If You Are Outed by Pandora Papers, Are You a Money Launderer?

Pandora Papers : If Outed, Are You a Money Launderer?

The tone of media reports on Pandora Papers and it’s Panama predecessor indicate there’s something illegal about owning a company in offshore financial centres.

There seems of be an underlying public presumption of guilt if you are named in the Pandora Papers.

But as Veerinderjeet Singh of Tricor Group explains on BFM 89.9, the setting up of offshore companies is perfectly legitimate.

I can give a personal example. If I were to die tomorrow, the US government will charge an estate duty of 40% on the value of all the US shares I own. This is in spite of me having no other connection to the US.

Yes, I was shocked to learn of this.

The way around this? Set up an off-shore company owned by me. Then buy the US shares in the name of that offshore company.

If I die, my family will inherit my shares in that offshore company. The offshore company can continue to hold the US shares. No estate duty incurred.

It’s simply estate planning. Completely legitimate, rational, and if I can say so, morally irreproachable (I earned the money legitimately through my entrepreneurial endeavours, paid Malaysian government taxes on it, why should 40% of it be taxed by a government that has not provided me any services but simply because I invested in their financial markets?).

I’m told it’ll cost you about RM6000 annually to cover the cost of an offshore company. Expensive? For many yes. The province of the Uber-rich? Err, no.

Veerinderjeet says that before jumping to conclusions on the Panama Papers, examine the source of the funds that set up the offshore company in the first place. If the source is legal, all good and fine. If the source is illegal, then start prosecuting. You can hear his rationale here: https://www.bfm.my/podcast/morning-run/morning-brief/pandora-papers-leak

For sure, if national leaders or politicians names are on the list, extra scrutiny is required to make sure the funds originated from legal sources rather than taxpayers’ pockets.

You might ask, do I have an offshore company arrangement at the moment? The answer is no.

But the Pandora Papers have alerted me that, as a responsible breadwinner, maybe I should.

#pandorapapers #panamapapers #moneylaundering #estateplanning

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