Most countries tax their citizens. These taxes are cut from their income, monetary gains, transaction of businesses and income gaining from out shores sources. All the same, they are not imposed on residents who are away from the motherland. Though this practice can be witnessed in many countries, the USA taxes their citizens irrespective of their residencies in USA or other countries. Consequently, many citizens of the USA migrate to other countries as a solution.
Tax mitigation includes various legal methods to exempt or get relief from heavy taxation. It is called tax avoidance in the USA. There are also professional firms who engage in consultation services showing people ways to avoid taxation.
Many rich people choose the option of opening an offshore company. In this manner, they can keep the citizenship in the motherland as well and avoid the taxation completely. Some open some sort of foundation, trust or similar institution in a country that a tax haven is situated. After forming this type of entity, these people transfer their assets to the new place. In countries treated as tax havens, the profit gained by these types of methods is not taxed. Some people root out their origin and permanently migrate to overseas tax havens.
Many countries do not tax at all on these ventures or have mitigated taxation on them. The taxes normally prevalent in the USA are not that strict in other countries and sometimes differs based on certain categories even exempting others from taxes. This difference exists for some types of companies too.
There are about sixty countries that are considered as tax havens. The Caribbean region is one of the best tax havens in the World and it includes Bahamas, Bermuda, the Caymans, Panama, Sts Kitts & Nevis, Turks and Caicos, Anguilla, British Virgin Island, Panama and US Virgin Islands. Most of these countries exempt foreign companies from taxation. In US Virgin Island, US income tax is exempted up to 90 percent. British Virgin Islands has the highest percentage of foreign companies when compared with other Caribbean countries. It is said that about $1 trillion worth of funds from citizens of foreign countries are saved in the Caribbean now.
In the USA, the trusts under Nevis Trust Law need not pay taxes. Submitting easy to fill documents is enough to be a trust under the Nevis Law and there is no need to obtain a special license. Nevis Law allows IBC to activate exempting 100 percent taxes. The income tax, inheritance tax, estate tax and capital gains taxes are not a problem for IBCs under Nevis Trust Laws.