But Geoff Cone disagrees. The tax lawyer is quick to point out that New Zealand does not even come close to qualifying as a tax haven for wealthy foreigners. Like most things that deal with tax, Cone says, it is pretty mundane. There is no shadow banking industry in New Zealand and no foreigners stashing cash on the island nation.
Being called a tax haven should disappoint New Zealanders because most tax haven countries are near third world. Countries in the Caribbean, for instance, are used by wealthy individuals from the States in order to hide massive amounts of money from Estate Taxes. Cone continues to describe what qualifies a country as a tax haven.
First, the country needs to have little to no tax itself. This invites the wealthy to stash their cash without much being skimmed off the top. Second, the banking industry in the country needs little to no oversight or regulations. This allows the wealthy to be stealthy with stashing their cash. And lastly, the country needs to have a law that prohibits communications about said banking with foreign governments. This stymies governments looking to investigate the money trail as it seeks to claim its share of tax.
Instead, Cone says, New Zealand is the opposite of a tax haven. New Zealand maintains scores of agreements with other countries that allows for free and open communications between governments. The banking regulations in New Zealand are strict, tough and fair. There is incredible transparency that does not allow for shadow banking. And lastly, New Zealand imposes stiff taxes compared to other countries.
But the stiff taxes do not scare foreigners from setting up trusts in the country. The stable banking environment and economy make it ideal for the wealthy because it ensures their trust will be safe. And that is why the number of foreign trusts is rising.
Geoff Cone knows his stuff. He runs the only New Zealand law firm that specializes in trusts and tax. He’s spent his whole life studying, setting up and executing trusts in New Zealand, save for a two-year stint in the British West Indies as a litigator.
Graduating from the University of Otago and practicing in Auckland, Geoff is a lifelong guardian of New Zealand tax and trust law. It’s safe to trust him when he says that New Zealand is not a tax haven.