How can a politician hide her inheritance away? Find out in an offshore adventure!
Welcome to the secret world of offshore. Your goal is to navigate this parallel universe and hide your cash away. Don’t worry! Lawyers, wealth managers and bankers are there to help you.
Polly Tissien
Politician
Your political star is on the rise!
After years spent climbing the ranks of your party as a member of Parliament, you have finally risen to prominence as a key political player and potential future leader.
Sadly, your father passes away. A controversial political figure in his own right, he leaves behind a small fortune amassed quietly during his years in the pharmaceutical industry after his years as the industry’s advocate in Parliament. His estate includes a secret multimillion-euro Swiss bank account which he bequeaths to you. After careful consideration, you decide not to disclose this secret account lest it raise questions about your connections to your father’s controversial past...
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It’s 2005. A bill called the European Savings Directive (ESD) comes into effect. Banks are now legally obliged to withhold taxes from the accounts of their European customers.
No need to worry just yet – Switzerland refuses to reveal the identity of its banking clients, so your account will remain secret for now. But as a European citizen, you will have to pay tax on any interest you earn. Your financial adviser suggests two options.
Create an offshore company
Keep the bank account
It gets worse. A few years later Switzerland is pressured by OECD countries to end bank secrecy. Your Swiss banker strongly advises you to transfer ownership of this account to an offshore company if you want your identity to remain a secret.
Create an offshore company
The law firm handling your company’s affairs wants to verify your identity and run a background check process called “Know Your Client" (KYC) or due diligence.
If your identity as a prominent politician from a controversial family is revealed, the law firm might refuse to act as registered agent of Family Secrets Ltd.
They ask for a copy of your passport
Hand over a copy of your passport
A few years pass and you decide to run for president. Congratulations, you win! Muckraking journalists and political opponents will now be looking closely into your finances.
Worried about what they might find, you decide to distance yourself further from your Family Secrets Ltd – but how? You could sell your shares to your husband, or you could pay to have a private foundation become the shareholder of the company.
Sell your shares
Opt for a foundation
The public face of your private foundation is a council filled with nominees provided by the law firm handling your company’s affairs, ensuring your name will not appear on any public documentation.
But your political opponents catch wind of a Swiss account left by your father and tip off a reporter about your secret stash of cash.
Come clean
Deny
Thankfully for you, private foundations offer robust ways to hide your identity. The law prevents your registered agent from revealing the true owner of the Behind Closed Doors Foundation, even to authorities.
Your secret is safe! You use that money to buy a villa in the Antilles, where you sip prosecco and watch the children play from the palm-shaded veranda.
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Source:
https://panamapapers.icij.org/stairway_tax_heaven_game/
