Why Tax Havens Can Show A Business In A Negative Light

By Author: Rupert Grint
Total Articles: 17
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Basing your company in a country or principality that is a tax-haven may seem like a good idea, allowing you to pay no tax. But in reality it can actually be surprisingly damaging and problematic for a company. Whilst there are certain legal ramifications which will need to be dealt with and certain issues that will no doubt arise from the lack of regulations in such locations, there are other more serious issues to take into account. Furthermore, the cost of navigating the legal loopholes and the need to ensure that everything is done to the letter to avoid the many potential legal issues can be extremely high and may well leave you spending a huge amount of money anyway, just on legal costs rather than taxation. And since any taxation paid will be for the good of the country you are based in, it will usually be far more rewarding to pay taxes than legal bills.

However, it is the second issue that can cause more problems for companies set up in a tax-haven. With many companies and individuals recently coming under fire for avoiding paying any taxes, the public perception of a company that uses tax avoidance measures ...
... can lead to very public boycotts and extremely bad press. As such, it makes far more sense to become a Cyprus company or a company in another country that offers favourable taxation laws but doesn’t leave you simply avoiding tax.

The public perception of businesses in tax-havens is very negative indeed, and not only might it make people question your ethics or raise suspicions of money laundering, but it may also simply leave people preferring to do business with those who are paying honest taxes. By doing business in Cyprus, you can get the most favourable taxation laws in the EU, allowing you to save money on tax without simply avoiding it, and at the same time you will be doing business in a country that has a very good legal structure and one with excellent trade links to boot.

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