Tax havens: Hong Kong leads with $2.8 trillion, beating Switzerland

Tax havens help individuals and corporations reduce tax burdens by shifting wealth to low-tax or no-tax jurisdictions, often ensuring better tax treatment.

A tax haven is a jurisdiction offering minimal or no tax liabilities, providing a politically stable and economically favourable setting for foreign entities.

Corporations and individuals use tax havens to store foreign-earned wealth, legally avoiding higher taxes in countries like the US or others with stricter tax regimes.

A common strategy involves establishing shell corporations, entities that exist without active operations, to manage wealth in a tax-friendly country.

Hong Kong hosts the most offshore financial wealth, benefiting from strong banking systems and tax laws that favour offshore income with a 0% tax rate.

While Hong Kong offers favourable tax policies, the impact of increasing Chinese control on its long-term offshore tax treatment remains uncertain.

Switzerland, holding $2.6 trillion in offshore wealth, remains a trusted financial haven, particularly for Western European nations due to its secure financial systems.

Singapore is third with $1.6 trillion in offshore wealth, leveraging its financial infrastructure and strategic position as a key player in global finance.

Luxembourg hosts $629 billion in offshore wealth, attracting corporations and individuals due to its business-friendly regulations and secure environment.

Jersey, with $281 billion in offshore holdings, plays a crucial role as a tax haven, favoured for its legal protections and established financial sector.

The Cayman Islands, managing $239 billion in offshore assets, stands out for its lenient tax policies and reliable banking structure tailored to foreign entities.