Which Countries Are Considered The Top Corporate Tax Havens?

When multinational companies look to open up a new subsidiary or a regional headquarters, they tend to prefer certain countries due to their favorable tax policies. Here's a look at which countries are tax havens, and why international corporations and foreign investors are attracted to these places.

Europe

The Netherlands is often seen as a top tax haven in Europe. If a multinational company moves to the country, they may be able to negotiate a specialized tax regime with the Dutch authorities. Multinational companies often set up a shell company in the Netherlands, with corporations moving their profits through shell companies to a part of the world where they pay little to no tax.

Ireland has also been labeled a tax haven, with the taxation rate before deductions for companies as low as 12.5%. Revenue tied to a company's patent or intellectual property is only taxed 6.25%. Companies can also set up special-purpose vehicles to reduce taxes. Ireland also has little financial transparency for transnational corporations.

Switzerland is a notorious tax haven, due to low taxation of foreign companies, but the country is no longer as secret as it used to be for foreign investors.

The tiny country of Luxembourg, nestled between Belgium, France and Germany, is also considered a tax haven. Multinational companies in the country include Amazon and PriceWaterhouseCoopers

Asia

Hong Kong does not charge taxes on capital gains, interest and dividends. Hong Kong is also heavily committed to keeping the identities private of those who park their money there and companies are not obligated to prepare financial statements with authorities in the special autonomous region.

Companies in Singapore pay 17% in taxes on income over $2.7 million and the country does not levy taxes on capital gains. The small nation also offers tax breaks for foreign banks and offshore trading companies.

Other noteworthy nations

Bermuda has no corporate income tax and is not involved in any double tax agreements. The EU removed the British overseas territory from its tax haven blacklist in May as it is addressing EU tax evasion concerns.

The African island country of Mauritius has signed dozens of double tax avoidance agreements with other countries, which allows investors to avoid having their income taxed twice. The country also grants investors and companies a high level of financial secrecy.

The Cayman Islands, a British territory, is arguably most famous for its tax laws, as there are no taxes on corporate profits, capital gains or personal income in the Caribbean nation.