The U.S. is moving up in the world, at least for those in search of a tax haven. According to the Tax Justice Network, which analyzes tax havens, the U.S. now ranks second for “financial secrecy,” behind only Switzerland. The U.S. moved up from third place last year, surpassing Cayman Islands for the size and secrecy of its offshore financial activities.
The Tax Justice Network estimates that there is between $21 trillion and $32 trillion of private financial wealth parked in what it calls “secrecy jurisdictions” around the world. The U.S. has been steadily increasing its market share for offshore financial services, and now claims about 22 percent of the global market.
According to the group, “The U.S. provides a wide array of secrecy and tax-free facilities for non-residents, both at a Federal level and at the level of individual states. Many of the main Federal-level facilities were originally crafted with official tolerance or approval, in some cases to help with the U.S. balance of payments difficulties during the Vietnam War; however some facilities – such as tolerance by states like Delaware or Nevada of highly secretive anonymous shell companies – are more the fruit of a race to the bottom between individual states on standards of disclosure and transparency.”
Here are the top 15 countries in the financial secrecy index for 2018:
- Cayman Islands
- Hong Kong
- United Arab Emirates (Dubai)
One interesting note: If all of Great Britain’s overseas territories and dependencies were counted as a single network — including Great Britain itself, Cayman Islands, Guernsey, Bermuda and roughly two dozen others — it would surpass Switzerland as the largest tax haven the world.