New Zealand, the most remote jurisdiction, has the advantage of being a true primary jurisdiction but with a tough but practical regulatory regime. It is well positioned for the Asian market but retains close ties to Europe.
New Zealand has been recognised as a tax haven by the Tax Justice Network for the first time today, the Green Party said.
The Tax Justice Network produces the most comprehensive report of tax havens and today ranked New Zealand for the first time on its Financial Secrecy Index. New Zealand features on the Index due to our lack of transparency around foreign trusts and registered companies, and our below-average levels of co-operation with other countries when it comes to fighting international tax evasion.
“New Zealand’s international reputation as a transparent and well-regulated financial services centre took another step backwards today with our appearance for the first time on the Financial Secrecy Index,” said Green Party Co-leader Dr Russel Norman.
“Our secretive foreign trust regime and lax company registration requirements are damaging our international reputation.
“Anonymous shell companies and secret trusts are one of the most common ways of moving tainted money into the banking system.
“New Zealand’s foreign trust regime offers a legal vehicle for foreign criminals to hide wealth.
“Our lax standards and enforcement around company registration and resident directors continue to be exploited to register anonymous shell companies to facilitate crime, tax evasion, and fraud.
“National has done nothing to address the secrecy of our foreign trust regime and been slow to close our company registration loopholes despite full knowledge of the abuses occurring there. As a result, New Zealand was struck off the EU ‘White List’ in 2012 adding additional costs to New Zealand exporters doing business in Europe.”
The Green Party has offered to support the passage of the Companies and Limited Partnerships Amendment Bill through its remaining stages. The Bill will strengthen the company registration process. The Bill was introduced in October 2011 but has not been made a priority by National since Simon Power left office.
Dr Norman has also drafted a new law to address the secrecy loopholes that are easily abused in the New Zealand foreign trust regime.
“Transparency is the best remedy to ensure New Zealand foreign trusts are not being misused,” said Dr Norman.
“I have drafted non-controversial legislation that will impose a more rigorous registration and disclosure regime on New Zealand foreign trusts, effectively removing the secrecy provisions that make them so attractive to criminals and tax cheats.
“These measures will help restore international confidence in New Zealand’s reputation as a well-regulated and transparent place to invest and trade.”
The Cook Islands have much to offer prospective tax dodgers, including the sheer natural beauty of its beach climate. Combined with the tax advantages discussed below, it’s no wonder shamed Australian entrepreneur Alan Bond stashed his money here before it all came crumbling down on top of him. Not everyone has such a rosy view of the Cook Islands, however. AssetProtectionBook.com describes several instances where Cook Islands-based trusts were successfully invalidated by foreign judges and attorneys, some of whom actually specialize in going after trusts that are based there.
Amenities: No capital gains taxes, income taxes, or death taxes levied on investors.
An important consideration in choosing a tax haven is whether the country in question will share information with governments or investigators. This is where the Micronesian Pacific island of Vanuatu shines, as it shares no account information whatsoever with law enforcement.
Amenities: Highest level of secrecy, no income, capital gains, or inheritance taxes.
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http://en.wikipedia.org/wiki/Norfolk_Island
Residents of Norfolk Island do not pay Australian federal taxes,[48] creating a tax haven for locals and visitors alike. Because there is no income tax, the island's legislative assembly raises money through an import duty, fuel levy, medicare levy, GST and local/international phone calls.[20][48]
A hidden paradise with no income tax or property tax… Norfolk Island Vista June 20, 2013 Burnt Pine, Norfolk Island
[Editor’s note: Tim Staermose, Sovereign Man’s Chief Investment Strategist, is filling in for Simon today.]
If you’re looking for a clean, safe, English-speaking tax haven, with a mild, maritime climate, and an advanced, Western lifestyle, Norfolk Island should be on your radar.
This unique external territory of Australia lies roughly 2 hours and 30 minutes’ flying time northeast of Sydney, and 1 hour and 50 minutes flying time northwest of Auckland. It measures just 3 miles by 7 miles. It’s lush; it’s green; and, the vistas are stunning.
It is legally part of Australia, and the island relies on Australia for defense and foreign policy.
But it makes its own immigration laws. It has its own company law. And, perhaps most interestingly, it’s not part of Australia’s extensive tax system.
Norfolk Island is the only place in the world I have ever been where there is no income tax, no company tax, no property tax, and no municipal taxes. The only tax that currently applies on the island is a 12% goods and services tax (GST).
The air is some of the cleanest I’ve breathed anywhere in the world. It’s never too hot, and never too cold. Temperatures rarely drop below 12 degrees Celsius (54F) in winter, and rarely climb above 28C (82F) summer.
Most fruit and vegetables are grown locally, in the island’s rich volcanic soils. The locally raised, grass-fed beef, lamb, and free-range chickens are all delicious. Cattle roam freely all over the island.
20130620 norfolk21 1024x239 A hidden paradise with no income tax or property tax…
Locals, I’m told, pay a fee to the government of A$70 per year for each cow, which is then allowed to graze on public land. Each person is limited, however, to owning 5 or 6 beasts.
There is a well-regarded school on the island, and the local hospital can deal with routine health needs. And for an annual insurance premium of A$800 (US$ 735), your comprehensive coverage includes evacuation to mainland Australia in case of catastrophic emergencies.
It’s also a very safe community with good, old-fashioned values. Locals leave their houses and vehicles unlocked 24/7. Some even leave the keys in the ignition.
At the pub nobody had any qualms leaving their wallets, purses and mobile phones lying unattended on the bar.
So, what’s the catch? Why aren’t more people moving here? Besides being totally off the radar, it’s the economy.
Since the global financial crisis in 2008, Norfolk Island’s economy has shrunk by a massive 35% due mostly to the tourism slowdown.
The island’s airline, Norfolk Air, went bust. And the remaining airlines only offer occasional service. So fewer tourists are arriving.
Plus, the strong Australian dollar has made the island a costly destination for non-Australian visitors. And Australians are now vacationing more cheaply in Asia, Europe, and North America.
But in crisis there is always opportunity. And I’m seeing a lot of attractive, distressed assets for sale. It’s clearly a buyer’s market.
Another problem is that many Norfolk Islanders of working age are leaving the island to seek high-paying jobs in the mining industry on the mainland.
In fact, it’s estimated the island’s population has shrunk by a quarter recently. But things may just be beginning to turn around.
As of May 24th, Australian and New Zealand citizens can now move to Norfolk Island permanently based on their Australian or New Zealand citizenship alone; it’s hoped this will create a new source of population growth.
Other nationalities still have to apply for residency on Norfolk Island, and it is usually necessary to have a long-term work contract, or ownership of an operating business on the island to qualify.
For premium members, I will have much more to write about the Island, in terms of both residency and the many distressed assets I’ve seen, in the upcoming issue of Sovereign Man: Confidential.
BDR Price at posting:
73.5¢ Sentiment: None Disclosure: Not Held
