NEW YORK, June 26, 2012 — The best tax havens for American companies happen to be in locales that most Americans wouldn’t mind spending some time in. From the sunny shores of Cyprus to the beaches of Anguilla, small nations have found a lucrative sideline in catering to Americans looking to escape from American taxation.
Fair? Maybe not. Legal? Well, actually, yes.
The sun isn’t the only reason that companies warm to offshore tax havens like Dominica, Nevis, the BVI, Barbados, Panama, the Cayman Islands and Hong Kong. As long as a company is incorporated in an offshore tax haven, it will pay no local taxes on income earned abroad, not even if it is earned in the United States.
In most offshore havens, companies are required to pay annual license fees to the local governments. But some countries are very lenient about when that has to be paid. For instance in both Dominica and the Bahamas, a twenty years tax exemption is granted as an enticement for American companies.
Don’t own a business of any size or kind? Then you will not reap the benefits of your American compadres who do own businesses. All Americans, regardless of where they reside, will pay U.S. taxes.
Thinking of parking your personal savings offshore? Remember this: Americans with $10,000 or more in overseas bank accounts must disclose all of their foreign accounts.
Of course, all Americans looking to base their companies in a foreign country should consult an attorney stateside and one in the locale in which they are considering incorporating their business to ensure a smooth and legal process.
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