Tax havens are, in the popular imagination, located in exotic locals such as Switzerland, The Bahamas, or Panama. But things are changing and the new favorite haven is in a place that will strike few as exotic, South Dakota. Hundreds of billions of dollars have been shifted into the state as the ultra wealthy seek to take advantage of South Dakota’s friendly trust laws and tax policy. Perhaps the most popular attraction are the strict privacy laws when it comes to revealing details concerning ownership as long as a local trustee is appointed. Then, a foreign trust protector can be put into place who will direct the local trustee while maintaining the advantages of nondisclosure. But South Dakota is still a long way from overtaking the leading havens for wealth although the yearly growth in assets managed in the state exceeds %6. In any case, the popularity of the state is not likely to dip anytime soon as the advantages it offers are difficult to pass up.
See Kara Scannell & Vanessa Houlder, US tax havens: The new Switzerland, Financial Times, May 8, 2016.
Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this article to my attention.
