The Advantages of a Tax Haven Company

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tax havenMany countries in the world have adopted the benefits of providing very low corporate tax rates in comparison to the rest of the world and being labeled by other countries as Tax havens. The main objective that countries implement low tax procedures is to attract foreign direct investment within the country by large and small organizations. A corporation by agreeing to incorporate in a country enhances the services sector, the banking sector and most importantly the government increases its revenue stream. This ultimately means that employment is created within the economy. Furthermore, the possibility also arises for the real estate market and other investment possibilities. The sole reason that a company chooses to change to a low taxation system are for the company’s main goal of profits towards shareholders. Once profits towards shareholders increase, ideally with strong sales – share prices and all relevant gearing within a mixture of low operating costs make a company stand out like gold towards potential investors. Even though companies can adopt the advantages towards their shareholders by incorporating in a tax haven, they constantly come under strong scrutiny from their homelands (countries their headquarters reside in) for tax evasion as operations are in a ‘X’ country but sales are derived from the chosen tax haven. However, as the process is legal and no one can stop companies incorporating offshore, developed countries have found a way to challenge large corporations – by forcing banks to increase compliance measures and refusing corporations to work efficiently by increased and costly documentation for transactions. The main argument of a country implementing such procedures is that when a company does not pay local taxes, local residents have to foot the bill for public services. For example, a large corporation with 100 employees not paying local taxes but the employees use all public services in the immediate area i.e. roads, public transport etc. results in local residents paying for them. This would be the bridge that large organizations and governments have to overcome??gap. In order to open a bank account the right bank works with the corresponding jurisdiction and functions of a company. This is the challenge that Eltoma Corporate Services can assist its clients overcome when incorporating and choosing a jurisdiction. We can provide various corporate and personal options, by diversifying funds worldwide – either the bank account being for transactions or savings.