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Catch Me If You Can

Trillions of dollars are stashed in offshore accounts, experts estimate. That cuts governments out of hundreds of billions of tax dollars. Congress estimates the U.S. Treasury alone loses $100 billion annually. Hiding so much money sounds like work, but in some ways, it's like taking a vacation. Here's a quick tour of some of these hiding places, some of them little more than a mailbox in an out-of-the-way place.

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Bahrain

This Persian Gulf island, said to be the site of the biblical Garden of Eden, is a modern-day paradise for multinational firms: moderate politics and no corporate or personal income tax. The Heritage Foundation's 2008 Index of Economic Freedom ranks Bahrain top in the Middle East—and 19th globally (just above Belgium)—for having the freest economy.

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Cayman Islands

Legend has it that this trio of islands once sheltered pirates and that Blackbeard buried his treasure here. Today, the Caymans play host to most of the world's hedge funds. The hedgies may live the good life in Greenwich, Connecticut, and Manhattan, but their funds' legal home is probably here. Among their onetime neighbors in the Caymans: 692 fraudulent shell companies owned by Enron.

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Jersey

Just 15 miles northwest of France, these islands are especially beloved by British companies for their zero corporate-income and zero capital gains tax rate. Jersey, the largest island, has $400 billion in bank deposits, most of which do NOT belong to its 90,000 residents. Guernsey is a magnet for intellectual property developed elsewhere, like pharmaceutical patents.

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Cyprus

This Mediterranean island is an international maritime hub with one of the largest commercial ship fleets in the world. No wonder: Cypriot corporations are subject to a tax rate of just 10 percent. Companies with ocean liners and tankers sailing under the island's olive-branch flag pay zero taxes on income and dividends.

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Gibraltar

This 2.5-square-mile British territory, which levies no taxes on capital gains, is home to 28,000 people—as well as 28,000 registered companies and 19 banks. Neighboring Spain, which is fuming over Gibraltar's alleged refusal to help stop Mob-related money laundering, is urging the O.E.C.D. to put Gibraltar back on an international blacklist of “uncooperative tax havens."

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Isle of Man

For long home to corporate subsidiaries as well as trusts controlled by wealthy families, this rainy, windswept island in the Irish Sea has also become a favorite destination for online gaming and gambling companies. That might be because doing business here is like hitting the tax-savings jackpot: There are no taxes on corporate income, capital gains, or estates.

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Liechtenstein

Every year, the O.E.C.D. blacklists this monarchy in the Alps for its refusal to cooperate with other countries in tax-evasion investigations. But only recently did Liechtenstein make world headlines for slapping down Germany when the giant asked for help in uncovering massive tax fraud. Nein, said Liechtenstein, dismissing the incriminating evidence as no good because it had been stolen.

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Mauritius

This tropical Valhalla near Madagascar, off the southeastern coast of Africa, is a popular stopover for foreign money destined for India and China. Thanks to special treaties, Mauritius-based companies doing business in the two Asian nations face much lower tax rates. According to one estimate, capital from this flyspeck island now accounts for nearly half of all foreign investment in India.

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Monaco

You could get lucky at craps at one of the Riviera principality's gilded casinos. But a surer bet to boost your wealth is to move there instead. Home to financiers and glitterati like actor Roger Moore, Monaco levies no taxes on income, capital gains, or estates. It's also a perennial on the O.E.C.D. blacklist for refusing to share data with other nations trying to crack down on tax cheats.

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Panama

Known as the Switzerland of the Americas, Panama is one of the biggest offshore banking centers in the world. The country's zero-tax policy on foreign income has made it a magnet for retirees as well as shell companies. The C.I.A. World Factbook calls Panama a ?major cocaine transshipment point and primary money-laundering center for narcotics revenue.?

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Vanuatu

This family of 83 islands in the South Pacific, best known for hosting the ninth season of Survivor, the reality TV show, is also the closest tax haven to Australia. Enduring frequent hurricanes and in the shadow of active volcanoes, residents and companies incorporated there pay no income tax and no capital gains tax. There are also no gift or estate taxes.

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Virgin Islands

This Caribbean archipelago is not only a playground for bikini babes but also tax-shy businesses. To spur economic development, the U.S. offers a 90 percent discount on federal taxes for companies setting up shop in its half of the island group: St. Croix, St. John, and St. Thomas. The other half, which Britain administers, includes Tortola and has more than 300,000 shell companies.

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