3
$\begingroup$

I'm reading a book called "The Laundromat" about Mossack-Fonseca and The Panama Papers "scandal" (was it really a scandal;?).

I understand the point of having an offshore company and offshore bank account. You use it to "own" money that you don't want to pay taxes on, or don't want other people to know about.

But how do you get money into these companies. I would think that even if you created an anonymous company to serve as a tax haven, there would be a record of YOU sending money to this company, so is it really that anonymous? How do people wanting the anonymity of an offshore account avoid the paper trail of getting the money TO the account in the first place?

It would help me understand this book better if I knew this.

$\endgroup$
1
  • $\begingroup$ The trail to the offshore does not need to be concealed. Once it's offshore the 'scent' is lost and the money can go wherever it wants--even back to the same place it originated from--but it will appear to be different money. $\endgroup$ – amdopt Jan 29 at 14:22
1
$\begingroup$

Nothing very technical, offshore accounts are based on legal tools created by law firms specialized in offshore banking located in tax heavens (such as Mossack-Fonseca). They will create layers of shell companies (funds, trusts, foundations, LLP) across multiples tax heavens with one or multiple "straw men". Those people are owners of your shell company but they don't have access to the bank accounts. In order to prosecute, it will be a legal nightmare for the justice to found the real identity of the account in each country (for example Delaware > Netherlands > Virgin Island > Panama). And most of the time, the final straw man is a citizen of Panama and cannot be persecuted by the justice of foreign countries.

Therefore, you just need to fit their "standards" in order to be accepted with your passport and a lot of money to be protected by the bank's secrecy. : )

Simpler and risker option, I heard a long time ago in Basel that if you have a friend with Swiss citizenship. He/she can create a bank account, then give you full access. Your friend and you can then reach a legal agreement with the bank to be the sole user of the bank account.

$\endgroup$

Not the answer you're looking for? Browse other questions tagged or ask your own question.