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Tax Havens

Paying Higher Interest Rates to Attract Foreign Investment

As developing countries are higher risk than developed countries, they must pay higher rates of interest to attract foreign investment.

Domicile Structured Finance Entities

Structured financial entities are established by financial institutions (banks and companies) to sell their debt securities to investors.

Domicile Captive Insurance Businesses

A captive insurance business is an insurance company that is wholly owned and controlled by the insured.

Domicile Hedge Funds

Eighty percent of the world’s hedge funds worth US$800 billion are domiciled in the Cayman Islands.

Trading with the Tax Haven’s Local Population

Many companies including Telstra have established entities in tax havens as they operate trading businesses in those tax havens servicing the local population. 

Delaware's Flexible Corporate Laws Attract Business

Businesses choose Delaware simply because of their flexible corporate laws, highly respected Court of Chancery, and a business-friendly State Government.

Tax Havens Require Political and Economic Stability to Flourish

Without political and economic stability, no amount of tax inducement can bring in outside investors. The political and economic stability of tax havens like Switzerland are a magnet for huge capital inflows.

Lack of Exchange Controls Offer Investor Confidence

The key reason Hong Kong is among the world’s largest financial centres is that it doesn’t have any currency controls.

Bank Secrecy in Tax Havens

Bank secrecy is a legal requirement in most tax havens and this prohibits banks providing authorities personal and account information about their customers.

Asset Protection

The Cook Islands claims to be the first country to have enacted an explicit asset protection law (in 1989 with its International Trusts Act).

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