KINIGUIDE | When we hear about offshore trusts and tax havens, images from Hollywood films come to mind, depicting the super-rich or mega-corporations secretly moving their wealth to countries with little or no taxation and evade paying them at home.
Countries in the Caribbean such as the British Virgin Islands, the Cayman Islands, and the Bahamas are frequently depicted as "tax havens".
While the reality may not be quite as dramatic as what Hollywood makes it to be, the global offshore financial industry allows individuals and corporations to take advantage of the best possible financial regulations and tax regimes, costing governments billions in lost tax revenue.
This guide is written as a companion piece for Malaysiakini's series on the Pandora Papers.
The Pandora Papers is an investigation by the biggest journalist collaboration in history into millions of records exposing tax haven secrecy, following an anonymous 2.94 terabyte info dump to Investigative Consortium of Investigative Journalists (ICIJ) and its partners, including Malaysiakini.
The files are from 14 offshore service providers that set up and manage shell companies and trusts in tax havens around the globe.
With this guide, Malaysiakini gives an overview of offshore trust companies and tax havens.
What is a tax haven?
There are several definitions of what makes a country a tax haven.
The term generally refers to countries or jurisdictions (such as the Channel Islands of Jersey and Guernsey) with low or no corporate taxes, as well as which allow non-residents or citizens to easily set up businesses there.
Most tax havens usually have strong...