For many companies, their greatest asset is their good name or reputation. The main benefits of a good corporate reputation are:
- The customer’s preference in doing business with you (when competitors can provide similar goods and services at a similar cost and quality).
- The ability to charge a premium for products and services.
- Stakeholder support for your company in times of controversy.
- Higher market valuation of the company.
Doing business through a tax haven has the potential to enhance or damage a company’s corporate reputation. It will all depend on the reputation of the specific tax haven and the reasons why the corporation is using it. For example, domiciling your start-up hedge fund in the Cayman Islands will enhance your corporate reputation (as this is the world’s premier hedge fund domicile holding 80% of the world’s hedge fund assets).
Conversely, doing business from the tax haven of Belize will not improve your corporate reputation. Belize is known in the global arena for attracting drug traffickers and money launderers.