Nomad Capitalist Audio Experience Why I Don't Recommend Caribbean Companies (And What I Would Choose Instead)
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Oct 9, 2025 Explore the downsides of Caribbean companies for operational businesses, as economic substance rules tighten benefits. Discover why they're better suited for investment holdings while facing banking challenges. Uncover the reputational damage these jurisdictions cause, perceived as mere tax shelters. Instead, consider alternatives like Uruguay, Costa Rica, and Panama, which offer solid tax benefits and favorable reputations. Learn about the importance of strong tax treaty networks for international business success.
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Tax Neutrality Isn't Global Immunity
- Caribbean jurisdictions offer tax neutrality at the local level but home-country tax rules still matter.
- Andrew Henderson warns that zero local tax doesn't remove tax obligations in countries like the US or Canada.
Economic Substance Changes The Game
- Economic substance rules now require real physical presence for many activities in Bahamas, BVI, and Cayman.
- Andrew Henderson highlights that without substance you may lose the benefits of a zero-tax regime.
Don't Expect Easy Bank Accounts
- Avoid relying on Caribbean companies for transactional business banking because many international banks hesitate to open accounts.
- Seek jurisdictions with clearer banking access if you need transactional business accounts.