Thursday, 24 April 2014

Number of Czech firms with owners in tax havens drops after years

ČTK |
17 April 2013

Prague, April 16 (CTK) - The number of Czech companies whose owner is based in a destination considered a tax haven fell by 44 to 12,632 in the first quarter of this year, showing a drop for the first time in many years, according to data of Czech Capital Information Agency (CEKIA).

The number decreased for the first time in the past seven years during which CEKIA has monitored entrepreneurs' interest in tax optimisation and the securing of anonymous ownership.

"In the first quarter of this year, we registered a drop or stagnation of the number of Czech companies with an owner in a tax haven in 14 out of 19 monitored destinations. A growth was registered for the Seychelles (32 new companies), Cyprus (15), Malta, Belize and Panama (five in every of them)," CEKIA analyst Petra Stepanova said.

However, Stepanova does not think that the drop means that entrepreneurs' interest in tax optimisation has declined markedly.

"Our long-term statistics show that the first half is, from the point of view of moving parent companies, weaker, but the disclosure of the list of millionaires with property in tax havens also probably played a role. In Slovakia, the number of companies which moved their seat to a tax haven grew by 65 in the first three months," Stepanova said.

It is a paradox that the number of companies with a Cyprus-based owner has grown in the Czech Republic by 15 this year despite the crisis in Cyprus.

"The first quarter was marked by the banking crisis in Cyprus and a leak of information from some offshore jurisdictions. In general, we can say that clients decided to put off their decision on setting up a foreign company and its later use in the light of these events," Filip Reinoso of company Smart Companies said.

"However, we do not expect that clients' interest in companies in tax havens will decrease in the long-term perspective. For the future, we expect increased interest in less frequent jurisdictions such as Singapore and Hong Kong, for example," Reinoso added.

Around 3 percent of 366,500 companies registered in the Czech Republic are controlled from a tax haven.

CEKIA, which is part of multinational group Bisnode, collects information on companies controlled from tax havens solely from public sources.

Finance Minister Miroslav Kalousek (TOP 09) said at the beginning of April that the Czech Republic is losing a billion of crowns a year owing to companies' moving to tax havens, and not tens of billions as some estimates have claimed.

Companies' relocation cannot be ascribed to the domestic budget policy, but is a consequence of the fact that the Czech Republic has become a free and an open economy, Kalousek said.

Number of Czech companies with owner in tax haven:

Q1, 2013 2012 2011 2010 2009 2008 2007 2006
Bahamas 38 39 35 35 33 33 36 33
Belize 123 118 94 83 77 55 43 32
Bermudas 7 7 5 5 6 6 6 5
British Virgin Islands 455 455 438 422 424 441 406 359
Cayman Islands 36 36 38 32 33 33 23 21
Cyprus 1,919 1,919 1,705 1,550 1,411 1,150 956 663
Gibraltar 74 74 66 66 70 61 58 53
Hong Kong 79 80 69 59 49 41 33 33
Jersey (Great Britain) 56 57 59 59 58 57 58 58
Lichtenstein 254 261 255 245 262 275 259 257
Luxembourg 1,148 1,173 1,192 1,254 1,241 935 864 720
Malta 127 122 102 92 82 80 74 61
Monaco 51 51 54 64 48 40 35 39
Netherlands Antilles 16 16 15 14 13 14 22 20
Netherlands 4,414 4,443 4,501 4,519 4,551 3,474 3,274 3,042
Panama 203 199 190 170 162 108 78 72
Republic of Seychelles 544 512 414 330 262 225 167 130
United Arab Emirates 222 225 214 184 162 133 97 97
USA 2,866 2,903 2,750 2,635 2,545 2,135 2,021 1,888
Total 12,632 12,676 12,196 11,818 11,489 9,296 8,510 7,583

Source: CEKIA

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