Forget about Panama: It’s Easier to Hide Money in the States

Tax HavensSurprises involving the Panama documents scandal, the little number of concerned Americans. So what is the reason? Perhaps because the founding of a company or interface in the United States is much more easier as getting a library card.

We have found that 200 people with US addresses are dealing with Mossack Fonseca Office, the company that revolves around the Panama documents leaks. And compared to other countries such as China, Switzerland, Russia, the United Kingdom, and the remaining part of the United States is relatively small.

Such irony shows the ease of the creation mode that allows concealing money and identity in the United States to the extent eliminate the need to tinker through Panama.

In every state in the United States, a LLC Company (limited liability company) can be established or any other legal entity without permission of the identity of the beneficial owner. This process is easy in some states more than others: Delaware, Nevada and famous Wyoming. The same story in Texas and Florida. The information required to open a front company in the United States is less than those required to individuals to obtain a driver’s license or library card.

The Tax Justice Network

Justice NetworkIn 2015, “Justice Network” published the order of the most attractive tax havens for those who are looking to hide their assets, ranking American States at the third place, beating Cayman and Singapore. The first place and the second most favorable tax havens for the rich goes to Switzerland and Hong Kong. Panama came to the 13th place, 10 ranks after the United States!

Delaware is proud of being the capital of companies founding in the United States. More than 1.000.000 trading company took Delaware as a legal base. And more than 50% of the publicly traded in the United States, including 64% of the 500 companies listed on the list of “Fortune” chose Delaware to establish its business.

Delaware is not a real tax haven. But it’s the place where the majority of US companies are established, as a result of very intelligent system of law firms, according to Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware (the John L Weinberg Center for Corporate Governance).

In his view, you can not blame the entire system simply because some individuals and companies have chosen the state to establish front companies.

These companies can be used for many reasons. Through this front company, we can anonymously purchase, for example, a piece of land without firing a warning to the competition. Or create an entity to protect future commercial rights or the establishment of a holding company for multiple companies. You can also use these companies legitimately to make political contributions without declared name.

The problem is that this combination makes it easier for people to hide assets and suspicious funds.

In this context, “Transparency International” has called US Congress to pass a transparency law in the establishment of companies and law enforcement (Incorporation Transparency and Law Enforcement Assistance Act) and made by a member of Congress, Rep. Carolyn Maloney and Senator Sheldon Whitehouse. If enacted, this bill asks states to collect, save and update information about the true ownership of all companies that have been created in the United States.

However, a lot of very influential pressure groups are against this bill, while taxes specialists are still skeptics about the success of such a law.

In the wake of the Panama scandal sheets, the number of front companies in the United States has known a growth. Instead of  looking between Belize, Panama and the Cayman Islands to mislead their money, individuals and companies can be accepted into the United States.

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