Individuals and corporations send money abroad for various reasons, including seeking better investment opportunities, minimizing tax burdens, and protecting their wealth in low-tax or no-tax jurisdictions.
This graphic, via Visual Capitalist's Bruno Venditti, shows the top 10 countries that owned the most offshore financial wealth in 2022, according to data from the Atlas of the Offshore World.
Chinese Hold Over $2 Trillion Abroad
Chinese mainland businesses and individuals hold over $2 trillion abroad, nearly matching Mexico’s GDP. Hong Kong is a top destination for Chinese corporations and individuals conducting offshore operations.
Meanwhile, the Cayman Islands, Switzerland, and Singapore are common destinations for U.S. offshore operations. American hold almost $1.6 trillion abroad.
Together, individuals and companies from the UK, France, and Germany hold $2.1 trillion abroad.
What Is a Tax Haven?
A tax haven offers foreign businesses and individuals minimal or no tax liability. They also have politically and economically stable environments.
Entities may legally use tax havens to stash money earned abroad while avoiding higher taxes in the U.S. and other nations.
For this kind of operation, companies often establish a shell corporation, which is a corporation without active business operations or significant assets in the country they are located.
To learn more about topics like offshore wealth and tax havens, check out this graphic that shows the top 10 countries hosting the most offshore financial wealth.
