Why do companies use tax havens to route their investments into other countries?
OECD has acknowledged that the tax havens as they are called in India, while we will call them low or no tax destinations have an important part to play in world trade. If you were an Indian company that does not have any business interest in the UK but want to list in London, you do not need to set up an English company or pay English tax. The offshore route is easier and fairly well acknowledged. Of the top 100 AIMS companies, 15 are established in the Isle of Man, that is 4.5 billion of market cap. So it is a fairly well-established route. For international institutional investors, if the tax incidence is mitigated, it becomes a more attractive investment. It is money saved for investors in India. If an Indian company were to acquire assets around the world, in the last couple of months significant acquisitions have been made by Indian companies in the UK, having a holding company in a zero tax jurisdiction often plays a part in the cost structures. Many sovereign wealth funds too i
