What Constitutes a Tax Haven?

A "Tax Haven" is a country or territory where certain taxes are levied at a low rate or not at all. Most countries, but not the United States, tax individuals and business entities on "residency." That is also true of some States in America such as Nevada. That, of course, is why so many wealthy people live in places like Switzerland and Monaco.
But, while residency for some, in Tax Havens like Switzerland and Monaco makes life easier on the pocket book, such is not the case of American citizens, and there is a common misconception about this. Americans are taxed based on their citizenship with the only tax exclusion being $82,400 as of 2010, and that money must be made outside of the United States.
For Americans abroad, the only way to avoid the "Long Arm" of the IRS is to renounce your American Citizenship (See www.dualcitizenshipregistry.com and www.escapehidedisappearoverseasregistry.com). Although this is a "high" personal price to pay, approximately 600 wealthy Americans do so each year.

The following Countries are typically considered to be “Tax Havens:”