Is Guam a Seductive Tax Haven or an IRS Nightmare?
Capital city: Hagåtña
Currency: United States dollar (USD)
GDP: $4.9 billion
GDP per capita: $30,109
Guam is a United States unincorporated and organised territory situated in Micronesia in the western Pacific Ocean. It is the largest and southernmost of the Mariana Islands and the largest island in Micronesia.
Portuguese explorer Ferdinand Magellan (while in the service of Spain) was the first European to visit the island on March 6, 1521. Although Guam was colonised by Spain in 1668, under the Treaty of Paris, Spain ceded Guam to the United States on December 10, 1898.
Guam is the closest landmass to the Mariana Trench, a deep subduction zone. Challenger Deep, the deepest surveyed point in the Oceans, is southwest of Guam at 10,911 metres deep.
In the 1990s Guam enacted a package of financial services development legislation to become a financial tax haven. The Guam resident trust shelter was very popular. It involves a tax rebate from a Guam resident trust, provided half of the rebated taxes are kept on deposit in Guam for five years. To access this concession trusts had to apply to the Guam Economic Development Authority for the certificate (which is good for 20 years). Unfortunately, the IRS has now issued a notice that challenges the use of Guam trusts to shelter income from U.S. taxes.
"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"
- Bono: U2