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Why’s Puerto Rico’s Attractive as a Tax Haven

Caribbean Tax & Money Havens, , , , , ,

Puerto Rico (Spanish for “rich port”) is turning into the next Singapore. Wealthy Americans have already taken advantage of the year-old Puerto Rican law that lets new residents pay no local or US federal taxes on capital gains.”

Why you should move your US business to Puerto Rico. See the video interview with Barry Breeman on Bloomberg:

[youtube https://www.youtube.com/watch?v=92B8713i_YY]

Source: Bloomberg

The Commonwealth of Puerto Rico is an unincorporated territory of the United States, located in the northeastern Caribbean, east of the Dominican Republic and west of both the United States Virgin Islands and the British Virgin islands.

Due to the 1952 Commenwealth of Perto Rico creation by the US congress, Puerto Rican’s residents do not pay US federal income taxes. US Citizens who moves to Perto Rico pay 4% tax on earned income, no taxes on distribution and dividends, but only on Perto Rico source based income.

Citizens of Puerto Rico are bilingual and speak both English and Spanish fluently. Official languages of the island are Spanish and English, with Spanish being the primary language.

4 millions US citizens lives in Puerto Rico. Many US hedge funds and US private equity funds have already relocated. The islands also offers well educated work force, easy communication to New York and Miami, pleasant weather as well as great cafes and restaurants.

See the video above to learn more.

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Hong Kong Again Ranked As World’s Freest Economy

Far East Tax & Money Havens, , , , ,

The World’s Freest Economy. Picture of Hong Kong by Jakub Halun

For the 19th consecutive year, Hong Kong maintained its position as the world’s freest economy, according to the 2013 Index of Economic Freedom, published annually by The Heritage Foundation.

Launched in 1995, the Index evaluates countries over 10 economic freedom factors – from property rights to entrepreneurship – grouped into four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets. Based on its aggregate score, each of the 177 ranked countries was classified either as: “free” (i.e. combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).

The top four in the index were unchanged. Hong Kong scored 89.3 on the 1-100 scale, which, although 0.6% lower than last year, still topped the 88 of Singapore, which, although 0.5% higher than 2012, ranked second, as it has for all 19 years. Australia and New Zealand ranked third and fourth, at 82.6 and 81.4 respectively, enabling the Asia-Pacific region to account for the four highest-ranked countries.

Switzerland took fifth place in the ranking (and continued to be the only “free” economy in the European region), with Canada finishing sixth, despite slipping a half point, and Chile seventh, moving more than half a point toward greater economic freedom. Mauritius, the only sub-Saharan country to rank among the top 10, was eighth with an overall score of 76.9. Denmark finished ninth, just ahead of the United States, which remains in tenth.

The US, with an economic freedom score of 76, lost ground again in the 2013 Index. Its score was 0.3 points lower than last year, with declines in monetary freedom, business freedom, labor freedom and fiscal freedom.

The world average score of 59.6 was only one-tenth of a point above the 2012 average. Since reaching a global peak in 2008, the Foundation noted that economic freedom has continued to stagnate. The overall trend for last year, however, was positive: Among the 177 countries ranked in the 2013 Index, scores improved for 91 countries and declined for 78.

“On the plus side, average government spending scores improved,” it added. “Unfortunately, this was matched by a decline in regulatory efficiency, as a number of countries hiked minimum wages and tightened control of labor markets.”

Hong Kong’s score was lower than 2012 due to increased government spending relative to gross domestic product and an increase in inflation. Among the 10 economic freedom factors assessed, Hong Kong maintained its top position in trade and financial freedom, remained second in investment freedom and property rights, and rose from third to second in business freedom.

Hong Kong’s Acting Financial Secretary Professor KC Chan welcomed Hong Kong’s highest ranking, noting that The Heritage Foundation complimented Hong Kong’s highly competitive regulatory regime “which, coupled with an efficient and transparent legal framework, sustains vibrant engagement in global trade and investment.”

As Hong Kong’s economic interaction with mainland China has got closer, and trade and financial linkages with the Mainland have grown significantly, The Heritage Foundation further complimented Hong Kong for continuing to demonstrate a high degree of economic resilience and remaining one of the world’s most competitive financial and business centers.

Chan confirmed the government is determined to uphold economic freedom in Hong Kong. “The government will continue to provide a business-friendly environment for firms to flourish, while establishing an appropriate regulatory regime to ensure the integrity and smooth functioning of the free market. We also strive to remove impediments to industries tapping into new markets,” he added.

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Islands trade quick citizenship for investment

Caribbean Tax & Money Havens, , ,

According to The Detroit News:  Kingston, Jamaica — Hadi Mezawi has never set foot on the Caribbean island of Dominica, has never seen its rainforests or black-sand beaches. But he’s one of its newest citizens.

Without leaving his home in the United Arab Emirates, the Palestinian man recently received a brand-new Dominican passport after sending a roughly $100,000 contribution to the tropical nation half a world away.

Turmoil in the Middle East and North Africa has led to a surge of interest in programs that let investors buy citizenship or residence in countries around the world in return for a healthy contribution or investment. Most are seeking a second passport for hassle-free travel or a ready escape hatch in case things get worse at home.

Nowhere is it easier or faster than in the minuscule Eastern Caribbean nations of Dominica and St. Kitts & Nevis.

It’s such a booming business that a Dubai-based company is building a 4-square-mile community in St. Kitts where investors can buy property and citizenship at the same time.

In its first phase, some 375 shareholders will get citizenship by investing $400,000 each in the project, which is expected to include a 200-room hotel and a mega-yacht marina. Others will get passports for buying one of 50 condominium units.

“The more they fight over there, the more political problems there are, the more applications we get here,” said Victor Doche, managing director of another company that offers four condominium projects where approved buyers are granted citizenship in St. Kitts, which is less than twice the size of Washington, D.C.

It’s impossible to say how many people have used the cash for citizenship programs. Officials in both countries declined to respond when asked by The Associated Press.

But Bernard Wiltshire, a former Dominica attorney general, said there were already around 3,000 economic citizens when he left government about a decade ago. The country now has roughly 73,000 inhabitants in all.

“Investor visa” or citizenship programs are offered by many nations, including the United States, Canada, Britain and Austria. But the Caribbean countries offer a fast path to citizenship at a very low cost. The process, including background checks, can take as little as 90 days in St. Kitts. And there’s no need to ever live on the islands, or even visit.

A foreigner can qualify for citizenship in St. Kitts with a $250,000 donation to a fund for retired sugar workers or with a minimum real estate investment of $400,000.

The minimum contribution in Dominica is $100,000.

See the full article in The Detroit News.

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The Arctic a New Tax Haven

Other Tax & Money Havens,

Russia has confirmed details of tax breaks lasting from between five and fifteen years for new oil projects in the Arctic shelf from 2016, including an exemption from export duty and from VAT on the purchase of equipment. Offshore projects will also benefit from a 5% “Arctic” mineral extraction tax rate, in comparison to the usual 30% rate.

Russia creates a new Tax Haven in the Arctic. The Arctic consists of the Arctic Ocean and parts of Canada, Russia, Denmark (Greenland), Norway, Sweden, Finland,  Iceland, and the United States (Alaska).

The announcement follows an agreement between Russian ministries over new incentives that had been first suggested in April 2012. At that time, then-President elect Vladimir Putin had promised a “stable and predictable” tax regime that would attract investment worth USD0.5 trillion over the next 30 years.

However, foreign companies looking to invest will have to be minority partners with Gazprom or Rosneft, as due to foreign investment laws licenses are available only to the two state-owned companies. Given the lamentable history of Russian state participation in oil and gas projects, it may be difficult for them to find partners.

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Simplified Tax Regime for Jamaican Registered Yachts

Caribbean Tax & Money Havens, ,

Picture of James Bond beach on Jamaica courtesy of Banjoman1

Jamaica’s Cabinet has approved proposals to introduce an annual fee to replace the multitude of levies in place on Jamaican-registered yachts in a bid to improve the attractiveness of the local registry.

It was on Jamaica that Fleming wrote more than a dozen novels and short stories featuring Agent 007. Of these once best-selling volumes of action pulp, “Dr. No,” “Live and Let Die,” “The Man With the Golden Gun” and the short story “Octopussy” are largely or partly set in Jamaica, and the films based on the first two were also shot there.

The annual fee will replace the existing customs duty, customs user fee, environmental levy, and General Consumption tax charges on flags registered in Jamaica, providing for a simpler, streamlined regime for boat owners. In addition, yachts of less than 25 feet will be exempt from registration and safety inspection fees for the first two years of their registration.

Jamaican information minister, Sandrea Falconer said that the government hoped to “stimulate nautical tourism and yacht registration in Jamaica,” and “enhance the competitiveness of the Jamaican Shipping Registry by encouraging the registration of pleasure craft and facilitating home porting in Jamaica.” She identified that presently around 8% of yachts berthed in Jamaica are locally registered.

The plans include the introduction of a cruising permit fee, under the Shipping Act, to be paid by visiting yachts bearing other territories’ ensigns.

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