What are Tax Havens?

TAX HAVENS:
DEFINITION:
A tax haven can be described as a country or a region which for both, residents and nonresidents
has nominal or zero income tax rates.
The characteristics of such locations are:
1. Both residents and non-residents enjoy very low income tax rates
2. They provide a very high degree of financial freedom combined with regulations
whose enforcement is less stringent.
3. They offer limited wholesale banking services to non-residents with near zero tax on
income.
4. The non-resident financial institutions located at such centres are not integrated with
the financial system of the host country.
5. They promise strict secrecy regarding financial transactions of non-resident bank
customers which means there is a lack of effective exchange of financial information
with foreign tax authorities.