| Shell corporation | A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets, such as intellectual property, or ships. Shell companies may be registered to the address of a company that provides a service setting up shell companies, and which may act as the agent for receipt of legal correspondence (such as an accountant or lawyer). The company may serve as a vehicle for business transactions without itself having any significant assets or operations. Sometimes, shell companies are used for tax evasion, tax avoidance, and money laundering, or to achieve a specific goal such as anonymity. Anonymity may be sought to shield personal assets from others, such as a spouse when a marriage is breaking down, from creditors, from government authorities, besides others. |
| Countries of domicile | Typical countries of domicile of shell companies are offshore financial centers like Ireland, Liechtenstein, Luxembourg, Switzerland, Isle of Man, and the Channel Islands including Guernsey and Jersey in Europe, Bahamas, Barbados, Bermuda, Cayman Islands, and Virgin Islands in the Caribbean, Panama in Central America, and Hong Kong and Singapore in Asia. Delaware (where over half of publicly-traded US corporations are registered), Nevada, and Wyoming also offer advantageous tax regimes. |
| Offshore Leaks | In 2013 the International Consortium of Investigative Journalists published a report called "Offshore Leaks" with information about the use and owners of 130,000 shell companies. Many of the shell companies belonged to politicians and celebrities from around the world and were being used for tax evasion and hiding financial assets. |
| Panama Papers | The Panama Papers (Spanish: Papeles de Panamá) are 11.5 million leaked documents that detail financial and attorney–client information for more than 214,488 offshore entities.[1][2] The documents, some dating back to the 1970s,[3] were created by, and taken from, Panamanian law firm and corporate service provider Mossack Fonseca.
The documents contain personal financial information about wealthy individuals and public officials that had previously been kept private.[5] While offshore business entities are legal (see Offshore Magic Circle), reporters found that some of the Mossack Fonseca shell corporations were used for illegal purposes, including fraud, tax evasion, and evading international sanctions. |
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