Bermuda

Forbes names Bermuda one of world's top 10 tax havens


By added on 09/07/2010

Bermuda has been listed as one of the Top 10 tax havens and places to hide money in a report by Forbes.com

The Royal Gazette reports that the online publication described the Island as the "favourite location" for US corporate inversions or companies that relocate their headquarters to a tax haven while retaining their material operations in higher-tax America, and any offshore insurance company.

But the listing also features the UK and US as top tax havens - often the first places to point the finger of blame at the likes of Bermuda when it comes to evading taxes.

The report, which is based on work with the Tax Justice Network, focused on two factors - secrecy (through the creation of regulation designed to undermine the legislation or regulation of another jurisdiction as well as a deliberate, legally-backed veil of secrecy that shields the identities of those making use of its flexible regulatory system) and the capability to move money in serious quantities.

These two characteristics, when combined, created an index of secrecy jurisdictions, or tax havens, according to Forbes.com, called the Financial Secrecy Index.

Determining the amount of cash flowing through each jurisdiction using International Monetary Fund data, the top 10 included the UK (City of London), the US (Delaware), Luxembourg, Switzerland, Cayman Islands, Ireland, Hong Kong, Singapore, Belgium and Bermuda.

When combined, the two rankings give the 10 most significant secrecy jurisdictions in the world, in the opinion of the Tax Justice Network: the US (Delaware), Luxembourg, Switzerland, Cayman Islands, the UK (City of London), Ireland, Bermuda, Singapore, Belgium and Hong Kong.

"That final list is going to surprise, shock or even annoy a lot of people, but there is good reason for listing places like London and Delaware as tax havens among those which might be considered the more usual suspects," said the report.

"Secrecy is not something, as many like to think, that happens 'over there'. It is really happening at home too. Delaware provides a degree of corporate secrecy for those who operate there that makes it highly significant. Incidentally Nevada and other states also offer this feature, but because more companies use Delaware, it stood out from the crowd.

"London richly deserves its place on the list too. It's not just because many of the more 'usual suspect'' jurisdictions - everywhere from Jersey to the Cayman Islands -are all beneficiaries of British protection and support. The truth is that each of these operates as a branch office for the City of London, the square mile that is the epicentre of finance in London."