Members of the media stand outside the Arango Orillac Building where Mossack Fonseca law firm is situated at in Panama.
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Reputational risk may deter many from legitimate offshoringIt is the topic everyone has been talking about – and one the wealth management industry is doing its best to avoid. The release of the so-called Panama Papers last weekend has shone a spotlight on the murky world of offshore centres. Numerous high-profile names, including the late father of prime minister David Cameron and actor Jackie Chan, have been caught up in a scandal that has focused once more on the legitimacy of the offshore industry.If you have assets offshore – perhaps having used an offshore company to purchase your house, for example – what ramifications does it have?Haven't efforts to clean up the offshore industry been going on for years?Yes. In 2000, the OECD issued a report identifying 35 offshore financial centres – five of which were overseas territories of the UK (such as the British Virgin Islands) and three British dependencies – the two Channel Islands and the Isle of Man.There are many legitimate reasons to use offshore centres.Numerous banks and institutions have been mentioned in the Panama Papers in requests to help create legitimate offshore structures for clients.Whilst the offshore industry has made efforts to clean up its act, reputational risk is likely to become part of the financial planning conversation.
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