BAHAMAS
Language -
English
Currency - Bahamian Dollar
Status - Independent Commonwealth State
Population
- 305,655
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
N/A
|
N/A
|
N/A
|
Not
for owner-occupied property up to $250,000, then
from 1-3%, depending on occupation
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
From
2% to 8%
|
Payroll
taxes (employer)
|
N/A
|
National
Insurance and events based taxation
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Home
owners and major international investors
|
Annual
Residence: $1,000, Permanent Residence: $5,000
|
Yes
|
Bahamas
Investment Authority
|
BAHAMAS
From a
banking and investing point of view, the Bahamas are
a well-respected jurisdiction; the banking environment
is stable, the secrecy laws stringent, and the investment
environment sophisticated. Banking secrecy may however
be under threat from new legislation, as a result of
international pressure.
The main
areas of expertise in the islands are:
- Trust
formation and management
- Mutual
fund management
- Banking.
The Bahamas is one of the world's top ten banking
centres, and there are more than 300 banks (representing
over 30 countries). The banking industry is stringently
regulated by the Central Bank of the Bahamas.
Exchange
controls apply only to the Bahamian dollar, and to resident
individuals and companies, and there is no income tax,
capital gains tax, purchase or sales tax, VAT or capital
transfer tax. As a result, length or frequency of residence
in the Bahamas does not affect tax liability. Taxation
consists of social insurance contributions, stamp duty
on property transactions, annual property tax, and some
quite high customs duties.
Although
foreign investment in local real estate or enterprise
is positively encouraged in the Bahamas, obtaining long-term
residence and/or employment on the islands is somewhat
more difficult, although not impossible. One way of
securing residence is to obtain a Home Owners Residence
Card, which must be renewed annually, and acts as both
visa and residence permit for the duration. (Strangely,
the applications of immigrants in possession of, or
looking to buy, local property valued at $500,000 or
more receive accelerated consideration!)
Anyone
seeking to obtain annual residence privileges should
expect to pay around $1,000 per year (with another $20
payable per dependent), while the head of a household
seeking permanent residence will pay approximately $5,000.
A non-Bahamian
looking to work on the islands must obtain a work permit
(each one being valid for that specific person and position),
but this is far from easy. In the case of senior executives,
or those possessing special skills not available in
the Bahamas, the process is accelerated; other foreign
nationals need to be assessed by the Immigration Board
(to ascertain their usefulness to the Bahamian community
and economy), and their prospective employer must obtain
a certificate from the Labour Exchange to the effect
that the job was advertised and interviewed for locally,
and there was no equally qualified Bahamian available
to fill the position. Only then will the issuance of
a work permit be considered.
The lifestyle
offered by the Bahamas for the resident/retired expat
is an enviable one, however, with the tropical maritime
climate making pursuits such as sailing, swimming, snorkelling
and golf popular and enjoyable. The official language
of the islands is English, and there are a number of
English language newspapers available, although Creole
is also widely spoken. The population of the Bahamas
is predominantly Christian.
Finally,
although the lack of income tax and tax on investment,
coupled with the burgeoning reputation of the islands
(in particular Nassau) make it an attractive destination
for possible future residence or retirement, do bear
in mind the import duties (which are very high), and
can sometimes be forgotten when making this kind of
decision. Although you will not be taxed on income or
investment gains, you will not be living 'tax-free',
by any standards, so this jurisdiction is perhaps more
suitable for those expatriates with a substantial net
worth.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
CAYMAN ISLANDS
Language -
English
Currency - Cayman Islands Dollar
Status - UK dependent territory
Population
- 46,600
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
N/A
|
N/A
|
N/A
|
N/A
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
7.5%
on transfers of real estate, up to 1% on legal
documents dealing with valuable assets or transactions
|
Import
duty
|
N/A
|
Stamp
duty and import tax
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Residence
Permit (granted on quota basis)
|
N/A
|
Yes
: cost varies widely
|
Chief
Immigration Officer
|
CAYMAN
ISLANDS
The Cayman
Islands are one of the premier offshore financial centres,
but have something of a reputation as a stereotypical
'tax haven' in Europe, although they have been attempting
to guard against money laundering practices. It has
to be said, however, that in the absence of proven wrongdoing,
the emphasis is still firmly on preserving confidentiality.
(Although this was dealt a blow by the judgement awarded
in 2002 to the US Internal revenue Service in Miami,
allowing them access to American Express and MasterCard
records covering US citizens with offshore assets in
the Caymans.) As with some other Caribbean jurisdictions,
recent international pressure is leading to new legislation
in this area.
Although
the jurisdiction is well suited to the majority of offshore
enterprises, particular specialities are banking, captive
insurance, trust formation and management. Mutual funds
are also a growing sector since the establishment of
the Cayman Islands Stock Exchange in 1997. There are
nearly 87,230 active corporations registered on the
island (2007), and around 340 banks, which are regulated
by the independent Cayman Monetary Authority. The regulatory
regime is in accordance with the Basle Committee regulations.
There are
no direct taxes levied in the Cayman Islands, with government
revenue coming from customs duties, stamp duty and registration
fees levied on corporations. There are no exchange controls,
and the islands are exceptionally politically stable.
Caymanian
residency has traditionally been granted on a quota
basis to citizens from countries including the UK and
British dependencies, Ireland, Australia, New Zealand
and the US. An expat applying for permanent residence
(without permission to work) will have had to prove
that they have sufficient financial resources to support
themselves and their families, and to invest at least
US $180,000 in local enterprise or real estate. Permits
have initially been valid for six months, but at any
point after that, the expatriate could apply to have
the status changed to permanent resident. A deposit
must also be provided against possible future repatriation
costs, and the amount varies depending on country of
origin.
After two
years of permanent residence, a foreign national wanting
to seek employment can usually apply for a work permit.
These are usually limited to a specified area of employment,
and are generally issued for 2-3 years for senior positions.
Work permit charges are payable, (which vary widely
according to the position applied for, and, to some
extent, the island on which the employment is located)
and the employer must put up the possible repatriation
deposit.
In January
2007, amendments revising the Cayman Islands Immigration
Law (2006 Revision) came into force. The Law contains
a number of changes to the Immigration Law, 2003, including
work-permit term limits, permanent residency, a new
category of 'key employees' and the ability of the Chief
Immigration Officer to grant Caymanian Status to certain
categories of applicants. The new law sought to clarify
the work permit rules after years of frequent change
to the rules, resulting in confusion for employers and
backlogs in the processing of work permit applications.
The concept
of tax residence is not applicable in the Cayman Islands
due to the lack of direct taxation.
English
and Spanish are widely spoken on the islands, and there
are a few English language newspapers available. The
climate is warm and tropical, and pastimes such as scuba
diving (which is said to have originated in the Cayman
Islands), motor sports, and golf are widely enjoyed.
The islands are predominantly Presbyterian, although
there are also Anglican communities, and Jehovah's Witnesses.
The cost
of living is relatively high (due to the fact that the
majority of goods are imported), but the absence of
direct taxation should offset at least some of this.
The overall standard of living is high, and whether
as a base for investment during your working life, a
temporary residence, or a possible future retirement
destination, the Cayman Islands are an attractive option.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
CYPRUS
Language -
Greek and English; Turkish in the north
Currency -
Euro (Turkish Lira in North)
Status -
Independent Sovereign Republic (Turkish area refers
to itself as Turkish Republic of Northern Cyprus)
Population
- 788,457
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
To
EUR16,000: Nil, after that, between 20-30%
|
N/A
|
20%
capital gains tax (except on sale of overseas
real estate by non-resident)
|
From
2.5-4% on property over EUR160,000
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
N/A
|
N/A
|
Present
for more than 183 days
|
Different
categories of resident (see summary)
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Residence
Permit; Cyprus is now a member state of the EU
|
N/A
|
Yes
: TRE permit
|
Immigration
Department and Central Bank
|
CYPRUS
Cyprus
is well known for its financial sector, with the primary
focus and expertise being in the formation and management
of offshore holding, investment, and trading companies.
These are a draw for foreign investors in part because
of the many double taxation treaties established between
Cyprus and other high tax countries, and in part because
of the low-tax offshore regime in place there - foreign
investment income is charged at 5% on amounts over approx.
EUR3,000 pa provided that the individual is neither
resident nor Cypriot, nor has economic activity on the
island. Although some countries offer more attractive
withholding tax rates, very few can compete with final
taxation this low.
The financial
sector is regulated by the Central Bank, and neither
expatriates nor offshore entities (when official consent
has been granted for offshore status) are subject to
exchange controls.
In addition
to the Central Bank, the Cypriot banking system consists
of 4 banks listed on the Cyprus Stock Exchange, 8 subsidiaries
of foreign banks, 2 banks licenced to conduct limited
banking operations, 8 branches of banks from EU countries,
17 branches of non-EU banks, 2 Representative Offices
and 4 other banks. Since 2005, all Cyprus companies
are 'onshore'; exchange controls have been abolished.
The Temporary
Residence Employment (TRE) permit acts as permission
to reside and work in Cyprus, and these are categorised
as executive and non-executive permits, with the latter
usually only issued if there is no suitably qualified
Cypriot available to take the position. However, they
are given fairly freely to senior employees of offshore
operations, and foreign nationals retiring to the island.
The TRE permit, until recently, was issued initially
for a two year period, renewable at three yearly intervals
subsequently.
Legislation
in July 2000 required an expatriate worker to have obtained
a five year permit, or have been resident in Cyprus
for five years, in order to be able to bring their spouse
and children to live with them. However, more recent
legislation (November 2000) relaxed this rule for expatriates
working in certain sectors (specifically education,
foreign media, offshore, accounting, and those who have
invested more than EUR160,000 in local enterprise).
An individual
is seen to be tax resident in Cyprus if he/she is present
for more than 183 days in any tax year, but the calculation
of liabilities is complex, as there are different rates
for foreign residents employed by Cypriot companies,
foreign residents working for foreign companies, and
foreign nationals employed by offshore entities. However,
with the exception of the foreign national employed
by an offshore entity, for whom the rate of income tax
has traditionally been reduced by half, all are liable
for income tax, capital gains tax (except on property
situated outside Cyprus), estate duty, and real estate
taxes. As a foreigner (whether resident or not), you
will need a permit from the government to purchase property
on the island, which should be for physical residence.
Cyprus's accession to the EU should mean that permits
should disappear for EU nationals; but this is taking
time.
Citizens
of EU member states are now of course entitled to work
in Cyprus without permits, but the process can be sticky
for some nationalities.
The majority
of the Cypriot population (80%) speak Greek, with the
remainder in the Northern sector speaking mainly Turkish.
English is also widely spoken, with German, French and
Russian being spoken in the main tourist centres. There
are several English language newspapers available, and
the warm Mediterranean climate means that pursuits such
as cycling, golf, and water sports are popular, although
winter sports (in winter!) are becoming more popular.
The predominant
religion is Greek Orthodox, and it is worth bearing
in mind that although civil disorder is not common,
there are tensions between the south and the northern,
Turkish controlled area of Cyprus. A visitor to the
north may not find it easy to gain subsequent access
to the south.
The permit
issued to intending retirees is usually issued for one
year, and is renewable annually thereafter, subject
to proof of adequate financial resources (i.e. capital,
investment income, or pension), and expatriate retirees
are not permitted to undertake any kind of work in Cyprus
except voluntary charity work. The network of double
taxation treaties means that in most cases, retirement
income remitted from abroad will not be subject to withholding
tax at source.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
GIBRALTAR
Language -
English, but Spanish widely spoken
Currency - Gibraltar Pound
Status - UK dependent territory
Population
- 27,967
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
Varies
depending on whether paying tax under Allowance
Based System or Gross Income Based System (Top
rate is 40%)
|
N/A
|
N/A
|
N/A
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
N/A
|
N/A
|
Present
for 183 days in tax year, or a mere visit if you
have accommodation
|
World-wide
income
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Cat
2-HNWI, Cat 3-Expat Executive, Cat 4-REPSS (but
see below for changes)
|
Cat
2-G£500 (Indefinite), Cat 3 or 4-G£500 (3 Year
Certificate)
|
Yes
|
Governor
(under Control of Immigration Ordinance)
|
GIBRALTAR
In terms
of investing and banking, Gibraltar offers a stable
and well-regulated jurisdiction, with offshore trusts
and 'exempt' companies (for the purposes of tax minimisation)
a particular speciality. The tax regime is favourable
for investors, although not so wonderful for residents,
there are no exchange controls, and with the exception
of the ongoing disagreements with Spain, the jurisdiction
is politically stable. There
were 26 banks in Gibraltar in 1996, but as at November
2006, the number stood at 18. The banking sector is
well established in both the offshore and local market,
with assets in the vicinity of G£8.3 billion.
The regulatory regime falls in line with both the Basle
and EU requirements. The Gibraltar Deposit Protection
Board operates a deposit protection scheme (did the
name give it away?).
Residence
and employment in Gibraltar are reasonably easy to obtain
if you are an EU national, as you will usually be issued
with a six month entry visa, followed by a five year
renewable permit if suitable employment has been found,
or if a business has been set up.
Non-EU
nationals are more limited in their options, but there
have traditionally still been several ways of obtaining
residence and work. Aside from applying for a job that
no resident Gibraltarian is willing to do (nice!), there
were more appealing status options for the expatriate.
These included:
- Category
2 individuals. Of recent years, Gibraltar has made
a number of concessions in order to persuade High
Net Worth Individuals to make Gibraltar their home,
and for a one-off payment of GBP500, and the provision
of 2 letters of reference (one of which must be from
a banker), a certificate will be issued, limiting
the individual's liability for taxation to the first
GBP50,000 of assessable income, with all further income
being tax free. (This usually results in a tax bill
of around GBP28,750)
- Category
3 individuals. If an expatriate executive is working
for an Exempt or Qualifying company (the usual choices
for a foreign investor), then their employer can usually
apply for a renewable (3 yearly) certificate at a
cost of GBP500, capping the tax payable at GBP10,000,
whatever their eventual income.
- Category
4 individuals. Relocated Executives Possessing Special
Skills (or REPSS) can apply for a certificate valid
for 3 years (and costing GBP500) limiting their tax
bill to GBP5,000 (on an income of GBP50,000 or less),
or GBP10,000 otherwise. In order to be eligible for
this permit, however, they must be able to prove that
they are providing a service or skill not available
in Gibraltar, and that their employment will be of
benefit to the economy of Gibraltar. The employer
has to create another job for a Gibraltarian alongside.
However,
several key changes to Gibraltar's personal tax regime
were introduced by Chief Minister, Peter Caruana in
his June 2007 Budget:
Acknowledging
Gibraltar's relatively high headline rates of income
tax, Chief Minister Peter Caruana announced a dual income
tax system and changes to the high-net-worth individual
(HNWI) scheme designed to make the tax system more attractive
to expat workers employed in the jurisdiction's finance
industry.
"Our
tax system has very high ‘headline’ rates
of taxation, but these are reduced to lower ‘effective’
rates by a generous system of tax allowances, the main
ones of which are mortgage interest relief, life insurance
premium relief, child allowances etc. This is all very
well, but taxpayers who cannot benefit from these allowances
because they are single, have no mortgage, no children
or no life insurance are left to pay the very high ‘headline’
rates" Caruana told parliament in his budget speech.
"This
is harsh on affected local residents, as well as being
a disincentive for location in Gibraltar for companies
that need to recruit specialist skills from abroad,"
he observed.
To remedy
this, Caruana announced that from 1 July 2007, every
taxpayer will be able to choose for each tax year between
two systems to pay tax, and to choose the one that results
in the lower tax payment, either of which can be paid
through the PAYE system.
The first
system is the existing Allowance Based System under
current tax rates, which were reduced in that year's
budget. The alternative system is a new Gross Income
Based system, in which the taxpayer will receive no
allowances, but will pay tax on gross income at the
following rates: 20% on the first GBP25,000; 30% on
the next GBP75,000; 40% above GBP100,000.
Caruana said
that the new Gross Income Based alternative will "very
significantly" reduce the tax payments of around
6,500 local taxpayers, and will substantially redress
the balance of taxation between those who enjoy certain
allowances and those who do not.
As a result,
no taxpayer with income below GBP25,000 per annum will
pay more than 20% income tax; no taxpayer with income
below GBP50,000 will pay more than 25% income tax; no
taxpayer with income below GBP100,000 will pay more
than 27.5% income tax; and no taxpayer with income below
GBP125,000 per annum will pay more than 30% income tax.
Access to
the Gross Income Based alternative will be subject to
rules to prevent married couples and others living together
from benefiting from both alternative systems.
Caruana also
announced some amendments to the jurisdiction's' high-net-worth
individual (HNWI) scheme. For HNWIs this scheme remained
largely intact except that with effect from 1 July 2007,
the minimum tax payable was increased from GBP14,000
per annum to GBP18,000 per annum and the taxable income
level was increased from GBP50,000 to GBP60,000.
Category
3 status was abolished for new entrants. Existing Category
3 holders will be able to retain that status until expiry
of their current certificate or for two years until
30 June 2009, whichever is the longer. However, the
amount of tax payable rose with effect from 1 July 2007
from GBP10,000 to GBP15,000 per annum.
A new category
called ‘High Executive Possessing Specialist Skills’
(HEPSS) was established for existing Category 3 holders
who earn more the GBP100,000 per annum, and new applicants
who possess skills not available in Gibraltar and, in
the Government’s opinion, necessary to promote
and sustain economic activity of particular economic
value to Gibraltar, who will occupy a high executive
or senior management position, and who will earn more
than GBP100,000 per annum of income in Gibraltar.
Tax will
be payable only on the first GBP100,000 per annum of
income under the dual choice tax system. New applicants
may not have been resident in Gibraltar for any part
of the period of three years immediately preceding the
application.
Category
4 Status was also abolished for new entrants with effect
from 1 July 2007. Existing holders may retain the status
until the end of the current certificate or 30 June
2009, whichever is the longer. However, minimum tax
payable will increase with effect from 1 July 2007 from
GBP5,000 per annum to GBP7,500 per annum.
Caruana also
announced rate cuts in the ordinary income tax system.
The top rate of tax was reduced from 42% to 40%. The
reduction in the top rate will thus have been reduced
from 50% to 40% over the last 10 years.
The standard
tax rate band (on which tax is paid at 30%) was widened
by GBP3,000 from the previous GBP4,000 to GBP13,000
to GBP4,000 to GBP16,000.
Whether
you are planning to spend your dotage on 'The Rock',
or whether you mean to retire at 40 and live the high
life, the lifestyle offered to you by any jurisdiction
will be high on your list of concerns.
The Gibraltar
lifestyle may be of most interest to UK expats, due
to the close relationship between the two countries,
and the official language is English, although Spanish,
Italian, Portuguese and Russian are also spoken. There
is a great deal of cultural diversity on the peninsula,
and the majority of the country is Roman Catholic, although
there are also Protestant, Muslim, and Jewish communities.
There are several English language newspapers available,
and the nightlife has a distinctly British flavour (and
can hence become a bit rowdy!) Water sports and wildlife
pursuits are available for the more active expat, and
crime rates are generally low.
A final
word of warning - Gibraltar, in common with many other
offshore jurisdictions, offers tax breaks to non-residents,
but not to residents, so although Gibraltar may be a
good base for your assets during your working life,
if it is where you plan to live on retirement, you need
to consider the impact of taxation on your income.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
GUERNSEY
Language -
English and French
Currency -
UK Pound
Status -
UK Crown Dependency
Population
-65,573
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
One
rate of 20%
|
Employee
pays 6%
|
Dwellings
Profit Tax : 100% on profits from sale of dwelling
or land unless used for genuine residence purposes
|
N/A
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
N/A
|
N/A
|
Present
for more than 182 days, or possession of a dwelling
place
|
Solely
and principally resident : World-wide income
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
RTW
Permit for limited period; long term residence
: as Jersey
|
N/A
|
Yes
: For non EU nationals
|
States
Defence Committee of the Aliens Office
|
GUERNSEY
Guernsey
is a very well respected offshore financial sector,
and although the financial sector is similar in many
ways to that of Jersey (for example the consistently
favourable tax regime, lack of exchange controls, and
strict regulatory controls), there are important differences,
for example in terms of particular areas of expertise.
Europe's
largest captive insurance sector is located in Guernsey;
at 31st October 2007, there were in total 638 international
insurance companies registered in Guernsey, comprising
303 captives, 71 PCCs and 262 PCC cells. Total assets
in 2006 stood at GBP18.8 billion. Additionally, in the
areas of PCCs, there is rising interest in special purpose
vehicles (SPVs), although these are usually only arranged
by well capitalised companies.
The island
is also well respected in terms of its advisory and
financial infrastructure, and expertise in trust formation
and management (there are more than 200 firms offering
fiduciary trust services in Guernsey, and over £50
billion in trust assets are held there). Investment
funds are flourishing alongside the Channel Islands
Stock Exchange (based in Guernsey).
Banking
is also a major source of revenue on the island. As
of June 2005, there were more than fifty licensed banking
institutions in Guernsey (all of which are subsidiaries
or branches of the top foreign banks), and although
the number of institutions has remained approximately
the same since the rapid growth period in the 1980's,
the deposit base has continued to grow, with only a
third of the amount held actually in sterling, reflecting
the increasing internationalisation of the island's
financial sector. Banks are regulated by the Financial
Services Commission (as in Jersey), and the capital
adequacy rules surpass the Basle requirements.
The immigration
and residence legislation is similar to that of Jersey,
and for the same reasons, namely limited space and resources,
and a desire to preserve the quality of life for existing
residents. As a result, although it is possible to obtain
short term residence and employment (with a 'Right to
Work', or RTW permit), long term and permanent residence
are very difficult to obtain. There are no real concessions
made to ordinary (i.e. not HNWI) expatriates, or employees
of resident exempt or qualifying companies - the RTW
permit grants permission to reside on the island for
its duration, and conversely, permission to reside automatically
confers the right to a RTW permit.
Tax residence
in Guernsey is assumed if an individual is present there
for more than 182 days, or if they possess a dwelling
place on the island. A solely and principally resident
individual will be liable for taxation on world-wide
income. A person not in possession of a dwelling place
in Guernsey is usually deemed to be resident, but not
solely and principally so. As such, they will usually
only be taxed on Guernsey source income, or income remitted
to Guernsey.
Both English
and French are spoken widely, and there are a couple
of English language newspapers available. The temperate
climate (mild in the winter, but cool in the summer)
means that water sports, walking, cycling, and golf
are among the leisure options available, and Christianity
is the dominant religion, with Anglican, Baptist, and
Congregational communities in evidence.
As with
Jersey, despite its manifest advantages as an offshore
base for your assets during your working life, unless
you are exceptionally well off, your chances of being
allowed to retire to Guernsey are very slim.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
IRELAND
Language -
Irish, but English in everyday use
Currency -
Euro
Status - Democratic Republic
Population
- 4,109,086
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
Progressive
rates to 42% plus a 2% or 4% levy
|
Employee
pays between 6% and 8% depending on pay
|
25%
exit tax on funds
|
N/A
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
Not
for property up to EUR150,000. After that, ranges
from 3% to 9%
|
N/A
|
Present
for more than half of tax year, or 280 days over
2 years
|
Resident
and domiciled: World-wide income
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Certificate
of Registration (Green Book)
|
N/A
|
Yes
: for non-EU nationals
|
Department
of Enterprise, Trade, and Employment
|
IRELAND
In the
investment and banking sector, Ireland has experienced
a great upsurge in the number and types of provider
available, due in great part to the establishment of
the IFSC (International Financial Services Centre),
which encouraged banking and investment providers to
physically locate in the old docks area in Dublin. However
the tax incentives concerned were phased out in favour
of a uniform 12.5% rate of corporation tax.
The jurisdiction
is particularly well thought of in terms of expertise
in the following areas:
- Banking.
There are literally hundreds of banks established
in Ireland, all of which are strictly licensed and
regulated by the Central Bank.
- Establishment
and management of investment funds, many of them linked
to life assurance - changes to the tax regime in 2001
increased the attractiveness of many of these funds
to Irish residents
- Management
and holding of international financial activities
There are
no exchange controls in Ireland, and the political situation
seems to be moving towards greater stability, although
religious and political tensions do still exist.
It is relatively
easy for EU nationals to enter the country, and on arrival,
no residence or work permit is necessary. Australian,
Canadian and US citizens do not need to apply for a
residence permit, but all other groups will need a work
and residence permit for the duration of their visit.
Although
Irish law does not allow for permanent residence as
such, any individual who has been granted a visa, and
wants to stay in the country for longer than three months
(for the purposes of starting a business, seeking employment,
or marrying an EU or Irish resident), can apply for
a Certificate of Registration (or Green Book) from the
local constabulary in their area of residence. The registration,
if successful, will act as permission to reside, and
will need to be renewed at regular intervals.
The concept
of domicile comes into play in the calculation of tax
liability in Ireland, but as this is normally (although
not always) the result of having an Irish-domiciled
father, most foreign nationals are not considered to
be domiciled in Ireland, even if they are resident there.
Tax residence is assumed if an individual is present
in the country for more than half of the tax year, or
over 280 days in two years. The liabilities are as follows:
- Domiciled
and resident Liable for tax on world-wide income
- Resident
but not domiciled Liable on foreign income only if
remitted to Ireland.
Although
Irish is the official language, English is spoken widely
on both a business and day-to-day level, and there are
several English language newspapers available. The majority
of the population (95%) is Roman Catholic, with the
Protestant community making up the remainder, and outdoor
pursuits such as horse riding, cycling, fishing and
golf are popular, despite the slightly damp climate.
There are
a few options available for the expat resident in Ireland
as regards retirement investment, but it is worth bearing
in mind that for the expat living in Ireland, who will
normally not be domiciled, offshore investment will
not be taxable in Ireland provided the proceeds are
not remitted there.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
JERSEY
Language -
English and French
Currency -
UK Pound
Status -
UK Crown Dependency
Population
- 91,321
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
One
rate of 20%
|
Employee
pays 6%, self-employed pay 12.5%
|
N/A
|
N/A
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
N/A
|
N/A
|
Present
for more than 6 months in any tax year, 3 months
per year over 4 year period, or Jersey abode visited
at any time
|
Resident
and ordinarily resident : World-wide income
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Dependent
on individual residence status rather than employment
|
N/A
|
Yes
: For non EU nationals
|
States
Defence Committee of the Aliens Office
|
JERSEY
Jersey
has an international reputation as one of the world's
major important financial centres, and as such is very
attractive to foreign workers and investors. The jurisdiction
is particularly well respected in the following areas:
- Banking.
Total deposits held with Guernsey banks at the end
of December 2008 increased in sterling terms by GBP20.8bn
from the end of September 2008 level of GBP136.3bn
to reach a new highest figure of GBP157.1bn, representing
a 15.3% increase over the quarter and 31.9% over the
year. Total assets and liabilities increased by GBP27bn
over the quarter representing a 17.8% increase to
reach the highest level yet at GBP179.2bn. This represents
a 35.9% increase over the year.
- Trust
formation and management. Total trust assets held
in Jersey exceed £100 billion.
Financial
and advisory services are generally of a very high standard.
The financial sector is regulated by the Financial Services
Commission, and in terms of banking, the capital adequacy
rules are considerably stiffer than the Basle requirements.
Jersey,
in common with Guernsey, is in an unusual position in
terms of residence, as there is limited space and resources,
and the existing residents are keen to maintain the
quality of life. Immigration policy reflects this situation,
and permission for long-term residence is almost never
granted.
In establishing
tax residence, there are several categories: residence,
ordinary residence (implying a more continuous presence
on the island) and non-residence. An individual who
is resident and ordinarily resident is liable for tax
on their world-wide income, whereas a resident (but
not ordinarily resident) person will only be taxed on
income arising in Jersey, or foreign income remitted
there. There are no real concessions made, or incentives
offered for expatriate executives in terms of residence
or taxation; in Jersey, there are no broad provisions
made - it is your individual situation which is important.
English
and French are both official languages in Jersey, (although
the former is more often used for business purposes),
and there are two main English language newspapers in
circulation on the island. The climate is mild and sunny,
with golf proving equally popular with expatriates and
residents alike, and the population is predominantly
Christian.
The bottom
line if you are thinking of retiring to Jersey is…not
unless you are extremely well off! As previously mentioned,
long term residence in Jersey is almost an impossibility,
and the only time that exceptions are made is in the
case of HNWI purchasing substantial (preferably luxury)
property, and who will obviously contribute a great
deal to the island's economy in terms of taxes and investment.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
MALTA
Language -
Maltese and English
Currency - Euro
Status - Parliamentary Democracy
Population
- 401,880
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
To
EUR11,400: Nil, after that between 15-35%
|
Employee
pays 10% of basic weekly wage
|
N/A
|
N/A
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
Share
transfers: 2%, Share issues: 0.4%, Transfers of
immovable property: 5% (Rates may differ for residents
and non-residents)
|
N/A
|
Present
for more than 6 months
|
Domiciled
and resident: World-wide income
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Residence
Permit
|
N/A
|
Yes
: Stringent requirements, because high unemployment
|
Principal
Immigration Officer
|
MALTA
Maltese
banking and investment has traditionally been quite
a small scale and local affair, but with the introduction
of the Maltese stock exchange, and its continuing success
in attracting mutual fund listings, this may all be
set to change. Growth areas in Malta include banking,
investment fund management, trust management, and investment
holding, and there are several hundred foreign companies
established on the island.
There are
also a number of local banks (but very few foreign banks,
as foreign banking activity was very strictly controlled
until recently), and these are regulated by the Maltese
Financial Services Centre. Although legislation governing
the financial sector was relatively late in arriving,
the professional and business infrastructure is good,
and as a result, reasonably well regulated.
Malta levies
moderately high internal taxes, but offers low tax incentives
to individual foreign investors and companies alike.
The island
has experienced some problems since it became independent
from the UK, and when the British military withdrew
in 1979, the economy slumped, and the political conditions
were not good for business investment. However, the
situation has improved vastly, and the financial sector
is developing well.
In order
to obtain a residence permit, a foreign national must
be able to demonstrate sufficient income or capital,
and must agree to buy or rent local property on the
island.
Work permits,
however, are a little harder to get hold of, and due
to the historically high level of unemployment on the
island, the criteria are quite strict. The Principal
Immigration Officer must be applied to, and a permit
is usually only issued if there is no suitably qualified
Maltese resident available to fill the position, and
if the prospective employer agrees to put in place training
and understudying programmes.
Tax residence
is assumed if an individual is present for more than
six months in any tax year, and Malta is one of the
few jurisdictions in which the concept of domicile comes
into play when calculating tax liabilities, which are
as follows:
- Domiciled
and resident: Liable on world-wide income
- Resident
(but not ordinarily resident) and not domiciled: Taxable
only on Maltese income, and foreign income remitted
to there.
The principal
languages spoken in Malta are Maltese and English, although
some Italian is spoken, and there are a number of English
language newspapers available. The warm weather throughout
the year means that pursuits such as walking, cycling
and golf are popular, and there is a strong and active
Roman Catholic community in place on the island.
The attractive
standard of living, and number of tax breaks available
for foreign national retirees (i.e. lack of property,
estate, municipal, and local taxes, and absence of income
and capital gains taxes on income arising outside Malta
if not domiciled there) mean that overall, Malta is
a very attractive destination as a retirement haven.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
PANAMA
Language -
Spanish, but English widely spoken
Currency -
US Dollar
Status - Constitutional republic
Population
3,242,173
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
Progressive
to 27%
|
Employee
pays 7.25% plus 1.25% educational tax
|
Levied
on real estate gains
|
Tax
levied annually on sliding scale
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
On
official public documents; seller pays 2% on real
estate transfers
|
N/A
|
Present
for 180 days in tax year
|
Territorial
Basis
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Different
types of visa (See summary)
|
N/A
|
Yes
: for anyone other than Panamanian citizens
|
Ministry
of Labour and Social Welfare
|
PANAMA
Panama
is the premier jurisdiction for offshore banking and
shipping in Central and Southern America. Although it
gained something of an unsavoury reputation in the 1980's,
the government is attempting to move away from this
image, and the incentives offered to foreign and domestic
investors and efficient banking system seem to be having
the desired effect; the volume of trade and number of
individual clients using Panama as a base for their
offshore activity has increased dramatically over the
past few years.
Panama
operates a territorial tax system, meaning that only
income arising in Panama or from there is liable to
taxation.
However,
a fiscal reform package introduced in 2005 and which
took effect from 2006 in most respects has changed the
rules in some ways:
According
to the newly introduced Paragraph 1-A of article 694
of the Fiscal Code, income derived from personal services
such as wages, salaries and other personal remunerations
will be treated as originating from a source located
within Panamanian territory – even though such
personal services may be physically and actually rendered
both within and outside Panamanian territory –
if the individual taxpayer resides in the Republic of
Panama for at least 70% of the calendar days of any
given year.
There are
no exchange controls.
Banking
legislation is liberal, and there are tight secrecy
provisions. There are over 120,000 companies established
in Panama, and around 80 licensed banks (2005), most
of which specialise in South and Central American business.
The large banking industry is regulated by the National
Banking Commission, which fulfils some of the responsibilities
of a central bank (as there isn't one), and grants banking
licenses. The commission is very selective in granting
licenses, and overall, branches of well-established
and respected banks are preferred.
There are
several different types of visa available for those
wishing to work and live in Panama, including one specifically
designed to ease the passage of the wealthy expatriate
retiree into Panamanian life. Briefly, these are:
- Tourist
Visa. A short term (up to 3 months) visa, which is
easily obtainable
- Temporary
Visitor Visa. Easily obtainable
- Special
Temporary Visitor Visa. Easily obtainable
- Tourist
Pensioner Visa. This is given to retirees who can
demonstrate a monthly income of $750 or more from
interest on time deposits in Panamanian banks.
- Immigrant
Visa. Given to long-term working residents
- Investor's
Visa. Given to those who invest their own capital
in local business activity in areas such as the commercial,
financial, agricultural, industrial, or reafforestation
sectors.
In order
to work in Panama, however, a work permit (usually valid
for one year) will need to be obtained from the Ministry
of Labour and Social Welfare. Bear in mind that there
are restrictions placed on the number of non-Panamanian
citizens that can be employed by any company, even foreign
companies (although there the quota is higher).
Expats
planning to retire to Panama will almost certainly find
something to their taste, with the tropical climate
ensuring that pastimes such as water sports, fishing
and golf are perennially popular. The majority of the
population is Roman Catholic, and the entertainment
options are many and varied, with night clubs, casinos
and theatres available in the major cities.
As previously
mentioned, Panama actively encourages wealthy pensioners
to retire there, and Pensionado residence (available
to expats that can demonstrate a certain level of verifiable
monthly income for themselves and their dependents,
and a clean bill of health) could be an attractive option.
As a Pensionado resident you would be eligible for many
'perks', including discounts on a range of services
and utilities, and tax breaks on the importing of household
goods, and automobile purchase.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
SWITZERLAND
Language -
French, German, Italian and Romansch
Currency -
Swiss Franc
Status -
Federal Republic
Population
- 7,554,661
|
INCOME
TAX
|
SOCIAL
TAXES
|
CAPITAL
GAINS TAX
|
PROPERTY
TAX
|
|
Levied
at federal, cantonal and communal levels; doesn't
usually exceed 40%
|
Usually
about 13.1% of employee's salary; paid by them
and the employer in equal amounts
|
Capital
gains tax on real estate transactions averages
18%
|
N/A
|
|
STAMP
DUTY
|
OTHER
TAXES
|
TAX
RESIDENCE QUALIFICATION
|
BASIS
OF RESIDENT TAXATION
|
|
1%
on issue of shares where value is over SFr250,000
|
Inheritance
Tax and Wealth Tax
|
Present
for more than 180 days (or 90 if in same abode
constantly)
|
See
summary
|
|
LEGAL
BASIS OF RESIDENCE
|
COST
OF RESIDENCE DOCUMENT
|
WORK
PERMIT REQUIRED?
|
WORK
PERMIT AUTHORITY
|
|
Residence
Permit
|
Varies
accrording to type of permit
|
Yes
: tied in with residence permit
|
N/A
|
SWITZERLAND
Switzerland
has established a world-wide reputation as one of the
world's premier financial centres, and is famed for
being a neutral, secure low tax jurisdiction, with stringent
banking secrecy legislation. It could be argued that
the necessity of preserving this reputation prevents
participation in some of the more risky (but potentially
more profitable) growth areas of investment. However,
if you are looking for solid gains, security, and a
guaranteed reputation, then Switzerland is probably
the jurisdiction for you. The political stability of
this jurisdiction is one of its main 'selling points'.
Switzerland
has always been best-known for its banking sector, with
over 500 major banking institutions estimated to hold
approximately 35% of the world's private wealth. Switzerland's
decision to remain outside the EU and its insistence
on retaining banking secrecy have reinforced its attractions
as a safe home for wealth. Switzerland does however
impose withholding taxes on many types of payment leaving
the country, so it's not necessarily suitable as a base
for wealth which is to be used to provide ongoing income
in another country.
The Swiss
are generally moderately taxed, with the process taking
place at federal, cantonal, and communal levels, and
there are no exchange controls.
The processes
for obtaining residence, employment, and permission
to purchase real estate are intertwined, with a number
of different permits offering varying degrees of freedom
to the bearer:
- 120
day permit. This permit allows a specialist or managerial
worker to reside in Switzerland for up to 120 days,
filling a specified position. This is the only permit
not subject to a quota system.
- Class
A permit. This is granted to 'blue collar workers'.
- Class
B permit. This permit is usually issued to professionals,
those who want to start a business in Switzerland,
and those wealthy enough to live off their own resources
whilst resident. This is the most commonly issued
permit, and is usually valid for a year at a time,
entitling the bearer to bring their spouse and children
to live with them. However, the expatriate worker
must be immigrating in order to fill a specific position,
and must not be depriving a Swiss national of employment
by taking the job.
- Class
C permit. This is intended to provide longer-term
residency, and provides the permit holder with the
same rights as a Swiss citizen (among them, the right
to purchase local real estate). To be eligible for
a Class C permit, the expat must have been in possession
of a Class B permit for between 5-10 years, with the
length varying according to country of origin.
- Fiscal
Deal Permit. This type of permit is suitable for the
retired HNWI with a verifiable net worth of (at the
time of writing) over 2 million Swiss Francs , who
is willing to spend at least 180 days per year physically
present in Switzerland.
In September,
2005, a 56% majority of Swiss voters approved proposals
to open the country's borders to workers from new EU
member states. The vote in favour of the extension of
the bilateral agreement on freedom of movement to the
ten new members was welcomed by both the Swiss authorities
and the European Commission, as there had been some
uncertainty as to the public mood on the matter.
The
free movement of persons between Switzerland and the
ten new EU member states will be introduced by separate
transitional provisions regulated in an Additional Protocol
to the existing Agreement on the Free Movement of Persons.
Regulations applicable to third-country nationals will
continue to apply until the Additional Protocol comes
into force.
Residence
for tax purposes is assumed if an individual is in Swiss
employment, carries on business there, or is present
in the country for more than 180 days in any one tax
year. As previously stated, there is no centralised
tax regime as such, due to Switzerland's federalised
nature, and with the exception of 'Fiscal Deal' residents,
no distinction is made between residents and non-residents
in terms of income tax, capital gains tax, stamp duty,
etc.
Languages
commonly spoken in Switzerland include German, French,
Italian and English. Although the most popular newspapers
are published in French and German, there are a multitude
of English-language European and international newspapers
available. The climatic variations caused by the Alps
mean that popular leisure pursuits include hiking, cycling,
and both winter and water sports. The religious community
in Switzerland is fairly evenly split, with 49% of the
population Roman Catholic, and 48% Protestant.
Switzerland
is one of the few jurisdictions with special provisions
for foreign nationals hoping to retire there, and for
those with sufficient assets, the aforementioned 'Fiscal
Deal' is an ideal retirement option, providing substantial
tax advantages, as individuals are not taxed on their
actual yearly income or assets, but on a nominal amount.
For a more
detailed treatment of the tax and legal regimes in this
and 35 other offshore jurisdictions, please visit the
Lowtax
Jurisdictions Guide.
|
INVESTORSOFFSHORE.COM
