t do much even it’s public knowledge that the money were illegitimate, after Malaysian government thrown in excuse that it was from political donation.

 

However, when your wealth are in billions and not merely millions, then people would normally put their plunders in developed countries. Dictators such as Mad-Dog Colonel Gaddafi secretly transferred US$4.8 billion (3 billion pounds) of his personal wealth to London before he was captured, humiliated and killed. Of course, that was just the tip of the iceberg considering the former dictator owned around 20 billion pounds alone in liquid assets mostly stashed in London and US$32 billion in Libyan secretive fund in US banks. Ever wonder where former premier Mahathir and AP Queen Rafidah Aziz keep their savings?

 

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Comments

My bet is much of Mahatiu’s ill-gotten wealth must have been parked in Zimbabwe and Kerala,India.
Robert Mugabe of Zimbabwe and Mahatiu are close buddies and both of them is/was a dictator and raider of state wealth and resources.
Kerala is Mahatiu’s “kampung”.

As to the former Old Fat Meaty Minister ,my bet is she stashes her loots in Australia and UK.

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