Category Archives: Indian and Pacific Ocean Tax & Money Havens

Countries With Capital Controls

We have compiled a list of countries that currently have capital controls. However, notice that Belize have a two system economy. The local banks and the local economy with capital

Great Blue Hole Belize

controls,and the international banks with their international clients with no capital controls.

To some extent this is “more or less” the case with some other countries as well, like for example Cuba and Malaysia.

 

Great Blue Hole in Belize, a paradise for foreingers. Phone courtesy of Wiki Commons

 

 

Here are the countries with capital controls in alphabetic order:

Argentina
Brazil
Belize
China
Colombia
Cyprus
Cuba
Ecuador (1
Egypt
Iceland
India
Indonesia
Iran
Malaysia
Mexico (2
Russia
South Africa
South Korea
Taiwan
Ukraine
Venezuela

 

Description:

1.) Ecuador taxes you 5% on every wire, check, ATM or visa/master card transaction you make outside of Ecuador.

2.) Mexico have a limit on cash US Dollar transactions. However, Mexico is mainly a cash society.

 

Let us know if you are aware of updates to the countries mentioned above or other countries that should be added to the list.

 taxmoneyhavens.com

 

Palau Launches International Shipping Registry

The Palau International Shipping Registry has officially opened its doors following a launch ceremony which saw the registration of its first two vessels, the cruise ships Amusement World (12,764 Gross Registered Tonnage (GRT)) and Leisure World (15,653 GRT) operated by Universal Ship Management.

CruiseVesselLeisureWorld

Picture of Leisure World by Ivan Meshkov

Despite the territory’s diminutive size, with a population of just 22,000, the Registry has already signed up to the most significant major shipping conventions, including: the International Convention for Safety of Life at Sea; the International Convention for the Prevention of Pollution from Ships; the Safety of Training, Certification and Watchkeeping; the Bunker Convention; the Civil Liability Convention; and the Maritime Labour Convention 2006, among others.

The Republic of Palau consists of eight principal islands and more than 250 smaller ones lying in the western Pacific, with maritime boundaries with Indonesia, Philippines and the Federate State of Micronesia. The Registry is headquartered and administered in Houston, USA.

The Registry is committed to the highest international standards. The President of Palau, Johnson Toribiong said at the launch: “In announcing the opening of the Palau International Ship Registry for business, we are committed to ensuring the safety of our fleet personnel and passengers, ensuring protection of environment by which our fleet traverse, and ensuring peaceful voyages of our fleet, reflective of the Republic of Palau and her flag. We are proud to say that the Palau International Ship Registry is not just another ship registry, but, a ship registry of the highest standard.”

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Labuan continues to grow as offshore financial center

The Labuan Financial Services Authority (FSA) has released its 2011 Annual Report which shows continued growth in the key business sectors of the Labuan International Business and Financial Centre (IBFC).

In that Annual Report, it was noted that, supported by its strategic location and financial infrastructure, the business activity and financial service sectors in the Labuan IBFC continued to record positive growth, with strong growth seen in the banking, insurance and reinsurance, captives and leasing sectors.

At the same time, it was pointed out that the regulatory and supervisory framework has been continuously strengthened by the FSA so as to promote the integrity and resilience of the Labuan financial sector.

A total of 651 new companies were incorporated in Labuan in 2011, representing an increase of 8.1% over 2010. By the end of the year, out of the total of 8,655 Labuan companies, 72% were from the Asia-Pacific and Far East region, followed by 13% from Europe and the 10% from the Americas.

The leasing sector was one of the most vibrant sectors in Labuan during the year, with a strong increase in the number of leasing companies to 227 and accumulated assets leased of USD 27.6 bn. The focus of the leasing companies in the highly specialized areas of aviation and oil and gas provided strong support for the growth and development of the oil and gas sector in Labuan.

The Labuan banking sector also reported a steady rise in total assets by 13% to USD38.3bn as at end-2011. Two new banks from Australia and Ghana obtained licences to operate, bringing the total number of Labuan banks to 57.

The insurance sector in the IBFC remained resilient despite various episodes of natural disasters within the region during the year. Total insurance assets increased by 16.1% to USD3.6bn and total earned premium income for the sector also grew by 45.1%.

In addition, total Islamic assets registered a growth rate of 15.4% to USD1.5bn, reflecting the strong interest in Islamic finance. Total Islamic bank financing increased significantly to USD294.6m as at end-2011, with strong demand from non-residents.

Since the introduction of the Labuan Global Incentives for Trading (GIFT) programme in September 2011, five trading licences had been issued, enabling Labuan International Trading Commodity (LICT) companies to benefit from incentives under the programme.

The key incentives offered through the LICT under the GIFT programme include a flat corporate tax rate of 3% of chargeable income, a 100% exemption on directors fees paid to non-Malaysian directors, and a 50% exemption on gross employment income for non-Malaysian professional traders and managers of LITC companies. There is also an exemption of stamp duties on documentation for such business activities, a tax exemption on dividends received by or paid from LITC companies, and all of the other fiscal incentives that are attached to operating a Labuan entity.

As part of its internal organizational programme, the FSA continued to enhance its capacity and capability to regulate and supervise the IBFC, particularly in ensuring that key risk areas are addressed promptly. Moving forward, the FSA confirmed that it will implement plans to realize the strategic potential of the IBFC to serve the needs of domestic and regional businesses, complemented by a continuous strengthening of its regulatory and supervisory framework to meet international standards and best practices.

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Hong Kong Tops Economic Freedom Index

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

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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