9.3. Tax Havens

A tax haven is a country that offers foreign individuals and businesses low or zero tax rate, politically and economically stable environment, and with little or no financial information sharing with foreign tax authorities. Such countries include Andorra, Cayman Islands, British Virgin Island, etc.

Tax havens do not require individuals to reside in or businesses to operate out of their countries. Due to the globalization of business operations, an increasing number of Multi- National Companies (MNCs), are keeping cash in offshore tax havens to minimize corporate taxes.