Delaware, Singapore and the Mauritius route: an onshore haven, an Asian hub, and a closed door

Three jurisdictions that do not fit the island stereotype, and are all the more instructive for it. Delaware is a tax haven inside the United States, draining revenue from other American states. Singapore is a genuine financial centre that happens also to be one of the world's most effective holding hubs. And Mauritius is the textbook conduit: for thirty years it was the door through which the world's capital entered India tax-free, until India shut it. The mechanics of conduits and round-tripping live on their own pages; here we describe what these three places are for.

Delaware: the haven at home

The most-overlooked tax haven in the world is a small state on the eastern seaboard of the United States. Delaware has fewer than a million residents and more than two million registered legal entities, having passed the two-million mark in late 2023. It is a haven not against the US federal government, which taxes Delaware companies in full, but against the other US states.

The mechanism, known as the Delaware loophole, is simple. Delaware does not tax a holding company on income from intangible assets, such as royalties, trademarks and leases. So a company operating in a high-tax state sets up a Delaware holding company, transfers its brand or trademarks into it, and then has the operating business pay the Delaware company a licensing fee to use them. The fee is deductible in the high-tax state and lands tax-free in Delaware. The profit has moved from one US state to another without leaving the country. This is the same royalty logic set out on the IP and royalties page, run between states rather than countries.

Delaware adds the other classic haven feature, secrecy. The state does not require the owners, directors or officers of a company to be disclosed when it is formed; a single registered agent suffices, and incorporation can take less than an hour. The Institute on Taxation and Economic Policy documented the whole mechanism in a 2015 report, Delaware: An Onshore Tax Haven, and estimated that the loophole drains billions of dollars from other states.

There is a recent twist worth noting. The Corporate Transparency Act, signed into law in January 2021, was meant to end this anonymity by requiring US companies to disclose their real owners to the financial-crimes agency FinCEN. It has been heavily litigated, and in March 2025 the rule was narrowed so that it applies only to foreign reporting companies, leaving most domestic US shell companies outside it once again.

Singapore: the substantive hub

Singapore is different in kind from a zero-tax island, and the difference matters. It has a real economy, a deep financial market, the rule of law and a skilled workforce, which makes it a genuine place to do business as well as a place to hold companies. That substance is also what protects it: a structure routed through Singapore is far harder to attack as artificial than one routed through a brass plate, because real activity actually happens there.

Its tools are a flat 17% corporate rate that is in practice much lower for qualifying activities; a territorial system that taxes only income sourced in or remitted to Singapore; a one-tier system under which dividends are paid out tax-free; an exemption for qualifying foreign-sourced income already taxed at a headline rate of at least 15% abroad; no capital gains tax; around a hundred tax treaties; and targeted incentive regimes that tax qualifying financial-sector and regional-headquarters income at reduced rates of 5%, 10% or so. On the Corporate Tax Haven Index it ranks fifth in the world, with a haven score of 85.6.

Mauritius and the India route

Mauritius is the cleanest example of a pure conduit, and of a door being shut. Its offshore regime was set up by statute in 1992, allowing lightly disclosed shell companies, very low tax and strong asset protection. But the thing that made Mauritius matter was a single clause in its 1982 tax treaty with India. Article 13(4) of that treaty gave only Mauritius the right to tax the capital gains a Mauritian-resident company made on selling shares in an Indian company. Mauritius charged no capital gains tax. So the gain was taxed nowhere.

For more than thirty years, from 1982 to 2017, that clause was the gateway through which capital entered India. An investor would route money through a Mauritius company holding a tax-residence certificate, invest it into India as "foreign" investment, and, on selling, take the gain back tax-free. Where the money started out as Indian in the first place, the same route became round-tripping, domestic capital dressed up as foreign investment to claim benefits meant for foreigners. The full round-tripping mechanism is set out on the conduit jurisdictions page; the point here is the role Mauritius played.

India shut the main door with a Protocol signed on 10 May 2016. India regained the right to tax gains on shares acquired on or after 1 April 2017; a two-year transition to 31 March 2019 capped the rate at half the Indian domestic rate, subject to an anti-abuse condition; the full rate has applied since; and shares bought before 1 April 2017 keep grandfathered protection. India's Supreme Court tightened the position again in a ruling of 15 January 2026, holding that a Mauritian tax-residence certificate is not by itself conclusive and denying treaty benefits where the real control sat elsewhere.

Even so, Mauritius has not vanished from the map. It still carries a haven score of 79.6 on the Corporate Tax Haven Index and about 2.3% of the global total, reflecting its continued use for routes into Africa and for India structures that do not turn on capital gains. A closed door is not the same as a demolished building.