In recent years, there has been much sabre-rattling about unethical entrepreneurs using the veil of secrecy of offshore paper companies.  The outgoing government introduced legislation restricting the use of foreign parent companies, unless they are transparent vehicles conducting operating activities. Entrepreneurs must show what they have, or else…

First, I was surprised that politicians were so keen to abolish a tool of which they had been the foremost beneficiaries. After all, a successful entrepreneur need not be shy of having created value and harvested its rewards. They worked hard, risked hard and reaped.  This is the natural way of things.  CFC legislation prevents them not, from managing and investing their wealth abroad thorough legitimate asset management structures.  It is the politicians, with relatively modest official salaries, that need to hide the loot. What will they do with the demise of paper companies?

And then it dawned on me. People in power do not need to hassle with foreign incorporations, bank accounts and Dubai shopping trips via Vienna.  They do not need to study tax rules, legal structures or learn a foreign language.  As simple as a Rubik’s cube: use a strawman (front man) from the privacy of your armchair.  He will be happy to sign for you as beneficial owner for a daily hot soup, a driver and a status. (The self-delusion of respectability.)  He will do your laundry and dishes too while he is at it.