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Interest in tax havens is on the rise

THE NUMBER of companies whose owners reside in tax havens increased to 4,266 in the end of 2014, up by 9.3 percent year-on-year. 

(Source: SME)

The biggest interest was in the US, Panama, Luxembourg and the Netherlands, the analysis by Bisnode consulting firm suggests.

“The curve of entrepreneurs’ interest in tax havens was very dynamic in 2014,” Milan Seliak of Bisnode said, as quoted in the press release. “While in the first half of the year the companies with owners in tax havens mushroomed, in the last quarter there was a drop in the total number of firms.”

According to Seliak, this is a result of the changes to the legislation, including the introduction of the withholding tax for offshore companies, or bigger pressure on revealing the information as the number of countries abolishing banking secrecy is increasing.

“We expect that in 2015 the situation will be similar to 2014, we do not expect a dramatic fall in interest,” Seliak continued. “The tempo of companies’ departures will change based on the policies of the state and changes to the legislation which impacts the business environment.”

The Bisnode analysis suggests that the countries reporting the biggest absolute increase were the US (169 new firms), Panama (64), Luxembourg (39) and the Netherlands (30). From the relative point of view, the most interesting was Gibraltar, Panama, Malta and Latvia. On the other hand, the number dropped in Seychelles (15) and Cyprus (five).

“The continuing trend in using foreign companies within business activities is no surprise,” Seliak said, as quoted in the press release. “The entrepreneurs orient themselves on America which has a greater seriousness in the business environment.”

He added that also Latvia, which joined the eurozone in 2014 and adopted new tax laws which enabled it to compete with other countries, came into prominence.

The Bisnode analysis also showed that the owners of companies residing in tax havens invested nearly €8.4 billion into the basic capital of their enterprises. Most of the companies are active in trade, technical activities and real estates.

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