ORIGIN OF TAX HAVEN
Tax haven had caught the attention of many people and corporations around the globe because of the sheer size of its phenomenon. Many had been very curious as to how it is being applied and implemented because of many mysteries and gossips surrounding it. But how it really started?
For some, the history of tax havens is packed with myths and fables. Many are saying that the introduction of this concept happened during the post-war era to help the industrial and economic development as well as to the process of decolonization of some European powers. In order to boom the economy, territories created tax systems that are capable of attracting foreign capital, which should therefore be backed up by the most varied legal- fiscal structures.
And so, how does it really start? Well, from the name itself, we could infer that tax haven was introduced due to the implementation of “Taxes” so one could infer that this was really created to avoid taxes. Basically, one of the first instances of a tax haven to have developed were the U.S. states of New Jersey and Delaware in the late 19th century in which they introduced the idea of “Easy incorporation.” These rules made it to the point
that today one can buy a company 'off the shelf' and begin trading in less than twenty-four hours. This was followed by the introduction of British courts on the idea of “non-resident corporation or some referred to as “virtual residencies”, allowing companies to incorporate in Britain without paying taxes. And lastly, the introduction of Swiss bank secrecy which is said to form the third pillar of the offshore world due to its demand of “absolute silence in respect to a professional secret” - "absolute" here means protection from any government, including the Swiss in respect to any accounts held in Swiss banks.
Though this create confusions and a lot of possible problems, as to some, tax havens can also provide financial security and secrecy, most especially in difficult times, economic instability or wars.
