Companies at the heart of ‘Pandora Papers’

Companies at the heart of ‘Pandora Papers’

PARIS: Offshore companies are a lynchpin in the system used by leaders and the ultra-rich to hide assets that was exposed in the trove of leaked documents dubbed the “Pandora Papers”. Some 11.9 million documents from financial services firms, which were obtained by the International Consortium of Investigative Journalists (ICIJ), showed how the elite used tax havens to stash assets worth hundreds of millions of dollars. So what is an offshore company and how are they used?

What is an offshore company?

An offshore company is one created in a jurisdiction other than where its owner is incorporated or resides. The term is usually considered to apply where the company has no business operations in the country where it is registered, and is created to take advantage of the low (or no) taxes, lax regulation and secrecy that the country offers.

While remote, often tropical islands were long the image of offshore havens-think the Caymans or British Virgin Islands-that is no longer necessarily the case. The US state of Delaware has long been popular for creating companies for the secrecy it offers, while South Dakota has emerged as a top spot for creating trusts for the same reason. Offshore companies are big business.