Skip to main content

FAQs on Panama Papers

1. What are the 'Panama Papers'?
The 'Panama Papers' are a set of confidential documents leaked from one of the biggest law firms of Panama - 'Mossack Fonseca'. The Panama Papers provide information about thousands of offshore entities, identities of their shareholders and directors. It listed various world leaders, public officials, billionaires, celebrities, sports stars and politicians.

2. How much data has been leaked and by whom?
a)  The leaked data consists of 11.5 Million Documents in around 2,600 GB taken from the Mossack Fonseca's internal database by one of its employees.
b)  These documents were obtained by Sueddeutsche Zeitung, a daily newspaper headquartered in Munich, Germany. Sueddeutsche shared the Panama Papers with the Washington-based International Consortium of Investigative Journalists (ICIJ) and other news outlets, including the BBC, the Guardian and the Indian Express.
c)  Sueddeutsche mentioned that an employee at the law firm had leaked the data, telling the newspaper that he had risked his life in doing so.

3. What does the Panama Papers reveal?
a)  The Panama Papers contain information on 2.15 lakhs offshore entities connected to people from more than 200 countries.
b)  The leaked data covers nearly 40 years period from 1977 through the end of 2015.
c)  It reveals the database of individuals who have set-up offshore entities through the Panama law firm.
d)  These individuals are either holding direct ownership or indirect ownership (beneficial ownership) in the offshore entities.
e)  Some of the Indians have also floated offshore entities at a time when foreign exchanges laws of India did not allow them to do so.

4. What is the authenticity of documents leaked?
Ramon Fonseca, one of the co-founder of the Mossack Fonseca, confirmed the authenticity of the papers being used in articles published by more than 100 news organizations around the world. He told to one of the Panama's news channel that the documents are real and were obtained illegally through a hacking method.

5. Who is 'Mossack Fonseca' and what is its role in this entire controversy?
a)  Mossack Fonseca & Co. is a law firm and corporate service provider based in Panama with more than 40 offices worldwide.
b)  It specializes in commercial law, trust services, investor advisory and international structures.
c)  It provides services like incorporating companies in offshore jurisdictions, wealth management, private banking, accounting services, etc.
d)  This law firm is one of the seven firms that collectively represent more than half of the companies incorporated in Panama.
e)  It also provides assistance in transferring funds, buying property, setting-up trusts or signing agreements with entities.
f)  Mossack Fonseca plays a crucial role in incorporating entities in tax havens. It had incorporated 14,658 active companies in Panama till August, 2013 out of which 4,646 companies were incorporated without providing any information about their shareholders.

6. How entities incorporated in Panama provide secrecy about the beneficial owners?
a)  Panama offers the most favorable and most flexible company incorporation laws available in the world. Private Interest Foundations are also available, and are one of the most widely used estate planning structures in the world today.
b)  Panama is the registered domicile for over 400,000 corporations & foundations, making it one of the most popular jurisdictions in the world to incorporate.
c)  Panama does not impose any reporting requirements for non-resident Panamanian corporations.
d)  Panama does not allow "piercing the corporate veil".
e)  Panamanian corporations share certificates can be issued in Nominative or Bearer form (anonymous form of ownership), with or without par value.
f)  Panamanian Companies can have directors, officers and shareholders of any nationality and resident of any country.
g)  The offshore entity in Panama need not appoint natural persons as directors or have individuals as shareholders.
h)  Neither the directors nor the officers of Panamanian corporations need to be shareholders. Meetings of directors, officers, and shareholders may be held in any country and accounting books may be kept in any country.
i)  It is not necessary for the interested parties to be present in Panama for the purpose of establishing a corporation. Corporations conducting business outside of Panama do not require a commercial license for offshore business activities.
j)  Registered Panamanian Agents offers its own executives to serve as shareholders or directors. Sometimes an intermediary law firm or a bank acts as a director or a nominee shareholder. So the real beneficiary remains hidden.
k)  The registered agent provides an official overseas address, a mail box, etc., none of which traces back the entity to the beneficial owner.

7. What are the key advantages of incorporating a Panamanian Company?
a)  The incorporation process is fast and can be achieved in 3 days.
b)  The identity of the shareholders is not publicly available.
c)  Nominee and bearer shares are allowed.
d)  There are no currency restrictions although the US dollar is regularly used.
e)  The transfer of shares can be done freely, which facilitates the transmission of assets in a confidential manner.
f)  The shareholders, directors and officers can be of any nationality and residents of any country.
g)  Meetings can be held in Panama or in any jurisdiction, subject to tax advice.
h)  Accounts do not need to be held in Panama.

8. What are Panama foreign exchange rules?
a)  Panama's circulating currency is the US Dollar, and Panama has no currency exchange controls or currency restrictions, so funds can flow in and out of the country freely.
b)  Panama uses the U.S. dollar as its legal currency, instilling tremendous fiscal and monetary discipline while keeping inflation very low - under 2 percent for the last 40 years.
c)  Panama has no restrictions on monetary remittances abroad, including dividends, interests, branch profits and royalties. No restrictions on funds flowing in or out of the country.
d)  A dollar economy insulates Panama from global economic shocks. During the Asian monetary crisis of 1998, Panama became one of the healthiest economies in Latin America.

9. How secure is banking infrastructure of Panama?
a)  Panama is one of the most secure offshore financial center - where privacy and confidentiality is vigorously protected by constitutional law.
b)  Panama offers the best bank secrecy and corporate book secrecy laws in the world.
c)  Panama has no provision for "piercing the corporate veil".
d)  Revealing banking information to third parties is a crime, punishable by prison.
e)  Panama has no mutual legal assistance treaties (MLAT's) for sharing of banking information with any other nation and does not recognize court rulings from other countries.
f)  Panama City is home to the second largest   international banking center in the world next to Switzerland. Panama has the most modern and successful international banking center in Latin America, with more than 150 banks from 35 different countries.
g)  Approximately 150 international banks are located in Panama. Total assets in Panamanian banks are over US$150 billion.
h)  Some of the banks present in Panama's banking center are: Citibank, HSBC, Dresdner Bank, Bank of Tokyo, Bank of Boston, Banco Nacional de Paris, International Commercial Bank of China, Societe Generale, Banque Sudameris, BBVA, Banco Uno, Banco General, PriBanco, Banco del Istmo, Global Bank, MultiCredit Bank, PanaBank, ABN Amro, Banco Aliado, Banco Continental, BancoLat, BIPAN, Lloyds TLB Bank, Bank of Nova Scotia BIPAN, Bank of Nova Scotia, and much more.

10. Why an offshore company is incorporated in Panama or other tax havens?
a)  Shell Companies are non-operational companies. These are legal entities having no independent operations, significant assets or employees.
b)  It is not time consuming or expensive to establish anonymous shell corporation. Agents charge fees of $800 to $6,000 as upfront cost and an annual charge for formation of companies and other additional services.


Popular posts from this blog


CONTENTS SR. NO. CHAPTER PAGE NO. INTRODUCTION STOCK & RECEIVABLES AUDIT VERIFICATION OF STOCK & DEBTORS PROCEDURE OF STOCK AUDIT VERIFICATION OF SECURITIES ANALYTICAL REVIEW INTERNAL CONTROL QUESTIONNAIRE STOCK b) BOOK DEBTS LIST OF DOCUMENTS TAKEN AS WORKING PAPERS SPECIMEN INSPECTION REPORT SPECIMEN MANAGEMENT REPRESENTATION LETTER CHAPTER 1 INTRODUCTION: Banking is an important sector of the economy of any country and for the development of the economy a healthy banking system is a must. After the liberalization of the economy, the banking system has undergone a total change in India. There is hard competition in the banking industry to survive in the current circumstances. With the purpose to have better financial discipline & to ensure uniformity in accounting norms RBI introduced the concept of assetclassification & income recognition as per the recommendations of Narasimhan Committee. It was also suggested to classify the advances given by banks into Performing & Non Perfor…

Excel Add-in to convert amount in figures to words by Premal

AmtInWords.xla is attached to this mail. It is an MS Excel Add-in written by me to convert amount available in figures to words.
Copy the attached file to the folder where excel stores the add-ins. (To know where excel stores the add-ins, open any workbook, click on Tools - Add-ins - Browse)
Then open an excel workbook. Click on Tools - Add-ins - Browse - Give the path to this Addin - Ok
You can use the functions AmtInWords and AmtInWordsUS in any worksheet. The syntax is:
=AmtInWords(decimal number/cell reference, [currency code])
=AmtInWordsUS(decimal number/cell reference, [currency code])
Examples follow:
=AmtInWordsUS(B3) ' Shall give the amount in millions (US format)
=AmtInWordsUS(B3,"USD") ' Shall give the amount in millions (US format) and in US currency (Dollars)
=AmtInWords(C4,"GBP") ' Shall give the amount in lakhs and in UK currency (Pounds)
The system shall N…

Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016?

*1. What is Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016?*Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016 is a scheme notified by the Government of India on December 16, 2016 which is applicable to every declarant under the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.*2. Who is eligible to deposit in PMGKS?*The deposit under this Scheme shall be made by any person who declared undisclosed income under sub-section (1) of section 199C of the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.*3. In what form will the deposits under this scheme be held?*The Deposits shall be held at the credit of the declarant in Bond Ledger Accounts (BLA) maintained with Reserve Bank of India.*4. Who are the authorized agencies where the application and amount of deposit will be accepted?*Application and amount for the deposit (in the form of Bond Ledger Account) shall be received by any banking company to which the Banking …