There is not clear an explanation what tax haven means however according to OECD it’s a country doesn’t follow the 4 criteria.
OECD (Organisation for Economic Co-operation and Development) has made a list of the most important criteria it considers when determining whether a jurisdiction is a tax haven or not.
These criteria (according to OECD) have been specified as follow:
1. no or nominal tax on the relevant income;
2. lack of effective exchange of information;
3. lack of transparency; and
4. no substantial activities of the taxpayer in that jurisdiction, (2) together referred to as OECD Tax Haven Criteria.)
OECD has formulated following groups where 84 jurisdictions have been assessed:
While List – jurisdictions that the OECD does not consider as tax havens.
Grey List – jurisdictions have partly implemented the OECD International Tax Standard.
Black List – no tax cooperation, there are currently no black list countries.
Under the laws of St. Vincent and the Grenadines, an International Business Company is a company which is registered in St. Vincent but is not subject to any local taxes and does not regularly transact business with persons resident.
Currently an IBC cannot own real property in St. Vincent and the Grenadines but an amendment to the law in early 2008 is expected to change this.
An IBC is a very flexible entity which can be used for almost every conceivable business purpose. Some of the most popular uses for an IBC are as:
A Trading Company
• Exporting intermediary
• Importing intermediary
• International trading and investment
• Re-invoicing intermediary
An Holding Company
• Parent Company / owning subsidiaries
A Property Holding Company
• Ownership of intellectual property such as patents
• Ownership of investments
• Ownership of real property
• Ownership of shares in other companies
• Ownership of ships or vessels which can be registered in St. Vincent
A Consultancy Company
• Provision of professional and consultancy services to others
Other uses include:
• Licensing and franchising
• Offshore e-business / internet company
• The employment of staff working on overseas assignments