The Panama Papers: Are All Offshore Jurisdictions The Same?

Massive leak of documents from a Panama law firm Mossack Fonseca has made it to the top news early this month, revealing millions of shell companies owned by politicians, wealthy people and celebrities.

Country leaders, for example the Iceland Prime Minister, Davíð Gunnlaugsson who resigned earlier this week, appeared as one of the many names involved in the creation of offshore companies assisted by Mossack Fonseca.

Not only country leaders, the law firm also assisted relatives or associates of country leaders, politicians, and relatives of politicians to setup shell companies in tax haven jurisdictions. See the full list of power players.

Jacky Chan, Simon Cowell, Lionel Messi, and Paul McCartney’s widow are several names among celebrities and famous public figures.

The leaked documents, however, do not show the purposes of the offshore companies, such as tax dodging, bribery or other illegal activities.

The most-mentioned jurisdictions are the British Virgin Islands, Panama, the Bahamas, Seychelles, Niue, Samoa, Anguilla, Nevada (USA), Hong Kong, and Britain.

Bermuda, which has been perceived as one of offshore destinations by some people, is not in the Panama Papers’ top ten list. The Bermuda Business Development Agency (BDA) has emphasized that Bermuda’s laws comply with global anti-money laundering directives, anti-terrorist financing standards, and that Bermuda has positive global reputation for transparency.

Bermuda is a proud owner of Solvency II equivalence award, thanks to its tax regime. Till date, only two non-EU countries have gained the distinction. In addition, Bermuda is deemed as “qualified” jurisdiction by the US National Association of Insurance Commissioners.

Therefore, instead of ‘homogenising’ offshore centres, BDA stated that Bermuda is different and is committed to become a safe and transparent place for international investors to manage their assets and wealth.