Indebted Caribbean tax havens look to tax foreign investors
Industry analysts say new fees and taxes could bring in needed money to a region where some debts are near that of Greece. But could they scare off investors?
SANTO DOMINGO, Dominican Republic
For a territory of just more than 56,000 people, the Cayman Islands boasts an impressive corporate roster: From some of the favorite US brands like Coca-Cola and Federal Express to the world’s richest sports franchise, English football club Manchester United.
The three-island British territory tucked just south of Cuba in the Caribbean Sea has more than 92,000 registered companies, according to the government, most of which do the majority of their business elsewhere.
A check around the Caribbean reveals similar stories. The islands have long been attractive because they collect little or no taxes. They’ve built economies around financial services, which has proven a more reliable source of income than tourism in recent years. And over time they’ve helped foreign companies and well-heeled individuals reduce their tax bills. Among them is the hedge fund Bain Capital, of Mitt Romney fame, which became a lightning rod for criticism during the presidential campaign.
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