Monday, 21 April 2014

Number of Czech companies controlled from tax havens up

ČTK |
12 February 2013

Prague, Feb 11 (CTK) - The number of Czech companies whose owners are registered in a tax haven grew by almost 4 percent to 12,554 last year, according to an analysis conducted by Czech Capital Information Agency (CEKIA) which CTK has obtained.

The figure shows that 3.4 percent of the total 366,500 companies registered in the Czech Republic are controlled from tax havens. CEKIA uses only publicly accessible sources for collecting information about companies controlled from tax havens.

"Entrepreneurs' interest in tax optimisation and securing anonymous ownership through foreign companies continued last year," CEKIA analyst Petra Stepanova said.

"The so-called onshore destinations in Europe were last year clearly dominated by Cyprus (a growth of 12 percent). The most popular offshore destination were the Seychelles (24 percent)," Stepanova said.

Compared with the previous year, CEKIA registered increased interest in destinations outside Europe that are usually used for securing anonymity. This, according to Stepanova, is very likely related to unclear future of anonymous shares in the Czech Republic.

Among the most popular tax havens are European destinations in the long term, namely the Netherlands, Cyprus and Luxembourg.

The popularity of Cyprus as a tax haven has been growing steadily since 2006 when CEKIA started to compile the statistics, while the number of companies controlled from the Netherlands and Luxembourg has been falling in recent years.

The number of Czech companies with their owner registered in the Netherlands was last year the lowest in the past four years, Stepanova said.

From a relative point of view, the biggest growth in 2012 was recorded mainly thanks to a lower comparative base for the Bermudas (40 percent), Belize (25.5 percent) and the Seychelles (23.7 percent).

"Entrepreneurs move seats of their companies to tax havens because of fears of a further growth of taxes in the Czech Republic, for example," Filip Reinoso of company Smart Companies told CTK.

"An important factor is also the fact that a number of countries, the so-called tax havens, have a stable entrepreneurial environment and have signed an agreement on investment protection with the Czech Republic," Reinoso said.

For the control of their businesses, Czech entrepreneurs last year used companies in countries in which the register of companies contains less information than in the Czech Republic, Michal Friedberger of company Akont said.

Such practice protects not only entrepreneurs' privacy, but also sensitive economic data made public in financial statements, Friedberger said.

Friedberger expects that interest in ensuring anonymity through foreign companies will grow along with the cancellation of bearer shares.

The possibility to use bearer shares in paper form will be cancelled as of January 2014 as part of the planned change of the law on corporations. Information on owners will then be registered, which might not be convenient for a number of owners.

Number of Czech companies with owner in tax haven:

2012 2011 2010 2009 2008 2007 2006
Bahamas 39 35 35 33 33 36 33
Belize 118 94 83 77 55 43 32
Bermudas 7 5 5 6 6 6 5
British Virgin Islands 455 438 422 424 441 406 359
Gibraltar 74 66 66 70 61 58 53
Hong Kong 80 69 59 49 41 33 33
Jersey (Great Britain) 57 59 59 58 57 58 58
Cayman Islands 36 38 32 33 33 23 21
Cyprus 1,904 1,705 1,550 1,411 1,150 956 663
Lichtenstein 261 255 245 262 275 259 257
Luxembourg 1,173 1,192 1,254 1,241 935 864 720
Monaco 51 54 64 48 40 35 39
Netherlands Antilles 16 15 14 13 14 22 20
Netherlands 4,443 4,501 4,519 4,551 3,474 3,274 3,042
Panama 199 190 170 162 108 78 72
Seychelles 512 414 330 262 225 167 130
USA 2,903 27,50 2,635 2,545 2,135 2,021 1,888
Total 12,554 12,094 11,726 11,407 9,216 8,436 7,522

Source: CEKIA

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