Tag Archives: Offshore Investments

Cayman Islands to name previously hidden companies

Caribbean Tax & Money Havens, ,

Cayman Islands, picture courtesy Burtonpe.

The Cayman Islands will open the thousands of companies and hedge funds domiciled on the offshore Caribbean territory to greater scrutiny, in a break from decades of secrecy.

CIMA, the three-islands’ monetary authority, sent proposals, seen by the FT, to Cayman-based hedge funds and outlined plans to create a public database of funds domiciled on the island for the first time and will also list the funds’ directors, pending an ongoing consultation process due to close in mid-March.

The British overseas territory, which has been criticised as being one of the most secretive finance jurisdictions in the world, is introducing reforms that will make public the names of thousands of previously hidden companies and their directors, reports the Financial Times,

CIMA, the islands’ monetary authority, sent proposals, seen by the FT, to Cayman-based hedge funds and outlined plans to create a public database of funds domiciled on the island for the first time and will also list the funds’ directors, pending an ongoing consultation process due to close in mid-March.

“In the 24 months subsequent to the onset of the financial crisis, the BVI Financial Services Commission, the Central Bank of Ireland, the Jersey Financial Services Commission, the Bahamas Financial Services Board and the Isle of Man Supervision Commission all updated their corporate governance codes, laws and/or regulations,” the FT reports CIMA said in one document.

CIMA did not respond to the FT’s request for a comment.

The Cayman Islands are seen as a tax-haven by many companies to avoid payer higher rates of tax in other countries.

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Panama – City of Knowledge offers no taxes for research and high tech corporations

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

Panama has established City of Knowledge in order to attract research and high tech corporations. This includes internet commerce, bio and nano tech corporations. Only 15 minutes drive from down town Panama City it also offer great life style possibilities.

 

Panama City, Republic of Panama     Picture courtesy of Photoatlas

City of Knowledge

Being part of the City of Knowledge implies a commitment to innovation and sustainable development, but it also involves a broad range of benefits designed to make your operations more effective.

Here are some of the direct benefits for affiliates and users recognized by the City of Knowledge:

  1. Tax and immigration benefits through affiliation to the City of Knowledge Foundation project.
  2. Telecommunications, IT and educational technology services, including an intelligent high-tech center with the required capacity for teleconferences, distance learning, fast internet connections, and other services.
  1. A Point of Presence -POP- with direct access to the land portion of 5 International Fiber Optic cables that go across Panama (PAC, SAC, ARCOS, Pan-American and MAYA).
  2. Infrastructure and buildings in good maintenance condition, easily adaptable to various uses.
  3. Technical, administrative and consulting services. Constant electricity flow (99.9%) with redundant power supply from the Panama Canal thermal plant located 300 m (328 yards) away in the Miraflores locks.
  4. Complementary accommodation and catering service.
  5. Sports and recreation facilities.
  6. Access to the major higher learning and scientific research centers in the country.
  7. Access to the Panama Canal Basin, a living laboratory for scientific research and technological innovation on advanced tropical ecosystem management.
  8. Central location: next to the Panama Canal, 15 minutes from downtown Panama City, 5 minutes from Amador resort and 45 minutes from Colón city, located on the Atlantic entrance to the Panama Canal.

Here are the incentives for those participating in the project under Executive Order # 6 of February 10, 1998, which states the basis for the Panamanian State’s support to the City of Knowledge Foundation.

Tax Benefits

  1. Exemption from all taxes, levies, fees or import duties on machines, equipment, furniture, vehicles, appliances or materials necessary for the operation of companies accepted into the City of Knowledge Technopark.
  2. Exemption from Service and Personal Tangible Asset Transfer Tax (ITBMS) on machinery, equipment, vehicles, appliances and materials purchased or necessary for the operation of companies accepted into the City of Knowledge Technopark.
  3. Exemption from any taxes, fees, duties or levies on overseas money remittance when such money remittance or transfer is done for the purposes of companies accepted into the City of Knowledge Technopark.
  4. Innovating companies producing, assembling or processing high-tech goods or rendering similar services for sale in the local or international market at the International Technopark of Panama (ITP) will have the following benefits:
    1. Their activities, operations, transactions, procedures and transfers of personal and real property, purchase and import of equipment and construction material, raw materials, machinery, tools, accessories and supplies will be a hundred percent free of direct taxes, levies, fees, duties and national taxes. This includes income tax exemption for companies.
    2. Their capital will be free from direct national taxes, including patent or license tax.

Immigration Benefits

The State will grant special visas to foreign staff entering the country to contribute to the development of the City of Knowledge project. For further information, see the Immigration and Naturalization Bureau website.

Labor Benefits

Companies affiliated to the City of Knowledge are authorized to hire any international staff necessary for their operation.

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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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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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