Armenia launched last year, the first-ever tax-free business zone which is meant to mainly cater to high-tech manufacturing companies.
The tax-free zone covering around 10 hectares (25 acres) of land and office space is designed for companies specializing in information technology, engineering, telecommunications, renewable energy and pharmaceuticals.
Companies based in the zone will be exempt from profit, value-added and property taxes as well as import duties.
Regional Map with Armenia courtesy of Wiki Commons
Putin ordered the launch of the “Double Eagle project” because the US blocked a payment from the Russian embassy in Astana, Kazakhstan in March 2014.
The payment was directed to SOGAZ Insurance Group through SWIFT.
This made Putin furious and he initiated the Double Eagle Project, an international money transferring system named after the Russian Double Eagle gold coin.
Moscow by night courtesy of Wikipedia
SWIFT (Society for Worldwide Interbank Financial Telecommunication) system is the global banking system’s postal system. SWIFT has more than 10,000 members in more than 200 countries, and handles more than 15 million messages daily.
SWIFT is based in Belgium, and subject to EU law. However, the U.S. government claims legal authority over all SWIFT transactions denominated in U.S dollars, even if those dollars never enter a U.S. bank account.
So when European banks used SWIFT to facilitate dollar dominated transactions between Iran and third parties, the U.S. fined those banks billions of dollars for violating U.S. sanctions, even though no money passed through the United States.
Russia launch competing money transfer system
When the United Kingdom, called for Russian banks to be ejected from SWIFT during the height of the Ukraine crisis, the Russian bear was alerted.
Late 2014, Russia announced that they will launch an alternative to SWIFT by May 2015. The new international money transfering system would nominate transactions in roubles, with conversion to and from U.S. dollars at either end.
The liberation of fiat money movements.
A Russian international money transfer system would be an alternative global economic and financial system beyond U.S. rules and Western sanctions.
Russia has joined the New Development Bank, an alternative to the International Monetary Fund and the World Bank. The participating countries, Russia, South Africa, China, India and Brazil, comprise more than 3 billion people, 41.4% of the world’s population, and account for more than 25% of global GDP.
China Merchants Bank now issues the world’s #2 credit card.
Russia and China have both built up their gold reserves.
A new trans-Atlantic cable to allow independent worldwide communications is under development.
Importers, exporters, and investors who are citizens of the EU and US are also likely to make use of the Double Eagle system , instead of SWIFT, when it suits them.
This is a private group. To request membership go to the group here, click Join and your request will be reviewed by the group manager.
The purpose of Tax & Money Havens Linkedin group is to function like alumni forum for the following areas,
- Offshore companies, offshore bank accounts, offshore jurisdictions. foundations and trusts.
– Compare jurisdictions world wide on taxes, bank secrecy, corporate entities, capital protection, storage of bullion, second passport, etc.
Marsascala, Malta picture above courtesy Best of European Union, is a town located at the Marsascala Bay on the southeastern part of the island of Malta.
– Advice that guide you to through turbulent times. Pros and cons of the most interesting offshore locations. Overlooked places and how to use them in an intelligent way, and more.
The Baltic nation plan to build itself as an e-nation, effectively allowing anyone to become a digital citizen and living his digital life within its networks.
The country aims to have 5,000 e-residents by 2020. Additional lure is the possibility to get 0% corporate income tax in the European Union. Estonia does not have the reputation of a tax haven which gives companies an additional reason to move businesses to Estonia, an added value is the fact that Estonia is not only a EU and Euro zone member, but also one of the Baltic countries. So you have both legal security and political support of Baltic countries.
Estonia will issue identity cards allowing access to its digital services to people residing outside the Baltic nation as it seeks to boost foreign investment. Lawmakers in the capital Tallinn voted unanimously with no abstentions to let foreigners seek e-residence status to be able to set up a company in Estonia or sign legal documents from anywhere in the world, according to a live broadcast. The law goes into effect on Dec. 1.
Estonia emerge as a global digital leader.
Tallin, Estonia old and new. Picture courtesy of Wiki Commons.
Corporate Income tax
Estonia applies a unique and favorable approach on taxation of corporate profits. Resident companies and permanent establishments of the foreign entities (including branches) are subject to 21% income tax only in respect of all distributions (both actual and deemed), including:
- dividends and other profit distributions;
- fringe benefits;
- gifts, donations and representation expenses;
- and expenses and payments not related to business.
Profit retained in the company is taxed at 0%.
As of January 1, 2009 dividends paid to non-residents are no longer subject to withholding tax at the general rate of 21%, irrespective of participation in the share capital of the distributing Estonian company.
Estonia does not impose any estate taxes. Local governments have the authority to impose local taxes, but effectively only few municipalities have introduced these.
Estonia has effective tax treaties with 51 countries. Under the double tax treaties a significant reduction of withholding taxes on various payments to non-residents is available.
Considerations for the investor
- Main principles of Estonian tax policy: simple tax system, broad tax base and low rates.
- The aim of the current Estonian tax policy is to shift the tax burden from labour to consumption.
- Flat income tax rate since 1994 (flat income tax rate at 21% applies to both individuals and companies).
- Unique corporate tax system since 2000: all undistributed corporate profits are tax-exempt. (0%)
- Individuals can have investment account to benefit from 0% corporate income tax.
- Local taxes play an insignificant role in the Estonian tax system.
- Electronic tax administration is well established. Business taxpayers can file, view and correct their tax returns online using the eTaxBoard (eMaksuamet). They can also use it to view their tax account balances and VAT returns, and submit VAT refund applications.
- Vast majority (92% – 2010) of yearly personal income tax declarations are submitted electronically.
- The standard VAT rate is 20% from 1 July 2009 and the reduced rate is 9%.
The Liberian foundation, modeled on the 1993 modern Austrian law of foundations (Stiftung), is a useful and flexible vehicle, used for various purposes, including charitable, public and personal.
Liberia have since WWII been one of the worlds largest and most well reputed international shipping bases. Many of the worlds leading cruise operators, tanker owners etc. are formally based in Liberia. Legal entities like a foundation is an expansion of the types of legal vehicles available from this jurisdiction.
Similar to all foundations, the Liberian private foundation is a separate legal entity and all assets transferred to it, usually in the form of a gift by a donor, are irrevocable and the sole property of the foundation. The private foundation is established through the memorandum of endowment, and an initial endowment (Donation/Gift). The donor(s) cannot withdraw the assets once they are donated or endowed to the foundation. The assets are placed at the disposal of the foundation.
Treasure Chest, Courtesy of Wiki Commons
As with the donor, there are no statutory restrictions on the residency or nationality of the officers or secretary. Moreover, there are no requirements for assets to be located in Liberia.
There are minimal filing requirements with Liberia, thus protecting the privacy of the beneficiaries and the donor. Once formed, there is a mandatory annual return for the privatefoundation, which must be signed by the Secretary and submitted to Liberia. The annual return confirms that the information filed in the extract is correct and that proper accounts are maintained. Liberia does not require submissions of financial accounts, nor are they required to publically file such information. Any changes or amendments to the extract must be filed with Liberia.
A foundation domiciled outside Liberia may, if permitted to do so by its constitution, apply to migrate its domicile to Liberia. In the same way, Liberian law allows for conversion of any recognised entity to a private foundation, provided its own constitution allows for this.
Liberia imposes no gift tax on the donated assets at the time the private foundation is established. Moreover, any income generated by the assets of the private foundation is exempt from tax in Liberia. However, there may be tax implications for the beneficiaries in their respective places of domicile for any income they receive.
In conclusion, a foundation is useful for preserving wealth and for asset protection, and allows for flexibility in international tax planning. The above gives a brief overview of how a Liberia foundations.