You might have heard of tax haven, but what exactly is tax haven?

Basically, Tax Haven is an offshore country with static political and economic environment. It can offer foreigners or foreign businesses with very low “effective” tax rates. The financial information is confidential in a tax haven.

Typically, tax havens don”t require residency for individuals or business presence to benefit from tax laws, whch makes things easier for foreigners.

Most famous tax havens worldwide include Andorra, British Virgin Islands, HongKong and etc.

In the US, there are also some states can be called as tax haven since they have fairly low tax rates. For example, Alaska, Florida, South Dakota, Texas…

It’s a win-win solution. Both foeign investors and the tax haven can benefit from low tax rates. For foreign investors who want to start up a new business, they can save a lot of money by paying less taxes. For the offshore tax havens, new companies will promote their economy by the huge influx of foreign capitals. In other words, a tax haven brings foreign investment, and the foreign investment stimulates local economy.

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