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Barbados to tap Latin American trade opportunites

Caribbean Tax & Money Havens, , , ,

Barbados Minister of Tourism, Richard Sealy has welcomed the ‘highly productive’ meetings held with officials and business leaders in Panama aimed at enhancing bilateral trade and boosting tourism receipts for both countries.

Both countries committed during the five-day trip to enhance bilateral trade and look at opportunities for exporters in Barbados to tap the Latin American market using existing infrastructure and trade arrangements, including through Panama’s Colon Free Trade Zone.

The Colón Free Trade Zone is situated at the Atlantic gateway to the Panama Canal and acts as a tax-free re-export hub. More than 2,500 companies are established there, shipping more than USD 16bn of goods annually.

Representatives of the Chambers of Commerce from the Organisation of Eastern Caribbean States have praised the initiative, stating that the Caribbean needs “to work together to realise tangible trade benefits and the mission was a good start”. They urged Caribbean territories to work together on international trade issues rather than competing with one another.

Talks were also held for the first time with Copa Airlines on establishing air links between Barbados and Panama.

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Investors look to offshore havens to beat austerity measures

Other Tax & Money Havens,

To protect pensions and legacies savers move to foreign bonds. Wealthier British investors are piling money into offshore bonds, in a bid to escape punitive new taxes on pensions, and to help with inheritance tax planning according to Emma Simon, The Telegraph.

According to L&G – one of the largest insurers in the UK – its offshore bond business grew by almost 50 per cent in the past three months. This is on top of record sales in 2010, which saw sales rise almost five times on the previous year. While Standard Life in an annual results said it had seen sales soar by a third this year.

One reason for these rises has been the recent change which has limited how much people can save into a pension each year.

But a rise in Capital Gains Tax (CGT), and a freezing of the Inheritance Tax (IHT) allowance has meant more investors are looking at ways to minimise tax charges on their investments.

People are now only able to save £50,000 a year into a pension. Danny Cox, of Hargreaves Lansdown said: “This limit is still clearly more than most people can afford to save each year. But it does mean that once high earners have maximised their pension and Isa contributions, then offshore investment bonds become an option.”So what are the advantage of going offshore? Do they allow richer investors to effectively sidestep tax?

The answer is no. Offshore bonds don’t allow you to avoid tax completely, but they can be a good way of deferring it. This can be particularly beneficial to those who are higher-rate taxpayers today, but expect to be basic-rate taxpayers when the investment is cashed in.

As well as allowing investors to choose when they pay tax, some of these bonds will also allow investors to choose whether returns are taxed as income, or capital gains. With careful tax-planning this can help them minimise overall tax bills.

In many ways offshore bonds are similar to onshore bonds. Both are basically wrappers, sold by insurers, through which consumers can invest in a range of investment funds.

They offer a wide range of externally managed investment funds – typically the same choice as people would get when investing in an Isa or unit trust. On offshore bonds there can be an even wider spread of investments, including many not widely available to UK investors.

One of the main advantages is that both offshore and onshore bonds allow customers to withdraw 5 per cent of their investment each year tax-free (although strictly speaking the tax is deferred until the bond is cashed). For retired investors and those looking to produce an income from their investment this can be an extremely attractive option.

The main difference between onshore and offshore bonds, is that with offshore, gains can roll-up tax-free – which should mean higher returns. The downside is that charges may be higher (though the charges on both on and offshore bonds are broadly similar) and that investors may not have the same protection under the Financial Services Compensation Scheme.

See more in the Telegraph here.

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Uruguay – Offshore Corporate Vehicle

Central and South American Tax & Money Havens, , , ,

The main feature of an Uruguay Offshore Corporate Vehicle:

Reputable jurisdiction

Foreign income and assets of Uruguayan corporate vehicles are not taxed. Dividends are not taxed

Flexibility

– Shares may be bearer type (anonymity)

– Bearer shares may be transferred by simple delivery

– Company only requires one director and one shareholder

– Directors and shareholders may be non Uruguayan

– Presence of directors and shareholders is not required in Uruguay

– Purpose may be all-encompassing all types of business activity

– No minimum capital required – no maximum capital limit

– Shareholder’s liability is limited to the paid in capital

– Any person or company may incorporate or acquire an Uruguayan Offshore Corporate Vehicle

Solid banking system with secrecy laws

Free inflow and outflow of capital in any currency.

Few obligations:

Prepare financials statements once a year

Hold a shareholder meeting once a year. However, it may do so by proxies.

File tax forms once a year and pay the annual tax of USD 400

The physical presence in Uruguay of any of the corporations shareholders are not necessary.

Please contact us if you want to establish a trust and or corporate structure in Uruguay.

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Hong Kong Tops Economic Freedom Index

European Tax & Money Havens, Far East Tax & Money Havens, Indian and Pacific Ocean Tax & Money Havens, , , , , , ,

Hong Kong has once again topped the Fraser Institute’s Economic Freedom Index, which measures the degree to which the policies and institutions of countries are supportive of economic freedom.

According to the report, Hong Kong scored highly across all of the five categories which are used to calculate index scores, including size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally, and regulation of credit, labor, and business.

Hong Kong has topped the Fraser Institute’s 141-country ranking every year for the past three decades. This year, Singapore, New Zealand, Switzerland, and Australia were placed after Hong Kong in the top five.

The United States experienced one of the largest drops in economic freedom, according to the report, falling to 10th place overall from sixth in 2010. Much of this decline is attributed to higher spending and borrowing on the part of the US government, and lower scores for legal structure and property rights.

“The link between economic freedom and prosperity is undeniable: the countries that score highly in terms of economic freedom also offer their people the best quality of life,” said Fred McMahon, vice-president of international policy research at the Fraser Institute, a Canadian public policy think tank.

Commenting on this year’s index results, Hong Kong Chief Executive Donald Tsang remarked that economic freedom was “part of Hong Kong’s DNA”.

“In such testing times, it is important for an externally oriented economy such as Hong Kong to remain true to our philosophy. That means strong fiscal discipline, low taxes, open markets, free flow of information, goods and capital, clean government and a level playing field for business,” Tsang said in a speech September 20.

“The fact that we have held true to these beliefs for decades is no doubt one reason why Hong Kong has consistently ranked so highly in the league tables of economic freedom. As the old saying goes: ‘If it ain’t broke, don’t fix it.'”

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Indonesia to attract investors with tax benefits

Indian and Pacific Ocean Tax & Money Havens, ,

Indonesia’s Minister of Finance, Agus Martowardojo, has announced that long-awaited regulations will be issued to introduce tax holidays, as well as revise the country’s tax allowances, for new direct investments in selected industries.

The introduction of a tax holiday is being looked at as providing support for the large-scale manufacturing and infrastructure projects contained within the government’s Masterplan for the Acceleration and Expansion of Economic Development of Indonesia, recently launched by President Susilo Bambang Yudhoyono.

Tax holidays will therefore be available, the Finance Minister pointed out, to substantial investments of at least IDR1 trillion (USD116.6m) in the base metal, petroleum and refining (or basic chemicals derived from petroleum and natural gas), industrial machinery, renewable resources and telecommunications equipment industries.

The tax holiday would remain for at least the first five years of a project’s commercial operations. It was reported that retroactive tax holidays would also be available for projects established up to a year before the announcement, provided that they are not yet profitable.

To obtain a tax holiday, the Coordinating Minister for Economic Affairs, Hatta Rajasa, disclosed that the investor should make a proposal to the Investment Coordinating Board (BKPM) and/or the Ministry of Industry, which will review its suitability under the established criteria.

The BKPM’s Head, Gita Wirjawan, said that there are already five companies that are waiting for tax holidays to be available before investing substantial funds in Indonesia – namely, the South Korean companies, Posco steel (an investment of some IDR60 trillion) and Hankook tyres (IDR5 trillion); Kuwait Petroleum Corporation (up to IDR70 trillion); and Caterpillar (IDR5 trillion), while the domestic textile company, Indorama, is also considered likely to begin a project of up to IDR5 trillion, and look for a tax holiday.

The government has also, Rajasa explained, increased to 128 the sectors eligible for tax allowances. However, he confirmed that, to obtain a tax allowance, a company must operate in a high priority industry on a national scale; and have a minimum investment value of IDR50bn with a workforce of at least 300 people, or a minimum investment of IDR100bn with a workforce of at least 100 people.

In addition, the industrial sector must meet one of the ten criteria already existing in the current tax allowance regulations, which, among other stipulations, require that: the investment is in a specified high priority industry; the project is located in a remote area; research, development and innovation is conducted; a partnership with micro businesses or small and medium-sized enterprises is set up; and a substantial number of jobs are provided for.

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