Offshore companies that cater to well-heeled clients — ranging from individuals and families to large corporations and universities — are always in the news and persistently cloaked in controversy.
On the one hand, and as noted in a recent New York Times article on the use of foreign havens to avoid tax burdens, “setting up companies offshore is generally legal.” People and businesses with the means to do so routinely take advantage of laws and regulations around the world that yield them savings through the lawful avoidance of taxes otherwise imposed by the IRS.
On the other hand, though, tax authorities draw a hard line between what they construe as lawful behavior aimed at limiting taxes and strategies that seem to be fixed instead upon illegally skirting tax duties.
And, thus, a seemingly endless game plays out, with investigators constantly probing for inside details relevant to what the Times terms “complex offshore structures” that help clients shield large amounts of wealth.
Many of our readers likely remember the hype linked with the Panama Papers revealed back in 2015. Records traced to that country opened a window on the shadowy world of offshore havens.
The so-called Paradise Papers now seem poised to dwarf the document haul related to the Panama Papers. Reportedly, more than 13.4 million files are now open to scrutiny. Many of them are connected to a Bermudan law firm named Appleby that has for more than a century helped wealthy individual and institutional clients reduce taxes, set up trusts and promote other financial objectives.
Investigators’ focus concerning the Paradise Papers will unquestionably be upon tax evasion.
Appleby almost seems to welcome close scrutiny. The firm notes that it is already “subject to frequent regulatory checks” and that no evidence exists whatsoever to signal wrongdoing on the part of the firm of any of its vetted clients.