What is a tax haven?
A "tax haven" is neither a legal nor scientific term. Countries, which offer substantial tax benefits to businesses, are generally referred to as tax havens. In this respect, the notion of tax haven is, of course, a relative one. As compared to a 35% income tax in one country, a neighbouring country with 12% tax would very much qualify as a tax haven - and still fare less than a country with zero taxation on income.
In the traditional sense, a tax haven is a country where one can register a business which will remain completely tax-free in that country (except for certain government fees), as long as it does not operate inside its own country. Some tax haven jurisdictions have gone even further, by abolishing business and income taxation for all businesses, both domestic and offshore.
A proper tax haven jurisdiction would normally have a whole complete network of regulations, laws and precedents aimed at the attraction of international business to register there. Such attractions may not only include zero taxation on business, but may also feature extremely fast and efficient business incorporation procedures, minimum mandatory reporting, strict secrecy provisions in the financial and corporate sector, a developed financial system and no information-sharing agreements with foreign governments.
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Republic of Seychelles
