Despite the Internal Revenue Service and Homeland Security’s efforts, the wealthy can still jump on their private jet or sit down at their computer to escape taxes in the new economy, moving large chunks of money into new U.S. tax havens out of the governments reach.
Even though the location of the tax havens has changed, the practice remains the same. U.S. efforts to shut down foreign tax havens seem to have failed miserably. Switzerland banks are still open to wealthy Americans. The Swiss government recently signed an agreement with the U.S. to share banking information on U.S. citizens or residents with the IRS. All an American has to do to get around this is to renounce their citizenship and stay out of the country to avoid taxes.
If the American becomes a citizen of another country, they may still travel back to the U.S.A. A person that does this can also take advantage of other tax havens like the Bahamas, Cayman Islands, and the Channel Islands. U.S. citizens have to pay a 15% exit tax for this right.
New Tax Havens
The rich have no reason to despair because they still have plenty of places to hide money from the taxman in foreign banks. Tax havens are going to be with us for a long time to come, no matter what politicians promise. The good news for wealthy globetrotters is that there are plenty of new tax havens offering banks as an out-post to hide money. Every time an old tax haven shuts down, two new ones open up to serve the jet set.
New tax havens include:
1- Nairobi, Kenya. The British Empire is alive and well in this African outpost. Nairobi is negotiating a deal with the City of London to become an “independent financial center.” That means you can move your money there through London to escape taxes. Some British banks might use Nairobi as a means of avoiding higher taxes back home.
2- Latvia. The former Soviet Republic on the Baltic is hoping to become a new Switzerland or Cyprus by passing new laws to encourage investment. Critics say the new laws will make it easy to hide money in the nation’s banks.
3- Australia’s Northern Territory. To encourage development in the remote region, Australia’s government wants to cut taxes there.
4- Shannan Prefecture, Tibet. The Chinese government is trying to create a new Switzerland in the Himalayas by lowering taxes in the remote region. Wealthy Chinese might move their money there to avoid China’s version of soak the rich.
5- Gambia. The African nation has created an online registration so you can register your corporation there and start banking in just 30 seconds. The nation’s new website lets you create a wide range of corporate structures in a few minutes through its iCommerce Registry. All of these corporate structures are designed to hide money. Rich people don’t even have to go to Gambia or know where it is to hide money there. Gambia has agents in the City of London who expedite the movement of money from the UK.
6- The Caribbean. Despite the promises of American and British politicians, all of the region’s tax havens are open for business and thriving. The biggest include Netherlands Antilles through which companies like Apple, Google, and Facebook move money to escape taxes.
7- Central America. Belize, Nicaragua, and Costa Rica are working hard to attract the wealthy and upper middle class of the United States and their money with lower taxes. Nicaragua and Costa Rica even let expatriates participate in their national health care plans.
8- Singapore. The island city has become the new Switzerland and a destination of choice for tax avoiders. The island is popular because of its stability and world class shopping.
9- Nauru. This remote and tiny Pacific island has the strictest banking secrecy laws in the world. So there are numbered bank accounts even if they are harder to find.
10- Samoa. In this island nation, it is illegal to access banking information except for investigations of terrorism, money laundering, drug trafficking, and some other crimes.