As one tax haven closes, another opens
As popular tax havens for the rich and famous continue to fall out of favour under the glare of the international spotlight, investors seeking privacy have begun to scatter to other far-flung parts of the world to hide their money.
The United States, Canada and the European Union are starting to laser in on how to stop citizens and corporations from moving their millions off-shore to avoid tax bills. The G8 meeting of world leaders in June committed to tightening the rules around tax havens and this week's G20 in Russia is expected to do the same.
But some countries just can't stop themselves from the lure of easy money, notes the International Consortium of Investigative Journalists. The ICIJ made global headlines in April when it reported on what it had discovered in 2.5 million documents detailing the activities of tens of thousands of people and corporations who have an estimated $32 trillion in offshore accounts.
This was cloak and dagger journalism at its best and news organizations around the world are combing through nearly 260 gigabytes of emails, documents, corporate files and account ledgers that were obtained by the ICIJ’s director Gerard Ryle on a hard drive, concealed in a brown envelope.
In Canada, the ICIJ worked with the CBC and uncovered a list of 450 Canadians who have stashed millions off-shore. That list has still not been released publicly.
So, where are the wealthy now stashing their cash now that big players such as the British Virgin Islands are being shamed into reforming their ways? The ICIJ has come up with a list of a few countries they say are tax havens to watch. They include:
Gambia, a small African nation with an economy mostly dependent on peanuts and tourism. The Economist notes they have set up an on-line corporate registry that makes it easy for companies to cheaply incorporate.
The ICIJ notes Latvia is becoming a favourite for Russian and Eastern European investors. The newest state to enter the euro zone of single currency nations is very welcoming to foreign investors and it has low corporate tax rates.
In an effort to boost economic growth, Australia's Northern Territory may soon become a special economic zone with a cut-rate corporate tax offering that is well below the rest of the country, the ICIJ notes.
Investors, start your engines.
Tanya Talaga is the Star's global economics reporter. Follow her on Twitter @tanyatalaga