A tax haven is a geographic location in which foreign entities face minimal tax liabilities. Other features of a tax haven are:
- A stable political environment
- An unwillingness to share financial information about investors with the tax authorities of other governments
- Minimal residency requirements for foreign entities
- Robust banking services
Tax havens are used by wealthy entities to avoid paying taxes in their home countries. The number of tax havens is shrinking, as they have come under increased pressure from the international community to share the financial information of their wealthy investors with other tax authorities.