x Abu Dhabi, UAEFriday 21 July 2017

Haven sent

Homes There are some unlikely new locations where you can hide from the tax man.

One of the new places on the tax haven scene is Belize. The film director Francis Ford Coppola has a luxury resort in the country.
One of the new places on the tax haven scene is Belize. The film director Francis Ford Coppola has a luxury resort in the country.

Around the world, a quiet but fierce battle is raging. In a bid to lure high net-worth individuals to their shores, the world's tax havens are trying to outrival each other with tax breaks. And the list of combatants is not a short one - according to the US National Bureau of Economic Research, roughly 15 per cent of countries are tax havens. While the UAE and Switzerland may be the first places that spring to mind, there are some unlikely new contenders such as Macedonia and Liechtenstein, among them.

"The definition of a haven is a place that is offering low to zero tax, I'd say," says Paul Panayi, the managing director at Optimus Wealth, a wealth management company. "The name implies safety - in a storm you would want to find a haven. With increased competition from so many countries looking for high net-worth individuals, the tax perks on offer are getting better. The old money seems to stick with the places they know: Monte Carlo or Switzerland, for example - places where you pay an enormous amount of money for a property. There is a growing group emerging, however. People who have done well in business in the last five to 10 years but might not be super-wealthy and who are looking at some of the newer tax-friendly places - like Dubai, Mauritius and the Caribbean. Typically, people only reside at the tax haven for three to four years if they're about to sell a business, or they know they are going to have a period of high earnings."

"Monaco used to accept anyone, but not any more," continues Panayi. "These days you have to guarantee you will be there for a year, as well as deposit a sizeable amount into a bank account - at least £500,000 (Dh3.2 million). They also do credit checks. In Switzerland, it varies from canton to canton; generally you turn up to the local tax office, strike a deal on the amount of tax you pay and pay that amount."

The Caribbean is an enduringly popular location for the rich; somewhere they can live in idyllic, tropical surroundings, and save money while doing so. Bermuda, Barbados, the Bahamas, the Cayman Islands, Anguilla, Grenada, Nevis and the Turks and Caicos are all offering low tax to anyone who resides there. Typically, these islands offer no income tax, value added tax, capital gains or inheritance tax - and in some cases, no property taxes - but regional variations do occur.

Prices in Barbados, for example, are high: the cheapest one-bed property on Cluttons estate agency's books starts at Dh3.7m and goes up to Dh7m. Barbados's West Coast is seen as the most desirable - and priciest - area to live in, home to Sandy Lane, the celebrities' hotel of choice, and to the Four Seasons resort, where Simon Cowell recently spent a rumoured Dh94m buying his holiday home. There are cheaper alternatives, however. In Grand Bahama, which is tax-free and where you can qualify to apply for residency if you purchase a property, you can buy a one-bed in the Suffolk Court development - a 10-minute drive from Freeport International Airport - for Dh1.7m.

Another increasingly popular destination is Mauritius. It is only since 2002 that foreigners were allowed to buy on the tropical island in the Indian Ocean off the coast Africa, with astonishing beaches and rainforest - and only after the government had introduced a system called the Integrated Resort Scheme (IRS). IRS was designed to keep property relatively high-end: by law, non-Mauritians have to pay a minimum of Dh1.8million when buying on the island, as well as fork out a land registration tax of Dh257,000. The good news is that with your Mauritian property you automatically get residency - as do any dependents - and corporation tax is capped at 15 per cent.

The upside is that Mauritius has no capital gains or inheritance tax and its economy is strong - rising at around six per cent annually. On the downside, as a foreigner, you can only buy a newbuild property in a designated IRS resort, so if your dream is lovingly to renovate an old plantation house, this isn't the island for you. Average prices paid by foreigners on the island are around Dh2,571 to Dh3,122 per square metre. Cluttons is selling Villas Valriche, a development offering luxury villas with infinity pools and easy access to an 18-hole golf course. Prices in the hilltop development, with panoramic sea views in front and the Black River Gorge National Park to the rear, start at Dh3.11m for a detached villa with pool and gardens.

Switzerland is where the old money goes, and it is famously picky about who lives within its borders - Swiss property laws are designed to make sure the foreigners don't nab all the best properties. The federal government has set an annual quota of permits for non-resident foreigners seeking to acquire property in Switzerland. In addition, cantonal authorisation is needed before gaining a title, and each canton has different rules on the issue. Average property prices in the country are Dh27,279 per square metre, according to the Global Property Guide.

"We have a huge variety of clients from all sorts of walks of life buying in Switzerland," says Annabelle Waite of the Swiss branch of property investment agency Pure International. "Investors taking advantage of low interest rates, grandparents buying family chalets as heirlooms - and avoiding inheritance tax - young professionals starting a family wanting social and economical security. EU nationals can relocate here easily - they simply have to apply for a permit. They also have to prove they have sufficient financial means and adequate health insurance. Non-EU citizens can obtain residency permits if it is justified on a financial basis."

For somewhere a bit less conventional you may want to consider Belize, the English-speaking Central American nation - at least according to James Hickman of Caxton FX, a specialist currency exchange company. "It is one of the best tax havens in the world, having no capital gains tax or estate tax, and under certain provisions, non-residents and offshore companies are able to repatriate their earnings tax-free."

Most people are buying land and flats within resorts. One of the more high-end areas in Belize is Placencia, a 16-mile-long peninsula in the south of Belize, home of Francis Ford Coppola's resort, Turtle Inn. Prices at another development, Bella Maya, a luxury beachfront four-star resort with swimming pool, restaurant, bar, shops and private beach, start at Dh1.38m, and most properties come with balcony or terrace.