Put simply, tax havens are jurisdictions that offer low or even no taxes in a bid to attract foreign investment. From a taxpayer's perspective, the first sign of a good tax haven is that it's completely legal.

Are tax havens illegal?

While it is not illegal to establish an offshore bank account, it is illegal to hide assets in these accounts in order to evade tax obligations. Banking institutions are required to report balances and activity of American citizens to the Internal Revenue Service.

Are tax havens real?

A tax haven is a country that offers foreign businesses and individuals minimal or no tax liability for their bank deposits in a politically and economically stable environment.