Panama has been the focus of relentless critical attention since the leak of documents from the law firm Mossack Fonseca.
Some may have gained the impression that the revelations suddenly elevated the small Central American state to the status of the ultimate tax haven for investors intent on hiding their wealth, legally or otherwise.
Yet not only is Panama far from being alone in offering a welcoming financial environment to individuals and corporations eager to minimise their obligations and remain protected from public gaze. It is not even among the top 10 nations identified by lobby groups challenging financial secrecy.
A BBC report suggests the wealthy can easily hide their money elsewhere. Its league table puts Switzerland, Hong Kong and even the US as frontrunners, followed by Singapore, the Cayman Islands and Luxembourg.
Hong Kong and Singapore, for example, do not levy capital gains tax. Hong Kong taxes employees’ shares and options but a mutual fund holding assets, including stocks and bonds in those locations, would be free of tax.
While beneficiaries would still be liable in their own fiscal domiciles on investment profits “brought onshore”, even this taxation is mitigated assuming the investor saw no need to move the gains in most years.
Investors will also shop around for the most appropriate jurisdiction for their holding companies, choosing locations with knowledge of their area of business as well as providing friendly corporate and fiscal structures.
The eventual verdict on the Panama Papers seemed certain to distinguish between prudent but innocent financial management and downright illegality, as well as much that lies between.
The leaked data is an extraordinary set of more than 11 million documents dealing with the affairs of 214,000 companies. Public figures in several countries are among those whose financial arrangements were exposed, with half the affected companies based in the British Virgin Islands and a high proportion of banks, lawyers and intermediaries traced to Hong Kong.
“The Panama Papers have placed the spotlight on the world of offshore bank accounts, shell companies and tax havens,” said Roger Wohlner of the Investopedia website.
He said clients often had valid reasons for wanting an offshore account or company and urged financial advisers to seek specialist legal guidance to ensure “all arrangements are done correctly and legally” to avoid being caught up, even innocently, in attempts to identify those suspected of tax-dodging.
Mr Wohlner said the Panama Paper disclosures may cause new rules or laws to be enacted, making it more difficult to shelter money offshore. But he also said “the wealthy will still find a way to do this in some fashion”.
Mossack Fonseca itself has declared itself entirely innocent of wrongdoing.
newsdesk@thenational.ae
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
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UAE currency: the story behind the money in your pockets
Three tips from La Perle's performers
1 The kind of water athletes drink is important. Gwilym Hooson, a 28-year-old British performer who is currently recovering from knee surgery, found that out when the company was still in Studio City, training for 12 hours a day. “The physio team was like: ‘Why is everyone getting cramps?’ And then they realised we had to add salt and sugar to the water,” he says.
2 A little chocolate is a good thing. “It’s emergency energy,” says Craig Paul Smith, La Perle’s head coach and former Cirque du Soleil performer, gesturing to an almost-empty open box of mini chocolate bars on his desk backstage.
3 Take chances, says Young, who has worked all over the world, including most recently at Dragone’s show in China. “Every time we go out of our comfort zone, we learn a lot about ourselves,” she says.
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Company Profile
Founder: Omar Onsi
Launched: 2018
Employees: 35
Financing stage: Seed round ($12 million)
Investors: B&Y, Phoenician Funds, M1 Group, Shorooq Partners
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Director: Kangana Ranaut
Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry
Rating: 2/5
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Sholto Byrnes on Myanmar politics
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COMPANY PROFILE
Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
