Singapore is world's fifth-largest tax haven, behind HK: Report

NEW YORK — Singapore is the world's fifth-largest tax haven, behind Hong Kong, according to a report released on Tuesday (Jan 30) that placed Switzerland on top and the United States as second.

The Financial Secrecy Index, an assessment of global financial centres compiled by the Tax Justice Network, a left-leaning research and advocacy group, bumped up the US from its No. 3 spot in 2015 — the last time the study was conducted — following its increased share of the global market for offshore financial services.

The US now accounts for about 22 per cent of the global market in offshore services, up from 14 per cent, according to the report.

"While the United States has pioneered powerful ways to defend itself against foreign tax havens, it has not seriously addressed its own role in attracting illicit financial flows and supporting tax evasion," the report said. The authors criticised the US for its "independent-minded approach" to cracking down on tax evasion, money laundering and financial crime.

Delaware, Nevada and Wyoming were highlighted as hot spots for secretive "shell" companies, with nominee officers and directors who serve as a front for the actual, hidden owners.

The Cayman Islands ranks as the third-most secretive financial jurisdiction, followed by Hong Kong in fourth and Singapore at No. 5. Taiwan was included for the first time, and was ranked at No. 8.

The index, which is published every two years, ranks countries on their laws regarding the transparency of ownership structures, bank secrecy rules and financial reporting and disclosure requirements. Scores are weighted for size. This year, it used new criteria including whether countries provide public registers of ownership and annual accounts for limited partnerships. BLOOMBERG