Tax & Money Havens

Belarus a Tax Haven for the Digital Economy

Nick — Wed, 17 Jan 2018 15:35:07 +0000

Belarus has legalized transactions in crypto-currencies, part of a drive to foster private sector growth and attract foreign investment by liberalizing its Soviet-style economy.

The Belarus government will not tax mining, trading of cryptocurrencies, and sale of digital tokens. Activities related to mining, creation, acquisition and sale of digital tokens will remain tax-free until 2023, throughout the next five years. The decree legalizes initial coin offerings and transactions in crypto-currencies, including their exchange for traditional currencies on Belarussian exchanges, while all trades will be tax-free for the next five years.

It also allows local IT companies to operate in part under English law – a gesture to foreign investors, who can struggle to navigate the Belarussian legal system.

The Belarussian IT sector has flourished, attracting foreign workers, expatriate Belarussians and locals to jobs that pay about five times the average wage. Dozens of software companies operate in Minsk’s high-tech IT park (HTP), including U.S.-based EPAM Systems (EPAM.N), founded by two Belarussians in 1993. Belarussian software engineers are also behind the Japanese-controlled Viber messenger and the popular video game World of Tanks.

New Conditions for IT companies

1. The validity period for HTP’s special legal status will be extended until January 2049. The following companies, which specialise in software development or other IT businesses, can become HTP residents:

Design, development, support, sale, maintenance of software and (or) firmware based on or using the Blockchain, and distributed databases,
Creation, training of neural networks and other algorithms in the specialised sections of Artificial Intelligence, and implementation of the results of this activity,
Development, support, maintenance and production of unmanned vehicle driving systems,
Development or separate development stages of medical technologies, biotechnologies as well as the implementation of the results of these developments,
Business processes outsourcing activity,
Software publishing and promotion,
Mining, cryptocurrencies exchange activity, cryptocurrency converter activity, other activity using tokens,
Cybersport activity. The list is not exhaustive. The HTP supervisory board is authorised to establish other kinds of activity that a company can specialise in to become a HTP resident.

2. Within the framework of the special HTP legal status, the existing tax and NSSF (National Social Security Fund) benefits are preserved and new ones introduced. Among the existing HTP residents’ benefits, the major ones are as follows:

Exemption from income tax and VAT (pursuant to the general rule). Instead, HTP residents pay 1% of gross revenues in favour of the HTP administration,
Individual income tax is paid at a lower rate (9%), and NSSF fees are calculated according to the average country wages, instead of actual wages (3-4 times lower). Additional benefits, aiming to stimulate Product Development IT companies, are the following:
Exemption from VAT, based on the use of foreign entities to provide marketing, advertising, consulting and some other services to HTP residents,
Zeroing of foreign entities’ income tax rate, with respect to the income from carve-out of stocks, shares in authorised capital, participatory interest in HTP residents’ property (provided that they continuously possess it for not less than 365 days), as well as royalties, earnings from advertising services and other kinds of income, paid by HTP residents.

3. HTP residents’ activities shall be simplified. Residents shall have a right:

To conduct operations with e-money without a range of limitations,
To open accounts in foreign banks and other credit and financial institutions, to receive money into these accounts without the permission of the National Bank,
Capital can be moved through currency transactions if conducted after notifying the National Bank and with their permission,
To execute primary accounting documents personally, when performing business transactions with non-residents of the Republic of Belarus.

Regulations regarding the procedure for the conduct and control of foreign trade transactions do not apply to transactions made by HTP residents.

4. Investment according to English Law will be allowed. HTP residents are allowed to sign agreements with third parties that are actively implemented in international business. For example:

Agreement on granting right of first refusal to execute contracts,
Convertible loan agreements,
Property loss indemnity agreements,
Agreements, stipulating liability for labour pirating,
Non-compete agreements with employees with payment of compensation for the period of noncompete obligations,
To issue irrevocable power of attorney.

5. The set of measures, focused on attracting top-ranked IT-specialists, is finalised.

HTP residents do not have to get the permissions related to the employment of foreigners. Foreign employees will receive a temporary residence permit under the simplified procedure,
Visas for foreign employees and founders of the HTP residents are cancelled. The maximum time limit of their temporary stay is increased up to 180 days.

Belarus will create an unprecedented ecosystem for the regulation of the circulation of cryptocurrencies and tokens. Major provisions:

The rights of physical and legal entities in terms of token circulation are defined. Legal entities are entitled to possess tokens, create and list their own tokens through HTP residents; buy, exchange tokens and perform other operations using tokens only through the cryptocurrency exchanges and cryptocurrency exchange operators.
Individuals are entitled to possess tokens; perform mining; exchange tokens, buy and sell them for Belarusian rubles, foreign currency, e-money, as well as present and bequeath tokens. The mining activity of individuals, tokens purchasing and sale shall not be considered entrepreneurial activity.
Tokens and revenues from operations with them shall not be subject to declaration by the individuals.
Turnovers, profits (income, proceeds) from various operations with tokens are not recognised as taxable items until January 2023.

Montenegro – a Tax Haven in Europe

Nick — Wed, 04 May 2016 18:21:41 +0000

Montenegro, known as ‘The Jewel of the Adriatic’ has become one of the most friendly places for business in Europe. It is now a decade ago since the semi-autonomous region of Montenegro, declared its independence and went on to become a sovereign state.

Much of Montenegro’s allure comes from its shining mix of colors: aquamarine waters, green pine-forested mountains, blazing blue skies and white pebble beaches.

Montenegro was featured in the glamorous James Bond film “Casino Royale.”

Sveti Stefan near the town of Budva in Montenegro. Image courtesy of Travel the World, Wiki Commons.

Porto Montenegro – sometimes called the Monte Carlo of the Adriatic – has upgraded this tiny Balkan state from a favorite destination of average Russian and Serbian tourists to a mecca for some of the world’s wealthiest people.

However, Montenegro has also attracted a lot of attention for another reason: it is one of the easiest places to do business in Europe. Starting a company in Montenegro takes a little more than a week and requires no paid-up capital. To form a Montenegro corporation, you must follow six procedures, most of which are simple. The only documents you have to submit to the government are the articles of incorporation, corporate statutes, and list of directors.

There is no such thing as anonymous ownership of a company in Montenegro, as you have to disclose your name, any former names, and your citizenship. However, if you’re looking for a solid company to do regional business, Montenegro is hard to beat. Being a director of company could even qualify you for Montenegrin residency with a little bit of cash.

There are several other steps to form a company here, but the total cost to be paid locally in Montenegro is one of the most affordable set ups for a corporation.

Montenegro offers global entrepreneurs a low-tax haven where they can pay a little tax and gain access to a network of treaties.

While countries like Monaco have become less attractive as holding vehicles for patents or royalties, a Montenegrin corporation is suitable for a number of business activities.

In addition, Montenegro has some of the lowest tax rates in Europe and even the world. Corporate taxes in Montenegro are a flat 9%. While royalties and capital gains are also subject to the 9% rate, there are no surtaxes or minimum taxes for companies doing business in Montenegro. There are also no stamp duties, although real property is subject to a 3% tax payable by the buyer at transfer.

Resident individuals in the country pay a maximum 15% tax on salary earnings (9% to about $1,000 per month, 15% on the balance).

Montenegro also offers relief from taxes on foreign source income under an extensive network of tax treaties, although the United Kingdom and most countries in Europe dominate the list, along with China, Korea, India, and Malaysia, and some African countries. The United States, Canada, and Australia are not on the list.

Montenegro Airlines flies to the capital of Podgorica and to the Adriatic Sea airport of Tivat from European cities including Paris, Rome, Budapest, Zurich, Moscow, Frankfurt, Istanbul and Ljubljana. JAT Airways, the Serbian national airline, flies to Belgrade from most European capitals, and has several flights a day from Belgrade to Podgorica and Tivat. A return ticket for a 45-minute flight from Belgrade costs USD 125.

taxmoneyhavens.com

China launched international banking network

Nick — Wed, 21 Oct 2015 20:42:35 +0000

The US domination of the global banking system coming to an end ?

International payments for trade are typically routed through the US banking system in New York, and settled in US dollars.

China launch CIPS (China International Payments System).

Image Chinese Yuan courtesy of Prison Planet, Wiki Commons

A few years ago China started working on an alternate competing system whereby international payments no longer needed to clear through the US. It’s called the China International Payments System (or CIPS) and it was launched early October 2015

So far CIPS is just been being provisionally tested; 11 out of 19 banks using it are Chinese and state-owned. But many banks, particularly in Europe, have already agreed to join the network.

If successful, CIPS could take a substantial market share from the US banking system, giving foreign banks and governments less and less reason to hold US dollars and US government debt.

taxmoneyhavens.com

Macau Offshore Haven

Nick — Thu, 24 Sep 2015 17:13:16 +0000

Macau is a former Portuguese colony and was administered by Portugal from the mid-16^th century until late 1999 when it was ceded to China. Macau became the second Special Administrative Region after Hong Kong.

In 2002, the government of Macau enacted a law from 2001 which legalized gambling, and offline casinos opened up. Macau’s Internet gambling sector was regulated in 2003.

Today, Macau is the gambling center of Asia. Its offshore financial sector is growing but still is nowhere near the size of Hong Kong.

Macau by night courtesy of Inamoka, Wiki Commons.

Macau Incorporation
Macau has many different types of corporate structures available, allowing for a wide range of liability.

Unlimited Liability Company (S.N.C.)
Mixed Liability Company by Quotas (S.C.)
Mixed Liability Company by Shares (S.C.A.)
Limited Liability Company by Quotas (L.D.A.)
Limited Liability Company by Shares (S.A.)
Limited Liability Company by Sole Owner (S.U.L.)

Macau companies are exempt from tax on the first 200,000 MOP (Macau pataca), or roughly $25,000 USD, and the next 100,000 MOP is taxed at 9%. Remaining income is taxed at 12%.

Unlike Hong Kong, there’s no territorial taxation system in Macau. Worldwide income may be subject to tax. However, under the Offshore Regime of Macau, companies can be fully tax exempt if they do not operate in MOP currency, do not target Macanese persons, and do not focus on other Macanese companies.

Unlike Hong Kong, where you pay tax depending on the source of income, Macau has taken a different approach of either full tax exemption or full tax liability.

There is no sales tax (VAT) in Macau.

The Offshore Regime creates two types of offshore operations: Offshore Commercial Service Companies and Offshore Auxiliary Services Companies. Both are designated International Business Companies (IBC), but are significantly different from the IBC legislation of Belize, Seychelles, and so on.

The differences between Offshore Commercial Service Companies and Offshore Auxiliary Services Companies lie within their scope of operations. While auxiliary services companies can only perform duties for holding or parent companies, commercial service companies are free to conduct business with anyone. Auxiliary companies pay a lower annual fee—between 4,000 and 10,000 MOP less per year.

All companies in Macau—even those registered under the Offshore Regime—must prepare and file financials. The costs of forming a regular or offshore company in Macau are higher than in Hong Kong, but not by much.

Residents are liable for income tax on salary from employment with Macanese companies or salaries paid into Macau, which means that if you work remotely for a foreign company, you pay no tax. This can be used to live and work tax-free in Macau.

There is no capital gains tax, capital duty, capital acquisitions tax, inheritance tax, wealth, or sales tax.

taxmoneyhavens.com

Safe Deposit Box for Wealth Storage ?

Nick — Wed, 12 Aug 2015 18:37:52 +0000

In late June 2015 the Deputy Finance Minister of Greece Nadia Valavani revealed to Greek television that the government and banks had agreed that people would not be allowed to withdraw cash from safe deposit boxes for as long as the capital controls were in place.

Earlier this year, on 1 April 2015, Chase bank in the US advised clients who rent safe deposit boxes from them that there would be some changes in their policies, by giving them this message,

Notice the the following condition: “Contents of box: You agree not to store any cash or coins other than those found to have a collectible value.”

Picture Courtesy “Safe 01” by Корзун Андрей, Wikimedia Commons.

The banks are convincing people to put their wealth into cash, and their cash into banks in the form of deposits. They’re being assisted by many of the world’s governments, which are increasing the level of legislation that controls what individuals are allowed to do with their own wealth.

After this is completed, the bank customers are “sitting ducks’ for confiscations of their cash holdings. These will of course be implemented by the banks, and in order to maximize the amount that will be taken, it will be necessary to force people out of other forms of wealth storage and into bank deposits.

And even in a confiscation situation, banks would be reluctant to raid safe deposit boxes, as they would a) have to force them open, and b) have to deal in some way with the non-monetary contents of the boxes, such as documentation and fine art. To do so would glaringly expose the banks as plunderers (assuming the theft of deposits had not already achieved that end).

In the future, we can expect to see more steps taken by banks and governments to squeeze people out of other forms of wealth storage like precious metal, fine art, jewelry, etc. and to deposit the wealth as cash in the banks.

The EU, US, Canada, and several other jurisdictions have passed bail-in legislation the last few years, opening the possibility for confiscating the cash deposits of bank customers, if they deem this necessary.

Believe it or not, you just wake up one morning, and your cash deposits have been raided.

taxmoneyhavens.com

Countries where you easily can buy arms

Nick — Tue, 02 Jun 2015 19:15:05 +0000

In addition to The United States, here are four other countries where you can own arms:

Switzerland
The Swiss are not only allowed to have guns, but many citizens were traditionally required to own one and go through training on how to use it. Switzerland’s laws require having a permit in order to be able to buy certain firearms, and these are attainable relatively easy.

Swiss flag image courtesy of Wiki Commons

Czech Republic
Czech Republic is another place in Europe where you relatively easy can get a permit for gun ownership, also for most foreigners who live there.

There’s no limit to how many firearms you can own and you can carry a concealed firearm.

Estonia
Private possession of a large variety of guns is allowed for Estonian residents under a license. These can be obtained for any number of reasons, including self-defense.

The government maintains a record of individual civilians licensed to possess firearms and ammunition, but private sale and transfer is allowed, as is concealed carry.

Paraguay
Most types of firearms can be legally purchased in Paraguay, but a license is required and a central registry of gun ownership is maintained.

Even as a tourist you can legally buy weapons in Paraguay.

taxmoneyhavens.com

Curaçao a Tax Haven for Internet Based Business

Nick — Wed, 22 Apr 2015 17:54:01 +0000

The financial services industry on Curaçao was started by the Dutch during the 1940’s when Dutch corporations moved their assets to the region to escape the Nazis.

After the war many of the companies returned their head quarter back to the Netherlands but left behind the infrastructure of an offshore center.

The infrastructure includes 70 banks, more than 50 of them international, as well as asset management, trust and insurance companies. The worlds major global audit and law firms are also established on the island.

Picture of Curaçao courtesy of Wiki Commons

The Caribbean island of Curaçao realized that competition for business is stiff. So they had to keep the tax rate extremely low and attractive and add value to business. Being a tax free jurisdiction almost guarantees that you’ll end up on some OECD or IRS blacklist.

So the tax rate on corporate profits was set to 2% only, something that wouldn’t qualify them as a tax haven, but would be low enough to attract entrepreneurs. In addition, Curaçao also looked at ways it could actually provide value to 21st century businesses.

The Internet businesses they hoped to attract all need bandwidth. So Curaçao invested in fiber to the point that its data centers now have among the fastest, most highly connected data centers in the region.

So instead of just being a Curaçao company in name only, businesses can actually host their servers here as well. This helps any Internet business justify why the company is based in Curaçao.

Advantages of being based in Curaçao:
– Not being listed as a tax haven.
– Offering robust local services incl. state of the art internet which support the business.
– International financial center
– A blend of European and Caribbean Culture

The Kingdom of the Netherlands is a member of the European Union. However, Curaçao, Aruba and Sint Maarten all have the status of Dutch overseas countries and territories and are not part of the EU.

taxmoneyhavens.com

The U.K. to join he Chinese-led Asian Infrastructure Investment Bank as a founding member and CIPS the alt. to SWIFT ?

Nick — Tue, 17 Mar 2015 13:49:19 +0000

The government of the United Kingdom just announced that they would be applying to join the Chinese-led Asian Infrastructure Investment Bank as a founding member.

The United States currently dominates the global financial system. But after years of sanctions, wars, debt, money printing and regulations, the rest of the world are looking for an alternative.

The soon-to-be-live Chinese International Payment System (CIPS) will provide a way for banks to transfer funds to one another without having to use the US banking system or the US dollar.

Shanghai by night courtesy of Wiki Commons

China is also the initiator behind both the BRICS development bank (called the New Development Bank, or NDB) as well as the Asia Infrastructure Investment Bank (AIIB). Both of these are multilateral development banks that aim to end the dominance of the western-controlled World Bank and IMF.

NDB includes all the BRICS nations– Brazil, Russia, India, China, and South Africa.

Founding members of the AIIB include China, India, Indonesia, Kazakhstan, Mongolia, etc. They’re typically all rapidly growing and/or resource-rich developing nations.

New Zealand was the first western nation to join AIIB in October 2014, and Britain has just announced its intention to become the second.

The signatories to the NDB and AIIB charter documents want to create an alternative to the United States dominance of the global financial system by launching these new development banks and an alternative payment system together.

taxmoneyhavens.com

Tax Haven Zone in Armenia Launched

Nick — Thu, 26 Feb 2015 17:14:35 +0000

Armenia launched last year, the first-ever tax-free business zone which is meant to mainly cater to high-tech manufacturing companies.

The tax-free zone covering around 10 hectares (25 acres) of land and office space is designed for companies specializing in information technology, engineering, telecommunications, renewable energy and pharmaceuticals.

Companies based in the zone will be exempt from profit, value-added and property taxes as well as import duties.

Regional Map with Armenia courtesy of Wiki Commons

taxmoneyhavens.com

Russia launch competitor to SWIFT

Nick — Thu, 29 Jan 2015 16:37:27 +0000

Putin ordered the launch of the “Double Eagle project” because the US blocked a payment from the Russian embassy in Astana, Kazakhstan in March 2014.

The payment was directed to SOGAZ Insurance Group through SWIFT. This made Putin furious and he initiated the Double Eagle Project, an international money transferring system named after the Russian Double Eagle gold coin.

Moscow by night courtesy of Wikipedia

SWIFT

SWIFT (Society for Worldwide Interbank Financial Telecommunication) system is the global banking system’s postal system. SWIFT has more than 10,000 members in more than 200 countries, and handles more than 15 million messages daily.

SWIFT is based in Belgium, and subject to EU law. However, the U.S. government claims legal authority over all SWIFT transactions denominated in U.S dollars, even if those dollars never enter a U.S. bank account.

So when European banks used SWIFT to facilitate dollar dominated transactions between Iran and third parties, the U.S. fined those banks billions of dollars for violating U.S. sanctions, even though no money passed through the United States.

Russia launch competing money transfer system

When the United Kingdom, called for Russian banks to be ejected from SWIFT during the height of the Ukraine crisis, the Russian bear was alerted.

Late 2014, Russia announced that they will launch an alternative to SWIFT by May 2015. The new international money transfering system would nominate transactions in roubles, with conversion to and from U.S. dollars at either end.

The liberation of fiat money movements.

A Russian international money transfer system would be an alternative global economic and financial system beyond U.S. rules and Western sanctions.

Russia has joined the New Development Bank, an alternative to the International Monetary Fund and the World Bank. The participating countries, Russia, South Africa, China, India and Brazil, comprise more than 3 billion people, 41.4% of the world’s population, and account for more than 25% of global GDP.

China Merchants Bank now issues the world’s #2 credit card.

Russia and China have both built up their gold reserves.

A new trans-Atlantic cable to allow independent worldwide communications is under development.

Importers, exporters, and investors who are citizens of the EU and US are also likely to make use of the Double Eagle system , instead of SWIFT, when it suits them.

taxmoneyhavens.com