Samoa: An Ideal Tax Haven A small group of islands situated near the equator, Samoa offers an enticing and advantageous setting for the establishment of offshore companies. Known for its tropical climate that draws tourists and residents alike, Samoa boasts a favorable tax environment, largely overseen by the Samoan International Financial Services Authority (SIFA) since 2005. Two primary offshore formation products provided by SIFA, the Samoa International Company (IC) and the Samoa Limited Life Company (LLC), offer a myriad of advantages to their clients, primarily the absence of local taxes, auditing requirements, and financial account submissions. Despite facing pressure from the Australian government to reform its offshore industry, Samoa has not been subjected to negative connotations in the offshore banking or financial services arena. The Upsides of Samoa as a Tax Haven Several benefits make Samoa an attractive destination for offshore businesses. To start, the Samoan government has not entered any double taxation treaties with other countries. Additionally, the country enjoys complete political, economic, and social stability and is not blacklisted by any international organizations like OECD or FATF. Its robust asset protection legislation prevents foreign government court orders, and its SIFA legislation ensures client confidentiality. Samoa offers zero taxes for all its international offshore companies, and there are no requirements for annual reporting, accounting, or any financial auditing for offshore businesses. Moreover, the islands have modern infrastructure, roads, ports, and airports, as well as telecommunications, making them an attractive and accessible location for businesses. Samoa as a Tax Haven: Background Insights Geographical Location Samoa, also known as ‘The Sacred Center of the Universe’, is a part of the Samoan Islands located in the South Pacific Ocean between Hawaii and Australia. The two main islands, Upolu and Savai’I, constitute 99% of Samoa’s total land mass. Political Structure Samoa operates on a parliamentary representative democracy model similar to that of Britain. The governance is headed by a Prime Minister (PM), backed by a cabinet of twelve appointed members, all subject to the continuing confidence of the legislature. A traditional Samoan fa’amatai system also exists alongside the more westernized style of governance, dealing with criminal and social issues within the country’s 360 village councils. Economy and Infrastructure Historically reliant on agriculture and local fishing, Samoa has recently leaned towards personal remittances, tourism, development aid, and agricultural exports to support its economy. The country’s capital, Apia, is equipped with a modern international airport and has witnessed major infrastructure improvements like the installation of wireless 3G broadband access, roadworks, and a new marina and harbor. Exchange Control Samoa imposes no exchange controls or currency regulations. The local currency, the Tala (SAT), is regulated by the Central Bank of Samoa, with its exchange rate pegged against a basket of currencies from its six major trading partners. Type of Law The country’s offshore financial laws are predominantly based on English Common Law, adapted from other notable offshore financial jurisdictions. Samoa has signed several tax information exchange agreements with thirteen other countries to curb tax fraud and money laundering. Corporate Legislation: The Foundation Samoa’s International Finance Authority (SIFA), under the aegis of the Central Bank of Samoa, governs the offshore financial market. The Samoan government has adopted a series of legislations, such as the International Companies Act 1987 and the Offshore Banking Act 1987, to establish a safe, credible, and liberal offshore financial market. Taxation of Offshore Companies While Samoa levies a 27% tax rate on local residents, its international offshore companies enjoy complete exemption from all local taxation, inclusive of taxes on profits, capital gains, transactions, and contracts. This exemption, combined with the nation’s other benefits, has positioned Samoa as a preferred choice for offshore companies seeking tax-efficient jurisdictions.
