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MadMarketScientist

Tax Haven Definition

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Returns on every investment are subject to taxation. In order to attract a reasonable level of foreign investment, some countries and territories offer very low levels of taxation as an incentive to attract such investment, while at the same time, offering other conditions to keep such investment such as good corporate governance. Tax havens also have secrecy laws which prevent financial institutions from disclosing details of the monies held in their coffers by foreign individuals and corporations. This has led to several points of conflict between tax havens and the countries which depend on tax revenue of its citizens for income (e.g. the US). An example of a tax haven is the Cayman Islands.

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