a) No or low taxes on all or certain types of income and capital. The main purpose of an operation involving tax haven is to obtain benefits in taxation, taking advantage of its no or lower taxation. Thus, there may be extremely low or no capital gains or transfer tax, gift, death or estate duties. The difference in the level of taxation between jurisdictions is determinant to decide whether a tax haven should be used and, if so, which one. The no or nominal tax criterion is not sufficient, by itself, to result in characterization as a tax haven. The OECD recognized that very jurisdiction has a right to determinate whether to impose direct taxes and, if so, to determinate the appropriate tax rate
b) Bank and commercial secrecy. Tax havens generally allow secrecy or confidentiality to operations in or through them. Many jurisdictions offer protection to banking affairs and other financial transactions from divulgence to foreign tax authorities, and some of them have also enacted secrecy or confidentiality provisions. Generally, classical tax havens do not require the production of companies’ annual accounts. Transparency ensures that there is an open and consistent application of tax laws among similarly situated taxpayers and that information needed by tax authorities to determine taxpayer’s correct tax liability is available.

c) Lack of exchange controls. Many tax havens developed a dual currency control system, under which residents are subjected to both local and foreign currency controls and non-residents, only to the local currency controls. Companies set up in a tax haven are treated as non-residents for exchange control purposes and their operations conducted outside the tax haven, in foreign currency, are not subjected to exchange controls. These rules are purposely designed to facilitate the use of tax havens.
d) Relative importance of banking. In classical tax havens, the banking sector gives different treatment to residents and non-residents, suppressing or smoothing controls and imposing lighter or no taxation on the latter. The existence of a modern and efficient banking system is essential for the success of a tax haven and, for this reason, greatly stimulated. Thus invariably, the volume of banking business is totally unrelated to the size and needs of the domestic market. Financial activity generates revenue for the tax haven, which also benefits from the generation of employment the tax haven, which also benefits from the generation of employment and the rental of local facilities, and creates an infrastructure which can be used both by fraudulent and legitimate business.
e) Communications. Tax havens must be accessible physically and have facilities to deal with information. Thus, it is necessary an infrastructure that provides good means of transportation (such as air or sea connections) and networks such as post, telephone, cable and satellite communication, which are especially important to financial and banking activities in tax havens.
f) Other aspects. A tax haven must have political and economic stability. Lack of political or economic confidence has prevented some places from becoming a tax haven and may endanger the future of places regarded as tax havens. The existence of tax treaties and double taxation agreements is other aspect which makes a tax haven attractive. Having a good treaty network with important countries prevents incomes channeled to the tax haven country from being excessively taxed at the source. The availability of competent professional advisers, such as accountants and lawyers, is also crucial to a company that wants to set up operations in a tax haven.