Tax-Haven Subsidiaries, Categorically Referred to as International Offshore Financial Centers

question 1

Multiple Choice

Tax-haven subsidiaries, categorically referred to as International Offshore Financial Centers, have the following characteristics EXCEPT

• A) a low tax on foreign investment or sales income earned by resident corporations and a low dividend withholding tax on dividends paid to the parent firm.
• B) a stable currency to permit easy conversion of funds into and out of the local currency. This requirement can be met by permitting and facilitating the use of Eurocurrencies.
• C) a stable government that encourages the establishment of foreign-owned financial and service facilities within its borders.
• D) All of the above are tax-haven subsidiary characteristics.

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Definitions:

Mortgagees

Lenders or financial institutions that provide funds for a mortgage loan, holding the property as collateral until the loan is repaid.

Tenants

Individuals or entities that hold a leasehold interest in a property, granting them the right to occupy and use the property according to the terms of their lease agreement.

Assumes a Mortgage

The act of taking on the obligation to pay an existing mortgage, typically as part of a property purchase.

Latent Defects

Hidden or concealed flaws in property or goods that are not readily observable or discoverable through reasonable inspection.