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Using Offshore Company Formation for Tax Reasons

Offshore company formation
is a very old tax trick that businesses, big and small, have been using since time immemorial. However, in recent times, all kinds of taxes are being exacted in the United States forcing an increasing number of businesses to search for tax havens such as Hong Kong and the Cayman Islands to reduce their tax obligations.
Seeking Help from Abroad
It is ironic that when many countries all over the world are reducing their tax rates, the reverse is happening in the United States. This tax related issues are taking place as the U.S. Congress remains to be unwilling to lower the tax rate to 35 per cent.
The tax rate in the United States remains one of the highest in the world. No wonder, many companies have established offshore companies in countries that offer all kinds of tax benefits.
Defective Tax Code the Culprit?
The present administration along with many lawmakers seem to agree that tax shelters, tax inversions, and all kinds of tax reduction schemes are just a natural reaction to a defective tax code. Still, they contend that this is not enough reason for companies to withhold paying their taxes due the government.
Tax Havens of American Companies
Recently, the Democrats have created a chart of companies that utilized tax inversions since 1983. From this list, financial analysts developed another list detailing the countries where these American companies have gone to in order to reduce their taxes.
The following is a sample listing of the countries where most of the American companies are going for tax reduction purposes.
Inversion Year   Company Name                      Type     Country of Incorporation   Revenue
1983                McDermott International        Eng’g. Panama                             $2.7 billion           
1994                Helen of Troy      Consumer Products Bermuda                           $1.3 billion
1996                Chicago Bridge & Iron              Eng’g. Bermuda                           $11.1 billion
1999                Transocean                 Offshore Drilling  Cayman Islands         $9.4 billion
1999                White Mountain           Insurance            Bermuda                 $2.3 billion
2000                Applied Power Engineering                Bermuda                      $494 million   
2000                Everest Reinsurance   Insurance                    Bermuda                      $5.6 billion
2000                Seagate Technology   Data Storage    Cayman Islands           $14.4 billion
2001                Foster Wheeler           Engineering                 Bermuda                      $559 million
2002                Noble Corp.                 Offshore Drilling         Cayman Islands           $4.2 billion
2002                Nabors Industries        Oil and Gas                 Bermuda                      $1.6 billion
2002                Ingersoll-Rand Ind’l. Manufacturer     Bermuda                      $12.3 billion
2002                Herbalife                     Nutrition          Cayman Islands           $4.8 billion
2005                Luna Gold Corp           Mining             Canada                        $85.3 million
2007                Argonaut Group           Insurance        Bermuda                      $1.4 billion
2008                Covidien                      Healthcare      Ireland                         $10.2 billion
2010                Valient Biovail        Pharmaceuticals  Canada                        $5.7 billion
2011                TE Connectivity           Manufacturer  Switzerland                  $13.3 billion
2011                Pentair                           Water Filtration Switzerland             $7.5 billion
2012                Eaton/Cooper  Power Management      Ireland                       $22 billion
2013                Perrigo/Elan                Pharmaceuticals   Ireland                   $3.5 billion
2013                Liberty Global PLC       Cable Company    UK                          $17.3 billion
2014                Chiquita Brands          Produce                 Ireland                   $3 billion
2014                Medtronic                    Pharmaceuticals   Ireland                   $16.5 billion
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