Panama Papers: Everything you need to know about how and where rich people hide their money

Hatton Garden raidGettyThis handout image supplied by the Metropolitan Police, shows a view of the hole drilled in the vault wall at Hatton Garden Safe Deposit Limited following the Easter weekend robbery, April 2015 in London, England.

All eyes are on the International Consortium of Investigative Journalists’ huge database, dubbed the Panama Papers, which shows how some of the world’s wealthiest and most powerful people legally hide their cash.

The database consists of of 200,000 companies, trusts, foundations, and funds incorporated in 21 countries.

Business Insider has already shown where some of the world’s largest banks legally hide cash for rich clients and who are the key individuals and companies in the US and Britain that are within the files.

The findings are a huge deal. 

Over 11 million documents held by the Panama-based law firm Mossack Fonseca were leaked to the German newspaper Süddeutsche Zeitung, which shared the information with the ICIJ, an organisation made up of 107 media companies in 78 countries.

The global news outlets examined 28,000 pages of documents, also revealing the full scale of the tax breaks won by 340 companies.

The ICIJ published this statement on its website along with the documents: “There are legitimate uses for offshore companies and trusts. We do not intend to suggest or imply that any persons, companies or other entities included in the ICIJ Offshore Leaks Database have broken the law or otherwise acted improperly.”

So using some of the materials from ICIJ, Business Insider did a quick run down of everything you need to know about how and where companies and individuals — while working with law firms and banks — sheltered their money.

The number of incorporated offshore companies saw a sharp fall in 2010 when some governments around the world pledged to crack down on tax avoidance.

ICIJ

As you can tell, while hiding cash in offshore tax havens is perfectly legal, the political scrutiny can cause a lot of damaging PR for companies and high-net worth individuals. This led to many places shutting down funds.

ICIJ

The law firm at the centre of the data leak worked with companies and individuals to funnel money into companies, foundations and trusts in order to save on tax payments they would otherwise pay on a straight income and corporation tax basis.

ICIJ

One of the ways to maintain the highest level of secrecy is for law firms like Mossack Fonseca to make sure companies hold 'bearer shares' -- a security that is wholly owned by whoever holds the physical stock certificate so therefore the real 'owner's' name doesn't need to be made public.

ICIJ

Mossack Fonseca had to move over bearer share clients, when the British Virgin Islands abolished them in 2005, to other jurisdictions. Here are the most popular other places.

ICIJ

And here are the banks that requested services for legally hiding cash for wealthy clients. Unsurprisingly there are quite a few Swiss banks -- which are famed for their banking secrecy laws.

ICIJ

The intermediaries that would liaise with the law firm the most originated from Hong Kong, Switzerland and Britain.

ICIJ

British Virgin Islands is the number place that Mossack Fonseca would incorporate companies. Panama is actually second most popular.

ICIJ

But offshore companies are slowly disappearing due to the level of governmental scrutiny during G20 talks about cracking down on tax avoidance. Also, ICIJ said that 'records show that offshore companies are normally only active for a short amount of time.'

ICIJ

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