Top 5 Tax Haven Countries in the World

Several countries worldwide implement minimum tax levies, better known as tax havens. Countries that implement tax havens generally serve as a refuge for business owners from countries with significantly higher taxes.

A tax haven is a country that offers low taxes or even no taxes to foreign companies or individuals. Similar to the word "haven" itself, a tax haven becomes a "shelter" for taxpayers to avoid tax collection.

According to the Organisation for Economic Co-operation and Development (OECD), the characteristics of a tax haven include, among others, the implementation of low or no tax rates, a lack of information exchange, a lack of transparency in tax collection, and a lack of substantial activity requirements for companies.

Cited from the Tax Justice Network's report titled *Financial Secrecy Index 2020*, here is the ranking of the top five tax havens in the world:

1. Cayman Islands (Index Score: 1,575 Points)

This Caribbean country is one of the world's leading financial centers. There are more than 600 banks in the Cayman Islands originating from 60 countries worldwide. The Cayman Islands also has its own currency called the Cayman dollar (KYD). 1 Cayman dollar is equivalent to 1.20 US dollars.

2. United States (Index Score: 1,487 Points)

According to the Financial Secrecy Index 2020 report, the United States provides various secrecy and tax-free facilities for non-residents at both the Federal and state levels. This secrecy has caused untold losses to ordinary citizens abroad.

3. Switzerland (Index Score: 1,402 Points)

Switzerland is one of the largest financial centers and one of the world's tax havens. Switzerland is willing to exchange information with wealthy countries if required and offers opportunities to avoid tax liabilities for citizens from poor countries.

4. Hong Kong (Index Score: 1,035 Points)

Hong Kong is a tax haven due to various laws protecting the assets of foreign residents and companies. There are no taxes levied on capital gains, interest, or dividends. There are also no net wealth taxes or public benefit taxes.

5. Singapore (Index Score: 1,022 Points)

Singapore is considered a global tax haven because it offers several tax breaks, such as relatively lower corporate and top-bracket personal income tax rates. Singapore also does not levy taxes on capital gains.

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