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Tax havens are not recent phenomena. However, in contrast to historical precedents, tax havens in the age of mobile capital allow for non-consensual transfers and are not profitable for every citizen. We discuss the four main groups of tax havens (former Western possessions, sovereign nations, countries controlled by cartels, and emerging economies). This article also synthesizes the history of tax havens and describes their current heterogeneity, discussing the main methods available to regulate tax haven flows. Some of the most efficient methods involve unilateral measures (such as the Fiscal Transparency of Outland Societies) but also encompass multilateral measures (such as Tax Harmonization and the Request for Information).

The estimation of sovereign risk indicators has a key role for the investment decisions. We were witnesses of inaccurate ratings before the last economic crisis, which altered significantly the results expected by many investors. Thus, we propose an improved rating estimation justifying the insertion of new variables, specifically, the shadow economy as a percentage of the GDP. We find that by taking it into account, the credit rating estimation improves. Our estimation assigns a higher sovereign risk to the new European Union member states, whereas the old European Union member states see their sovereign risk decreased.