Sark is the fourth smallest of the Channel Islands, just six miles from Guernsey. It is roughly three miles by one-and-a-half and has a population of 550.

It is a small independent state, and one of the last remaining feudal states in the western world. Its constitution dates back to 1565 and while recognising the British Crown, it is not a sovereign state and is not part of the the United Kingdom.

Sark has its own governing body and is free from many of the tax restrictions and exchange controls that apply to the other channel islands.

The tiny island is governed by a council made up of 40 of the island's landowners, and is headed by the heritery Seigneur, or Lord of Sark. He holds Sark in perpetuity from the British sovereign.

The island has virtually no tax legislation and residents are not liable to tax on income arising within Sark or from investments where tax is not charged at source. It does enforce two taxes though: a property tax assessed on buildings held in Sark, and a "visible wealth tax" based on monies and investments and possessions, but applies only on an arbitrary basis.

It raises most of its income from visitors to the island, through a relatively modest tax which is levied on alcohol and tobacco, and a landing tax which is included in ferry prices.

The easygoing approach to life on the island ensures that it can offer investors a highly attractive tax regime under which they can do business and guarantee confidentiality.