BERMUDA
Language
- English
Currency - Bermuda Dollar (although
USD widely accepted)
Status -
Self-governing British Dependency
Population
- 66,163 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| N/A
|
Employee
pays $21.34 per week, increased by 4.75%
in 2005. Self-employed pay twice this |
N/A
|
22%
payable by foreigners on purchase of real
estate |
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| Duty
on Bermudan assets on grant of probate:
5% on value between $20,000 and $100,000
and 10% thereafter |
Payroll
taxes: Employer pays up to 13.5% |
Possession
of work permit |
No
direct taxes |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Work
permit allows residence while valid |
N/A
|
Yes
|
Minister
of Labour and Home Affairs |
Bermuda
Early
on in Bermuda's development as an offshore financial
centre, the decision was made to exclude foreign
banks, but this does not seem to have harmed the
jurisdiction's reputation as an international
business location. Classical banking services
in Bermuda were therefore provided primarily by
the three established Bermudian banks, until the
biggest of them, Bank of Bermuda, was taken over
by HSBC in March, 2004, but these banks have adequate
international correspondent networks with some
overseas branches, and are equipped to provide
the range of financial services necessary to conduct
business offshore.
There
are also a number of foreign firms now authorised
to provide financial services (with the exception
of deposit taking) internationally, although they
cannot as yet participate on a local level unless
60% local ownership can be established. The banking
sector is regulated by the Bermuda Monetary Authority,
and is generally regarded as strictly regulated.
The
jurisdiction is also well regarded in the following
areas:
-
Investment funds
-
Trusts and trust management
-
Insurance, including captive insurance
Exchange
controls do not apply to non-residents or offshore
entities, but do affect Bermudian citizens and
local companies. There are no direct taxes levied,
but payroll taxes, and annual fees by businesses
are payable.
Obtaining
residence and employment in Bermuda can be somewhat
problematic (although it is, theoretically at
least, possible), and affirmative labour legislation
is being introduced which could affect the ability
of local employers to take on expatriates. In
order to preserve the limited resources of the
islands, and maintain the standard of living of
existing residents, Bermuda has, in effect, closed
the door to long term residence applications,
so while you may be allowed to reside there temporarily
for work purposes, and it may be an ideal location
for your assets while you are young and healthy,
you may as well abandon those dreams of sunning
yourself on a Bermuda beach after retirement!
In
order to obtain a work permit, the prospective
employer must apply to the Minister of Labour
and Home Affairs on your behalf, having first
proven that there was no suitably qualified Bermudian
available to fill the position, and that no citizen
of Bermuda will be disadvantaged by you taking
the job. Work permits are usually issued for a
year at a time (with the exception of work permits
for senior executives which can be issued for
longer periods), and the cost is met by the prospective
employer.
Foreigners
are more or less unable to buy land or property,
other than houses with an Annual Rental Value
(ARV) in excess of $43,800. equivalent to a sale
price of say $500,000. A fee of 22% of the value
of the property is payable on purchase.
The
official business language of the jurisdiction
is English, and there are several English language
newspapers available. There are a variety of leisure
pursuits and pastimes, including golf, water sports
and tennis, and the climate is mild and humid.
The majority of the population are Christian.
As
previously stated, long term residence is exceptionally
difficult to obtain, so unless you are very wealthy,
retiring to Bermuda is probably not a viable alternative.
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
DUBAI
Language
- Arabic, but English widely spoken
Currency -
UAE Dirham
Status -
Member of the United Arab Emirates
Population
- In the region of 1.4 million |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| N/A
|
N/A
|
N/A
|
5%
residential tax on rental value (10% for
businesses) |
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| N/A
|
N/A
|
N/A
|
No
taxes other than import tax, residential
tax, and tax on hotel services |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Residence
Visa stamp in passport |
N/A
|
Yes |
Ministry
of the Interior (Naturalisation and Immigration
Department) |
Dubai
There is a fairly clear distinction drawn between onshore financial services
and offshore in Dubai, and the vast majority of offshore activity takes
place in the Jebel Ali Free Zone, Dubai Internet City, and the more recently
established Dubai International Financial Centre (DIFC). These zones have
been created since 1985 for the purposes of facilitating investment, and
all activity which takes place there is effectively seen legally as taking
place outside the United Arab Emirates.
The
jurisdiction has a highly developed banking industry,
and with government initiatives to encourage e-commerce
well underway, the various institutions are rushing
to deliver more and more technologically advanced
solutions. The banking sector is regulated by
the Central Bank, and there are approximately
47 commercial banks operating (with a total of
around 350 branches) of which 28 are foreign banks
(with a combined total of more than 200 branches).
The
Jebel Ali Free Zone and its fellows are advantageous
areas in which to establish and administer an
offshore company.
Taxation
in Dubai is generally low (with the exception
of the oil industry and domestic banking, where
the rates are slightly higher), and there are
no income or capital taxes, low import duties,
and no withholding taxes. There are also no foreign
exchange controls.
The
Dubai Naturalization & Residency Department
(DNRD) issues different types of visas which are
listed below.
1)
96 hour visa:
- Issued
upon arrival at the airport
- Airline
sponsored only
- Applicants
should have onward booking
- Should
have a minimum of 8 hour transit break
2)
Visit visa:
2.1 In case of Personal sponsorship:
- Fees:
Dhs 100
- Entry
permit application form with completed typed
data
- Original
Marriage certificate and copy of it, in case
of wife sponsorship
- Salary
Certificate; The monthly salary should not be
less than Dhs. 4000 in case of wife sponsorship,
and Dhs. 6000 in case of first relatives sponsorship.
- Copy
of the Sponsor passport
- Copy
of the Sponsored passport.
2.2
In case of Establishments sponsorship:
- Fees:
Dhs 100
- Entry
permit application form with completed typed
data
- Establishment
card and copy thereof
- Copy
of the Sponsored passport.
2.3
Renewal:
- Fees:
Dhs 100
- Original
Entry Permit.
2.4
Extension:
- Fees:
Dhs. 500
- Original
Entry permit
- Extension
application form
- Original
sponsored passport.
3
- Transit visa
- Fees:
Dhs. 120
- Establishment
card
- Entry
Permit Application form
- Copy
of Sponsored passport.
4
- Tourist visa
- Fees:
Dhs. 100
- Establishment
card
- Statement
of tourists data
A
Multiple Visit Visa can be granted after a normal
visa has been issued and used, and is an option
for business visitors who are frequent visitors
to the UAE and who have a relationship with a
reputable company in the UAE. Valid for six months
from date of issue, each visit must not exceed
30 days in total. This visa costs Dh1000. The
visitor must enter the UAE on a visit visa and
obtain the multiple entry visa while in the country.
A
Residence Visa stamped on a passport proves the
legal residence of an expatriate in the country.
This visa is given to workers who have obtained
work permits or for relatives living with them
permanently, and additional documentation is required.
Although
Arabic is the official language in Dubai, English
is spoken almost as widely, and there are three
English language newspapers currently published
there. The majority of the population is Muslim,
with Sunni and Shiite accounting for 84% and 16%
of people respectively. The climate is hot - the
coolest part of the year is between October and
May, and water sports and golf are the favoured
pursuits of both locals and expatriates.
There
are no real provisions for residence in Dubai
on anything other than a relatively short term
basis, and then only for the purposes of employment,
so while Dubai may have advantages as on offshore
base for assets, it may be difficult to obtain
permission to retire there.
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
HONG KONG
Language
- English and Chinese
Currency -
Hong Kong Dollar
Status -
SAR of China
Population
- 6,980,412 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| Progressive
from 2% to 17% after allowances, or a flat 15% |
Those
earning more than HK$4000 per month must
pay 5% of salary up to maximum of HK$20,000
per month |
N/A |
15%
of assessed annual rental income, plus annual rates tax of 4.5%
of annual value of premises |
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| Sliding
scale : To maximum rate of 3.75% on property
over US$800,000 |
Estate
Duty : Levied at progressive rate |
N/A
|
Territorial
Basis |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Employment
Visa (Different types-see summary) |
N/A
|
Employment
Visa required |
HKSAR
Immigration Department (Director of Immigration)
|
HONG
KONG
In
terms of both range and quality of financial and
business services provided, Hong Kong is one of
the world's leading jurisdictions. It is not an
'offshore' location as such, but the non-discriminatory
low tax regime is run according to territorial
principles, which means that only Hong Kong source
income is liable for taxation, and there are a
number of other incentives which have successfully
attracted a great amount of foreign investment.
The
jurisdiction is the world's third largest financial
centre, and the financial and advisory infrastructure
is of a very high standard generally. Hong Kong
is a particularly advantageous location for the
following sectors:
- Banking.
Hong Kong has the one of the largest colonies
of international banks in the world, with more
than 70 of the top 100 banking establishments
having a presence there. In December, 2008,
there were 142 licensed banks, 29 restricted
licence banks and 29 deposit-taking companies
in business. In addition, there are 79 local
representative offices of overseas banks in
Hong Kong.
-
Investment fund establishment and management.
The jurisdiction is widely recognised as the
leading fund management centre in Asia.
-
Investment and holding companies. These are
a particularly attractive proposition in Hong
Kong due to the benign tax regime and investment
incentives offered.
There
is no capital gains tax, withholding tax, sales
tax, VAT, or annual wealth tax, and no one, resident
or otherwise, pays tax on investment income or
capital gains. There are no exchange controls,
and the financial sector, which is regulated under
the Banking Ordinance, is secure and well managed.
A note of caution, however - Hong Kong is a relatively
expensive jurisdiction in which to establish an
offshore structure, so be warned that charges
for services may be more than you would pay elsewhere.
There
are several types of visa which will allow you
entry to Hong Kong, and some are easier to obtain
than others. Briefly, the categories of permit
are:
- Employment
Visas. In order to obtain entry for the purposes
of working in Hong Kong, you must first have
an employer willing to take you on if your application
is successful. You must also be providing a
skill which is not available locally, and which
is of benefit to the Hong Kong economy. This
type of visa will generally be needed by :
-
Inter-company transferees who are being relocated
to work in the Hong Kong branch of their parent
company. These are generally quite readily issued.
- Locally
recruited expatriates, who have been offered
a position whilst staying in Hong Kong. This
type of visa is quite difficult to obtain, as
the immigration department needs proof that
there is no-one resident in the SAR already
that could adequately fill the position
- Specially
recruited expatriates who have been headhunted
from abroad to do a specific job in Hong Kong.
Again, these visas are sometimes difficult to
obtain due to the need to convince the SAR that
no one locally could fill the position.
- Dependant Visas (for spouses and children of expats).
- Investment-based
Employment Visas. Once easy to obtain, the criteria
which must be fulfilled in order to be eligible
for this type of visa have become much more
rigorous of recent times. It must be proved
that the business is well capitalised, and can
set up a local office and employ resident staff
almost immediately. The enterprise must have
the support of a well-established local or international
business, and must demonstrate that it will
be of benefit to the local economy.
In
October, 2007, Hong Kong leader Donald Tsang announced
new plans designed to ensure that Hong Kong's
position as a leading global finance hub is consolidated
and strengthened. He observed that China's rapid
development and the opening up of its financial
sector have presented unprecedented opportunities
for Hong Kong's financial-services sector.
Tsang
added that with these large-scale development
projects, Hong Kong will need to expand its pool
of skilled workers, and will "require talented
people from everywhere". Consequently, to
help attract more qualified people, the Quality
Migrant Admission Scheme's requirements will be
relaxed and widely promoted.
Although
residence for taxation purposes is not really
an issue, residents will have to pay salaries
tax, social insurance, stamp duty, gifts tax,
and property tax. However, compared to most onshore
jurisdictions, the rates of taxation are low.
Hong Kong does not offer any residential concessions
based on property ownership due to overcrowding.
The
majority of the population is Buddhist or Taoist,
although the Christian community accounts for
approximately 10% of the people. The principal
languages are Chinese (usually Cantonese) and
English, with the majority of official documents
printed in both. There are several English language
daily newspapers. The cost of living is reasonably
high, with accommodation being the main expense,
and the tropical climate means that leisure pursuits
such as horse racing, golf, water sports, and
contact sports are popular.
In
terms of retirement, if you can gain admission
and permission to reside (sometimes no mean feat!),
and can cope with the relatively high cost of
living, then Hong Kong is ideal, as income from
retirement schemes is not taxed (even for residents),
so it is a suitable jurisdiction in which to base
a retirement fund, whether you plan to live there
or not.
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
ISLE OF MAN
Language
- English
Currency -
UK Pound
Status -
UK Crown Dependency
Population
- 75,831 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| 10%
on first GBP10,500, and 18% on the balance |
Employee
pays 6.3%, Self-employed pay 11.6% |
N/A
|
N/A
|
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| N/A
|
N/A
|
Present
for 6 months in tax year, or 3 months each
year for 4 consecutive years |
World-wide
income |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Legislation
similar to UK |
N/A
|
Yes
|
DTI
(Employment Division) |
Isle Of Man
The
Isle of Man is respected as a developing and well-regulated
International Offshore Financial Centre.
There
are no capital or exchange controls, and the jurisdiction
has a particularly good reputation in the following
areas:
- Banking.
There are approximately 54 banks established
in the Isle of Man at present, regulated by
the Financial Supervision Commission, including
branches and subsidiaries of the main UK clearing
banks. The majority of these are engaged in
providing private banking services to UK expats
and foreign nationals, and as such the range
of services available is extensive, including
not just deposit taking, but also formation
and management of trusts, companies, and their
underlying assets.
-
Investment Fund establishment and administration.
-
Captive insurance.
-
Trust formation and management.
The
Isle of Man is extremely stable politically; the
Tynwald or Manx parliament was established by
the Vikings! The taxation regime is moderate,
with taxes of between 10 and 18% on resident individuals
and on the Manx sourced income of non-residents.
The
immigration procedure for the Isle of Man is very
similar to that of the UK, and an Irish or UK
resident will not need to contact the immigration
department before arrival. Due to the recent expansion
of the island's offshore sector, skilled expatriates
are being encouraged to relocate there, and to
buy property. The Isle of Man has a relatively
low population density, and plenty of development
land, so for the moment at least, it is better
placed than smaller offshore centres (for example
Jersey and Guernsey) in terms of population and
economic growth.
However,
better placed or not, there has been some discussion
in parliament of the need to impose some kind
of immigration controls on non-Manx individuals,
in order to avoid disadvantaging the indigenous
population in terms of employment and rising property
prices.
Tax
residence is assumed when an individual is present
for more than six months in any tax year, or for
an average of three months per year over four
or more years. However, there is a concession
for property owners which allows them to be resident
for up to four months in two consecutive years
without becoming liable for Manx income tax.
The
original language of the Isle of Man is Manx Gaelic,
but this has been marginalised now by English,
which is most commonly used in business and day
to day transactions. There are several English
language newspapers, and the temperate climate
means that outdoor pursuits such as motor racing,
sailing, golf, and walking are popular with expats
and locals alike. The island is predominantly
Christian.
In
terms of retiring to this jurisdiction, despite
the many advantages it offers in terms of investing,
banking, and professional financial services provided,
it is worth remembering that although there are
tax breaks available for non-resident individuals,
local taxes will apply to your world-wide income
as a resident.
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
LIECHTENSTEIN
Language
-
German, but French and English also spoken
Currency -
Swiss Franc
Status -
Constitutional Monarchy
Population
- 34,247 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| Depends
on level of taxable income and commune of
residence (up to a maximum of 18%) |
Employees
pay 4.3% of gross pay |
Sliding
scale, reaching maximum 0.9% |
N/A
|
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| N/A
|
Gift
and Estate Tax |
Maintaining
residence with the intention of staying,
or performing activity for monetary gain |
World-wide
income and wealth |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Residence
Permit |
N/A
|
Yes
: but EU and EEA country nationals have greater freedom |
|
Liechtenstein
Liechtenstein's
economic union with Switzerland (established in
1922, and reinforced in 1980), propelled it into
rapid financial development. The jurisdiction
is most noted for its private banking facilities,
but it is also a particularly advantageous location
for establishing tax-exempt holding and domiciliary
companies, and trusts. Although Liechtenstein
is a civil law jurisdiction, there is a trust
regime based on common law principles.
Legislation
is being discussed to aid the development of the
captive insurance and collective investment sectors,
but as yet, these have made little impact on the
world arena.
This jurisdiction, like many others, has come under international pressure
to legislate against money laundering practices, and measures have been
taken to ensure greater transparency. Liechtenstein is entering a growing
number of Tax Information Exchange Agreements with other countries.
The
financial sector is regulated under the Law on
Banks and Finance Companies (1993), and the 'Know
Your Customer' system is now legally compulsory.
There are no exchange controls in Liechtenstein.
Liechtenstein's
immigration regulations bear a great deal of resemblance
to the Swiss regulations, and a residence permit
(obtained from the Aliens Registration Office)
is necessary for any non-EEA (European Economic
Area) citizen to stay for longer than three months.
Work permits are also necessary, although again,
EEA citizens will be allowed greater freedom of
movement and employment privileges. There are
restrictions on foreigners wishing to purchase
real estate in Liechtenstein, and tax residence
is assumed if:
- An
individual maintains a place of residence with
the clear intention that it should be used
-
An individual resides in Liechtenstein and performs
any kind of activity for monetary gain.
The
jurisdiction is a relatively expensive one in
which to conduct offshore business, but resident
taxation is moderate, and non-resident and offshore
taxation even lower.
The
official language of the principality is German,
although English and French are also widely spoken.
The majority of the newspapers on offer are published
in German. The population is predominantly Roman
Catholic, and the temperate Alpine climate means
that winter sports and cycling are popular.
The
tax treatment of retired expatriates resident
in Liechtenstein is neither punitive nor particularly
appealing, so the draw here will probably be lifestyle-driven
as opposed to financial.
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
LUXEMBOURG
Language
- Letzeburgesch is the official language,
but French, German and English also widely
spoken
Currency - Euro
Status - Constitutional Monarchy
Population
- 480,222 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| Progressive
rates up to 38% plus 2.5% unemployment fund surcharge |
Unemployment
contributions plus sickness, pension and accident insurance, totaling
14.45% for the employee |
Many
types of capital gain are subject to regular income tax |
There
are various taxes on real estate including a 7% tax on transfers |
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| N/A
|
'Fortune'
tax was 0.5% of final net asset value, but
was abolished in 2005 |
Present
for more than 6 months in any tax year |
World-wide
income |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Provisional
Residence Permit |
N/A
|
Yes
: For non-EEA nationals |
Ministry
of Labour |
Luxembourg
Luxembourg
has a strong private banking sector, due to the
absence of withholding tax on interest payments,
and strict banking secrecy.
As at January 31st 2009, there were 152 banks registered in Luxembourg,
according to the Commission de Surveillance du Secteur Financier (CSSF),
which regulates the financial services sector, with assets thought to
exceed EUR 1 trillion. The regulatory regime is reasonably relaxed, there
are no exchange controls, and banking secrecy actually has a statutory
basis in this jurisdiction; it is a criminal offence for bank staff to
break these codes unless there is very clear evidence that tax fraud or
money laundering activities have taken place. However, like many other
jurisdictions Luxembourg is signing an increasing number of Tax Information
Exchange Agreements.
Other
(related) jurisdictional specialities include:
- Collective
investment funds. The Luxembourg stock exchange
specialises in these, and many Luxembourg-registered
funds are also listed there.
-
Holding Companies. These are tax exempt vehicles,
and are suitable for holding international investment,
although are not eligible to trade themselves.
Luxembourg
is politically stable, but as a member of the
EU, it is in a difficult position, as pressure
from the OECD/FATF recommendations conflicts with
its reliance on the 'offshore' sector for revenue.
Along with the UK and (at times) Austria, Luxembourg
resisted the proposed EU withholding tax during
1999 and 2000.
When the EU agreed the Savings Tax Directive in 2003, Luxembourg decided
to apply a withholding tax, initially at 15%, now at 20%, on the returns
on savings of EU nationals.
In general, for resident individuals, taxes are fairly high, in addition
to income tax (rising progressively after a certain income threshold to
a maximum marginal rate of around 38%).
EU residents will not need a work permit, but all other expatriates will
need to apply (in advance) to the Ministry of Justice for a Provisional
Residence Permit, and to the Ministry of Labour for a work permit. If
an individual is present in Luxembourg for more than six months, then
he/she is assumed to be tax resident, and as such, is liable to tax on
world-wide income at the rates mentioned above.
The
official language is Letzeburgesch, but French
and German are usually used for business and administrative
purposes, and English is also spoken. There is
one English language newspaper published weekly
(although there are German dailies), and 91% of
the population are Roman Catholic.
The
weather is generally favourable from May to September,
with snow likely in the winter months, and the
northern (Ardennes) region is usually wetter and
colder than the south. Popular pursuits include
hiking, water sports, golf, cycling, and wine-tasting.
Due
to Luxembourg's high taxation of residents and
their wealth, however, this jurisdiction may not
be ideal for long term residence during retirement,
unless you have been swayed by the idea of wine-tasting,
and are really determined that this is where you
want to spend your latter years!
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
MAURITIUS
Language
- English, but French and Hindi also spoken
Currency -
Mauritian Rupee
Status -
Independent Commonwealth State
Population
- 1,250,882 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| A
flat tax of 15% from 2008 |
Pension
deductions : Employee pays 3% of earnings |
Between
20 and 30% depending on dates of purchase
and sale |
A
National Residential Property Tax applies per square metre to land
(MR0.10) and buildings (MR0.30). |
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| MR15
per sheet on documents connected with property and mortgage transactions |
VAT
at 15% |
Present
for more than 183 days in any tax year,
or 270 days in total over 3 years |
World-wide
income (although foreign income only if
remitted to Mauritius) |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Residence
Permit |
N/A
|
Yes
: Issued for 6 months to 3 years |
Prime
Minister's Office (In association with other
authorities) |
Mauritius
The
financial services sector in Mauritius is a fairly
recent development, and as such does not offer
the range of services to be found in some other
IOFCs. There have, in the recent past, been social
tensions in Mauritius, which led to violent demonstrations,
but there have been no further incidents of this
sort since May 1999. However, the jurisdiction
is well placed (between offshore India and Africa)
to continue developing further, and the government
has shown enthusiasm for e-commerce development,
which can only be a good thing.
For
individuals, Mauritius specialises at present
in offshore trust and company formation, and there
are a range of company structures available, including:
- Offshore
Company (now GBC Category 1)
-
International Company (now GBC Category 2)
-
Limited Life Offshore Company
-
General Partnership
-
Limited Partnership.
The domestic and offshore sectors of the Mauritian economy are quite
firmly separated, and domestic taxation is moderately high. However, Mauritius
was one of six offshore jurisdictions which signed 'commitment' letters
to the OECD in 2000. Partly as a result of this commitment, the Government
passed a range of replacement legislation in 2001 including the Financial
Services Development Act 2001, which set up a Financial Services Commission
to replace MOBAA. Most existing offshore legislation was 'grandfathered'
into the new regime.
There are no longer any exchange controls (they
were finally abolished completely in 1994), but
investors are still required to demonstrate the
source of funds to be repatriated, and must make
sure that they are completely up to date with
local taxes.
In
terms of banking, the Mauritian authorities have
been very cautious about offshore banking development,
and as a result, there are only ten Offshore Banking
Units (OBU) established. The licensing process
is rigorous, and the regulatory regime quite strict.
Nationals
of OECD member countries do not require a visa
to enter Mauritius, and are initially allowed
to stay up to six months. All other foreign nationals
will need a visa, which is free, but can take
up to a month to process.
The
Mauritius Financial Services Commission makes
recommendations for non-Mauritian citizens seeking
employment, and also deals with the issuance of
residence permits (although both are actually
granted by the Prime Minister's Office, in association
with the Ministry of Human Resource Development).
The two permits can usually be processed concurrently
by the FSC, and with the minimum level of disruption
to the expatriate, who just needs to provide them
with the application forms, and relevant documentation
(including a letter of sponsorship from the prospective
employer).
Tax
residence is assumed if an individual is present
for more than 183 days in any one tax year, or
270 days in total over 3 years, and if this is
the case, then they will be taxed on their world-wide
income, although only if the foreign income is
received in Mauritius. There are some tax breaks
available for employees of offshore operations,
but overall, not a great deal of distinction is
made. Non-Mauritian citizens are required to seek
permission from the Prime Minister's Office before
they can purchase property locally.
The
official language of Mauritius is English, although
French and Hindi are also widely spoken, and there
are several daily newspapers in circulation, the
majority of which are published in French. The
population is predominantly Hindu (51%), and there
are also Christian and Muslim communities established,
accounting for 31% and 17% of the population respectively.
There is very little seasonal variation in Mauritius,
with the weather generally warm all year round,
and water sports and golf are the most popular
pursuits.
Although
Mauritius might be considered eminently suitable
for the establishment of an offshore company or
trust, whether for the purposes of streamlined
financial management or asset protection, its
suitability as a retirement destination must be
questioned. High domestic taxation for residents,
and the very rigid distinction between offshore
and onshore in this jurisdiction could mean that
any advantages gained by basing your assets here
originally may be lost by residing here during
your retirement years.
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
MONACO
Language
-
French, Monegasque, Italian, and English
Currency -
Euro
Status - Constitutional Monarchy
Population
-32,671 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| N/A
except for French nationals |
Employee
pays 10-14% |
N/A
|
7.5%
stamp duty on registered value of real estate
sold |
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| 7.5%
on registered value of business sold, lower
for other types of transaction |
Inheritance
and gift tax : Except for spouses, parents
and children |
N/A |
French
nationals pay income tax |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Residence
Permit |
N/A |
Yes
: For non-French nationals |
|
Monaco
Monaco
has no desire to be considered as a 'tax haven',
and as such, the extent of offshore services offered
is limited; the jurisdiction is best known for
the range and quality of private banking services
offered to wealthy individuals, although the commercial
banking sector has undergone significant development
of recent years.
There
are some 70 banks and financial institutions established
in the principality, and it is interesting to
note that approximately 85% of those banks' clients
are non-resident in Monaco. The banking sector
has a secure legislative base, and is regulated
by the Bank of France - because of the close relationship
between the two countries, the legal basis of
banking in Monaco owes much to French banking
law. Banking secrecy in Monaco is adequate for
those with no French connection, but is otherwise
compromised by the close relationship of the two
systems.
There are no exchange controls, as the jurisdiction has a monetary union
with France. Only French nationals pay (French) income tax in Monaco,
but all employees in Monaco pay hefty social insurance contributions,
which can offset the advantageous income tax situation. There is no capital
gains tax.
Non-French nationals will need a residence permit and in order to acquire
this, the expatriate must present himself at the police station local
to his intended residence, with documents demonstrating sufficient income
to support himself and dependants during the intended period of residence.
The application will usually take 45 days to process, and is initially
valid for one year, and renewable at three-yearly periods thereafter.
Once residence has been constant for nine years, then a ten-year permit
can be applied for, after which citizenship is an option.
A
work permit is also necessary for non-French nationals
seeking employment, and the documentation required
for this includes a visa application, contract
of employment, and evidence of a fixed address
in Monaco. There is no quota system in place for
the issuing of work permits, and although they
are not hugely difficult to obtain, government
policy generally gives priority to French nationals
and citizens of Monaco.
As
previously mentioned, only French nationals are
liable for income tax (which is paid directly
to the French Government), and therefore, residence
for taxation purposes is not really an issue in
this jurisdiction. There are also no restrictions
on the purchase of real estate by foreign nationals.
For
business transactions, and in day to day life,
French, Italian, and English are most commonly
spoken, although there are groups that speak Monegasque.
There is one English language magazine available,
but there are a number of newspapers published
daily in French covering Monaco related news.
The majority of the population is Roman Catholic,
with small pockets of Anglicanism. Monaco is renowned
for water sports, and also of course for the casinos
which are established there.
Due
to the high social insurance contributions levied
on all Monaco-based employees, this jurisdiction
may not be the ideal location for you during your
working life as an expatriate. However, if you
have accumulated a substantial net worth, and
are looking for a pleasant location to spend your
retirement, provided you have no French connections,
Monaco may be just the place!
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
Netherlands
Antilles
Language
- Dutch, but Spanish, English, and Papiamento
also spoken
Currency -
Netherlands Antilles Florin
Status -
Part of the Kingdom of the Netherlands (but
full autonomy in internal affairs)
Population
- 223,652 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| Progressive
to 39% (Excluding Island surcharge) |
Employees
contribute 1.5% of taxable pay, employers
contribute 0.5% |
Capital
gains are normally taxed as regular income |
0.5%
p.a levied on unimproved property, 0.6%
on value of improved property. Annual occupancy
tax : 5% of rental value |
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
Buyers
of real estate pay a 4% transfer tax |
Inheritance
and Gift Taxes |
Permanent
home located there, habitual place of residence,
or centre of social and economic interest
|
World-wide
income |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Residence
Permit |
Varies
according to nationality |
Yes |
Governor's
Office |
Netherlands Antilles
Although
the Netherlands Antilles are composed of two groups
of islands, the majority of offshore business
takes place on Curacao, where the professional
and financial infrastructure is more highly developed.
The jurisdiction is particularly well equipped
to deal with the following offshore sectors:
-
Banking
-
Mutual Funds. (Netherlands Antilles NVs are
particularly suited to US professional investors,
as they have been accepted under the IRS 'check
the box' regulations and can effectively be
treated as limited partnerships for US tax purposes.)
-
Insurance
-
Financial holding companies
In
the banking sector, a distinction is made between
'Consolidated International Banks' (which are
usually branches or subsidiaries of the world's
top 1000 banks, and as such are sufficiently regulated
by their parent company), and 'Non-consolidated
International Banks' which are usually owned by
a non-financial institution, and are primarily
regulated by the Central Bank. Onshore banks and
offshore banks are also divided, and offshore
banks are only allowed to conduct external business.
In 2005 in the Netherlands Antilles, there were
about 11 onshore banks and about 40 offshore banks,
with assets amounting to about NaF80bn.
There
is no banking secrecy legislation as such, but
beneficial company ownership does not have to
be disclosed, and the islands have come under
increasing international pressure to legislate
against drug-related financial transactions, due
to their location, which has left them vulnerable
to this type of money laundering. Measures to
deal with this type of laundering have been instituted
with some degree of success.
The
taxation regime for residents is quite high, with
offshore taxation light, but not minimal. The
New Fiscal Framework, intended to improve the
jurisdiction's standing as an IOFC, has removed
the distinction between offshore and onshore companies,
simplified tax rates, and introduced a withholding
tax. In order to achieve exemption from exchange
controls, a license needs to be obtained from
the Central Bank, and in some cases, a licensing
fee of 1% is levied.
For
those without Dutch nationality, a residence permit
must be obtained, and the potential expatriate
must present his passport, a certificate of good
behaviour from the local police force in the previous
country of residence, evidence that he will be
able to support himself and any dependants (if
a work permit is not being applied for), and any
documents pertaining to family members expatriating
with him. In addition to this, a refundable deposit
(with the cost varying according to country of
origin) must also be paid.
The
job of applying for a work permit falls to the
prospective employer, who must be provided with
the following documents by the expatriate:
- Passport
copy
-
Photographs of the expatriate
-
Medical Certificate
-
Certification of good behaviour (as before)
The
potential employer must also prove that the position
was advertised locally, but that no one suitably
qualified was found to fill it.
Tax
residents of the Netherlands Antilles are liable
for tax on their world-wide income, and this type
of residence is assumed if any of the following
are true:
- The
individual has their permanent home on one of
the islands
-
It is their habitual place of actual residence
-
It is the centre of their economic or social
interest.
Since 1987 (with amendments in 1997) the Netherlands
Antilles offers a favourable personal tax regime
for retired people. The regime is available on
the following conditions:
- The
"penshonado" should be at least 50
years old on the date that he registers himself
as a resident;
- The
pensioner should not have lived in the Netherlands
Antilles in the five years before making the
application for 'penshanado' status;
-
The pensioner must own a house in the Netherlands
Antilles with a value of at least USD253,000
for his personal use and available to him within
18 months after his registration as a resident;
-
The application for favourable tax treatment
must be filed within two months after registration
as a resident;
- The
"penshonado" has to provide employment
to at least one employee for not less than 30
hours per week.
A "penshonado" may choose between two
tax regimes:
- Worldwide
income, not derived from business or employment
within the Netherlands Antilles, including pension-rights
of which at least 70% are externally funded,
will be subject to a 10% Antilles income tax
rate. Capital gains on portfolio investments
are not considered taxable income under Netherlands
Antilles tax law. Netherlands Antilles source
income will be subject at the ordinary Netherlands
Antilles personal income tax rates (with a maximum
of 39% on taxable income exceeding NAF 109,000;
or
- All
foreign income will be fixed at USD281,000 and
taxed at the normal progressive rates, which
amounts to an effective tax of US$152.000.
Foreign
income is considered to be all income from a foreign
source, including non-resident (so called "offshore")
companies established in the Netherlands Antilles,
all income from savings at local banks; and the
rental-value of the house owned by the penshonado.
"Local" income is all income that the
penshonado receives from employment in a company
established in the Netherlands Antilles in which
he owns 40% or more of the capital stock and/or
income obtained as a director or officer of a
company and/or income received from bonds issued
by a local company. Local income is taxed at the
normal tax-rate for local citizens. The penshonado
may not enter into employment with a company in
which he does not own at least 40% of the capital-stock.
The
language most often used for business and day
to day purposes is Dutch, although English, Spanish
and Papiamento are also spoken, and most of the
islands publish at least one daily newspaper,
with the exception of Saint Eustatius. Saint Maarten
is predominantly Protestant, but the rest of the
islands have larger Roman Catholic communities.
The
standard of leisure pursuits available varies
widely across the islands, although the climate
for all is dry and sunny, and water sports, cycling
and gambling appear to be a constant.
The islands making up the Netherlands Antilles are currently undergoing
fundamental constitutional change. Following a series of referenda between
2000 and 2005, a Round Table Conference held between the governments of
the Netherlands, Aruba and the islands of the Netherlands Antilles agreed
that Curacao and St Maarten would become autonomous territories, while
the BES islands of Bonaire, St. Eustatius and Saba would have a new status,
but remain linked to the Netherlands. The agreement will dissolve the
Netherlands Antilles in 2010.
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
SEYCHELLES
Language
- English, French, and French based Creole
Currency - Seychelles Rupee
Status - Independent Republic and
member of the Commonwealth
Population
- 81,895 |
INCOME
TAX |
SOCIAL
TAXES |
CAPITAL
GAINS TAX |
PROPERTY
TAX |
| N/A
|
Employee
pays 2.5% of salary, employer pays on sliding scale between 35-40%
of salary |
N/A
|
N/A
|
| STAMP
DUTY |
OTHER
TAXES |
TAX
RESIDENCE QUALIFICATION |
BASIS
OF RESIDENT TAXATION |
| N/A
|
N/A
|
Present
for more than 180 days |
Territorial
Basis |
| LEGAL
BASIS OF RESIDENCE |
COST
OF RESIDENCE DOCUMENT |
WORK
PERMIT REQUIRED? |
WORK
PERMIT AUTHORITY |
| Gainful
Occupation Permit |
Gainful
Occupation Permit costs USD360 per year |
Yes
: GOP |
Seychelles
Government |
Seychelles
The
offshore financial sector of the Seychelles economy
has been fostered and encouraged by the government
over the last twenty years, and as a result, has
been steadily developing, with recent, well formed
legislation now in place for:
- International
Business Companies
-
Offshore Banks
-
Insurance Companies
-
Trusts
In
addition, enabling legislation for mutual funds
was put in place by the Seychelles government
in 1997.
The
financial sector is regulated by the Offshore
Banking Department of the Central Bank, and at
present there are five licensed foreign banks,
and two domestic banks established in the Seychelles.
This
jurisdiction operates a territorial taxation system,
meaning that only income arising there is taxed,
and although there are import duties to be paid,
these have been reduced substantially in recent
years, which combined with the large number of
investment incentives for incoming investors,
means that the Seychelles are an attractive option.
There are no exchange controls.
In
order to obtain residence in the Seychelles, an
individual must either be able to demonstrate
sufficient resources to support themselves and
their dependants, or must obtain a Gainful Occupation
Permit (GOP) from the government. A GOP must be
applied for by the prospective employer, and although
it acts as permission for both residence and employment,
there is an annual charge per person. A reduced
rate is sometimes available for investors approved
under the Investment Promotion Act, but there
is usually quite a low limit on how many foreign
nationals can be employed by any one company.
Residence
for taxation purposes is not really an issue in
the Seychelles, because as previously mentioned,
there is no income tax as such, and taxation is
levied on a territorial basis.
French,
English and Creole are the most commonly spoken
languages on the islands, which are predominantly
Roman Catholic, and there are daily, weekly, and
monthly English language newspapers available.
The climate is tropical, with monsoon rains generally
falling between November and February. Despite
this, outdoor pursuits such as diving, snorkelling
and fishing prove popular with locals and expats
alike.
Due
to the aforementioned territorial taxation system,
expatriates wishing to live in the Seychelles
after retirement would be well advised to consider
locating pensions and other investment elsewhere
prior to taking up residence, as investment income
not located in or arising from the jurisdiction
will receive more favourable treatment.
For a more detailed treatment of the tax and legal regimes in this and
40 other offshore jurisdictions, please visit the Lowtax
Jurisdictions Guide.
|