Illustration by Neal Fox for Bloomberg Businessweek

Which Tax Haven Is Right for You?

  1. Gimme Shelter

    Gimme Shelter

    Once confined to a few tropical islands riddled with yachts and flashy drug dealers, the tax haven market has morphed into a sprawling tableau of low-tax zones that cater to wealthy individuals and multinationals. For the uninitiated, an abbreviated catalog of haven types.

    Illustration by Neal Fox for Bloomberg Businessweek
  2. Delaware


    YOU ARE: an American CEO

    Yes, you’re in ... Delaware. It’s in a stable, democratic country (well, mostly), and it exempts subsidiaries of holding companies from taxes, which is why more than half the Fortune 500—on paper—are there. They include Google (GOOG), Ford (F), and Berkshire Hathaway (BRK/A), whose CEO, Warren Buffett, believes rich people don’t pay enough taxes. “Some tax havens have always been low-tax jurisdictions,” Cato Institute’s Daniel Mitchell says. “And then you have countries like the U.S., which are tax havens but no one knows about it.”

    Illustrations by Neal Fox for Bloomberg Businessweek
  3. Cayman Islands

    Cayman Islands

    YOU ARE: a Republican

    While tax havens are not popular with most Americans—the Foreign Account Tax Compliance Act, which took effect this year, forces foreign banks to disclose the names and balances of American account holders—they seem to have a special allure among senior Republicans. Mitt Romney moved millions to the islands (the better to shield it from lawsuits) and George W. Bush recently gave the keynote at an investment conference there.

    Illustrations by Neal Fox for Bloomberg Businessweek
  4. Belize


    YOU ARE: in the midst of a nasty divorce

    Like the British Virgin Islands, the Seychelles, the Caymans, and Panama, Belize is where the holding companies that own the holding companies that own the real companies are. Belize offers an unparalleled level of secrecy., a website that provides information about tax havens, calls the Belize trust “the only structure we know of that does not allow for fraudulent conveyance actions.” Translation: People running away from a divorce settlement or any civil judgment from a foreign court need not worry.

    Illustrations by Neal Fox for Bloomberg Businessweek
  5. Norway


    YOU ARE: a Viking sports star

    Among tax haven opponents there’s a vaguely Freudian belief that all of us are, deep down, tax evaders. So it was that Roger Schjerva, the state secretary of Norway’s ministry of finance, recently called his country a tax haven, noting it was easier to get information about bank accounts in a Pacific island than in Oslo. The Netherlands is also in this category; the so-called Dutch Sandwich has enabled thousands, including Mick Jagger and Steffi Graf, to avoid taxes.

    Illustrations by Neal Fox for Bloomberg Businessweek
  6. Jersey


    YOU ARE: a British tabloid fixture

    The island of Jersey, off the French coast, is littered with seaside inns and medieval castles. It’s also where rich people from Britain often stow their cash. The island taxes income at a flat rate of 20 percent. Alas, Jersey’s fate is uncertain. It belongs to the Channel Islands, which is a dependency of the British crown. Prime Minister David Cameron, whose father made a small fortune in tax havens, has attacked celebrities who avoid paying taxes.

    Illustrations by Neal Fox for Bloomberg Businessweek
  7. Cyprus


    YOU ARE: a “classy” Russian businessman

    Since the collapse of the Soviet Union, Cyprus has been the go-to haven for oligarchs looking to shield their money from the Kremlin ... or other oligarchs. As of Jan. 1, it was no longer on the Russian government’s tax haven blacklist, lending the Mediterranean island some respectability. “Cyprus isn’t a classic tax haven like Panama or BVI. There’s still a minimum level of taxation,” says Carlo Scevola, a tax attorney in Cyprus. “It’s a very high-standing jurisdiction which can be compared to the U.K., Latvia, or Bulgaria.”

    Illustrations by Neal Fox for Bloomberg Businessweek
  8. Luxembourg


    YOU ARE: a chic old-money scion

    Luxembourg thinks of itself as a place where successful, well-dressed people invest in sophisticated funds. Diogo Duarte de Oliveira, partner at the Luxembourg office of law firm CMS DeBacker, says clients “want a jurisdiction that offers very skilled people, and this is not what you will find in Cyprus.” (Burn.) The specialized investment fund is popular. “You have this fund being used by private equity outfits or for passion investments such as art or diamonds.”

    Illustrations by Neal Fox for Bloomberg Businessweek
  9. Dubai


    YOU ARE: an embarrassment

    Dubai is overrun with the most garish people on earth; mullets, Lamborghinis, and Ukrainian prostitutes are ubiquitous. In 2009 the city-state’s neighbor, Abu Dhabi, paid off Dubai’s debts with a $10 billion handout. Since then the real estate market has rebounded, and hordes of Iranian and Indian financiers, among others, are flocking there. Luxury villa prices are expected to rise 10 percent in 2013, according to property consultancy group Knight Frank.

    Illustrations by Neal Fox for Bloomberg Businessweek