1, political and social stability, attracting multinational companies to invest.
At present, some famous tax havens in the world are mostly small countries or semi-autonomous regions, and the political situation is relatively stable. Many of these countries and regions do not have armies. It is generally believed that the political stability of these countries and regions has laid a foundation (coup and civil war are extremely unlikely). On the contrary, Lebanon, a famous tax haven in Asia in the past, has a single geographical jurisdiction and is tax-free for holding companies and offshore companies; Beirut used to be the banking and financial center of multinational companies operating in the Middle East. Later, due to the constant war, many multinational companies withdrew from Lebanon, thus losing their status as tax havens.
Convenient transportation and communication is one of the "hardware" that tax havens should have.
At present, most countries and regions that have successfully implemented the tax haven policy attach importance to this condition. From the global distribution of tax havens, it is not difficult to see that some important or famous tax havens are geographically close to major capital exporting countries, which creates convenient conditions for tax havens to attract multinational companies to invest. In addition, traffic between tax havens and major investment countries is generally developed. For example, Bermuda is only1.247km away from new york, USA, and there is a flight from Bermuda to new york every two hours, and the flight time is less than two hours. The flight time from Cayman Islands to Miami is only 1 hour, and there are several flights every day. The flight time from Jersey and Guernsey to London is only 1 hour. In addition, the communication of tax havens is also very developed, and all localities can basically make international direct dial calls. There are countless examples of inconvenient transportation preventing a country from becoming a tax haven.
The bank secrecy system is very strict.
Multinational companies use tax havens to avoid taxes, mainly by artificially transferring the profits of enterprise groups from affiliated companies in high-tax countries to basecompany in tax havens, which will undoubtedly harm the tax interests of high-tax countries, so high-tax countries will be very concerned about the transfer of profits by their own companies abroad. In this case, if there is no law or system to keep customers' bank deposits in tax havens strictly confidential, multinational companies' transfer of funds to tax havens will be exposed in broad daylight, and anti-tax avoidance measures in high-tax countries will be more effective. In order to attract tax avoidance companies, countries or regions in tax havens generally attach great importance to bank secrecy. Some countries have enacted bank secrecy laws to severely punish bank employees for revealing secrets. Some tax havens (such as Netherlands Antilles, Bermuda, China and Hongkong) have not enacted bank secrecy laws, but according to other local laws, the banking industry cannot disclose customer information to others unless there is a court order. Because some pure tax havens with no tax or low tax generally have no international tax agreements, the tax authorities in developed countries cannot obtain relevant information about tax havens through the channel of tax information exchange. However, under the great pressure of developed countries, some tax havens have begun to sign tax information exchange agreements with developed countries. For example, on 27 October 20001,1654381,the Cayman Islands and the United States should have signed a tax information exchange agreement, which came into effect on 27 June 2004.
There are no restrictions on remittance.
Multinational companies often need to transfer funds between tax havens and their base companies for international tax avoidance, which requires the government of tax havens not to restrict the transfer of funds by multinational companies. At present, the main tax havens in the world basically belong to this situation. For example, Cayman Islands, Turks and Caicos Islands, British Virgin Islands, Panama, Switzerland, Luxembourg, Channel Islands, Isle of Man, Liechtenstein, China, Hong Kong, Nauru and Vanuatu. Some of these tax havens have no local currency, while others use the currencies of developed countries as their national currencies. For example, the Turks and Caicos Islands and the British Virgin Islands all use US dollars as their currencies. Liechtenstein uses the Swiss franc as its currency; Nauru uses the Australian dollar as its currency. Second, although foreign exchange control is implemented, it does not apply to companies established by non-residents. Bermuda, Netherlands Antilles and Bahamas are such tax havens.