7 of the world's most infamous tax havens
Cyprus has been all over the news of late, after the tax haven of choice for many super-wealthy Russians very narrowly avoided financial collapse by scoring a European bailout. But, as British journalist Nick Shaxson tells MSNBC.com, Cyprus is only one of 50 or 60 countries that "have made a strategy out of being a tax haven." Chances are, if you are wealthy individual or international corporation, you probably have money in one of those countries. Here, seven of the best known:
GDP: $23.57 billion
Tax incentives: A 10 percent corporate tax rate and a generally opaque business environment.
Foreign cash: At least $26 billion, mostly from Russian oligarchs, according to Bloomberg Businessweek.
Famous "resident": Gennady Timchenko. Bloomberg reports that despite the fact that his company, Guvnor, is legally located in Cyprus and experiences $87 billion in annual turnover, Timchenko claims he had "only a few hundred thousand euros" in Cypriot banks.
GDP: $42.19 billion
Tax incentives: According to Reuters, Luxembourg offers an effective tax rate of under 6 percent by exempting "income a company earns through intellectual property." Its position in the European Union is also attractive to businesses that want to sell throughout Europe without any red tape.
Foreign cash: American business profits were 208 percent of Luxembourg's GDP in 2008, according to a report from the Congressional Research Service.
Famous "resident": Amazon, which calls its Luxembourg office its European headquarters. Since 2005, the company has accrued "tax-free cash worth more than $2 billion," according to Reuters.
GDP: $4.5 billion
Tax incentives: No corporate income tax. Also, as Bloomberg reports, a legal loophole lets insurance companies move cash through Bermuda with no financial penalty from the IRS.
Foreign cash: Around 40 percent of the island's GDP comes from financial services, according to Bloomberg Businessweek.
Famous "resident": Billionaire hedge fund manager John Paulson, who sent $450 million on a roundtrip vacation in 2011, which let him pay lower personal income tax rate and delay payments "indefinitely," according to Bloomberg.
GDP: $2.25 billion
Tax incentives: No direct taxation.
Foreign cash: Assets from the country's 91,712 registered companies equal $1.607 trillion, according to CBC News.
Famous "resident": Facebook, which pulled the old "Double Irish" by shifting nearly $668 million from an Irish bank to a subsidiary in the Cayman Islands, according to The Telegraph.
GDP: $362.4 billion
Tax incentives: Perhaps you've heard of Swiss bank accounts? The country's strict privacy laws attract wealthy people from all over the world, although the 2010 Foreign Account Tax Compliance Act, which forces foreign banks to disclose the identities of their customers, made many Swiss banks wary of U.S. businesses, according to Slate.
Foreign cash: When the recession hit, so much foreign currency was flowing into the country that the Swiss franc ballooned to historic proportions, causing panic in the Swiss government, according to the New York Times.
Famous "resident": Mitt Romney. The former presidential candidate said his Swiss bank account was a financial move meant to hedge against the declining dollar, but that didn't stop the Obama campaign from painting him as a tax evader.
GDP: $62 billion
Tax incentives: Low taxes and essentially no requirements for creating a corporation, making it easy to set up a shell company with "no employees, no assets and, in fact, no real business to speak of," according to the New York Times.
Foreign cash: Delaware is actually home to more corporations (945,326) than people. The Delaware Division of Corporations boasts that the state is home to more than 50 percent of U.S. publicly traded companies and 64 percent of the Fortune 500.
Famous "resident": Viktor Bout, the Russian arms smuggler known as the "merchant of death," who was sentenced to 25 years in prison on terrorism charges, had two Delaware addresses, according to the New York Times.
GDP: $326.7 billion
Tax incentives: Tax rates that max out at 20 percent and no capital gains taxes, according to Reuters.
Foreign cash: Reuters reported that estimates put "the amount of German money moving to Singapore in the double-digit billions," forcing the German government to step in and negotiate more transparent banking standards.
Famous "resident": Eduardo Saverin, who caused a public outcry when he renounced his U.S. citizenship and moved to Singapore right before the company he co-founded, Facebook, went public. At the time, Saverin's shares were expected to be worth around $3.84 billion, according to Bloomberg.