What is 'Mossack Fonseca'

Mossack Fonseca & Co., founded in 1977, was a Panama-based law firm that provided legal solutions, trust services, company formations and foundations and intellectual property services to its clients. Although the firm was domiciled in Panama, it operated globally with an employee base of 600 and a worldwide network across more than 40 countries. The firm was mostly obscure among the general public, until the publication of the Panama Papers on April 3, 2016, which revealed an enormous tax haven clientele that included more than 214,000 entities in 200 countries. (For more information, see "Panama Papers").

The firm said on March 14, 2018 that it was shutting down due to the economic impact and damage to its reputation following the disclosure of its involvement in global tax evasion – exposed in the Panama Papers.

BREAKING DOWN 'Mossack Fonseca'

Mossack Fonseca at one time ranked as the world's fourth-biggest provider of offshore services and was at the center of the stories exposed in the Panama Papers. The company was said to sell shell companies for a fee of as little as $1,000 in cities across the world. According to the International Consortium of Investigative Journalists (ICIJ) report, “Mossack Fonseca worked with more than 14,000 banks, law firms, company incorporators and other middlemen to set up companies, foundations and trusts for customers.”

Mossack Fonseca’s website previously stated that the firm offered research, advice and services for the following jurisdictions: Belize, The Netherlands, Costa Rica, United Kingdom, Malta, Hong Kong, Cyprus, British Virgin Islands, Bahamas, Panama, British Anguilla, Seychelles, Samoa, Nevada, and Wyoming (USA). While the Panama Papers highlighted how the company routinely engaged in activities that abet tax evasion and money laundering, the company claimed to be working within the legal and regulatory framework overseen by different enforcement agencies. 

The Panama Papers

The Panama Papers are documents that contain personal financial information about a number of wealthy individuals and public officials that had previously been kept private. An anonymous source, John Doe, leaked the documents in 2016 through German publication Süddeutsche Zeitung. Among the people named in the leak were a dozen current or former world leaders, 128 other public officials and politicians and hundreds of celebrities, business people and other rich individuals.

Offshore business entities are legal in general, and most of the documents showed no inappropriate or illegal behavior. But some of the shell corporations set up by Mossack Fonseca were revealed by reporters to have been used for illegal purposes, including fraud, tax evasion and the avoidance of international sanctions.

RELATED TERMS
  1. PAB (Panamanian Balboa)

    PAB (Panamanian Balboa) is the national currency for the Republic ...
  2. PAB

    In currencies, this is the abbreviation for the Panama Balboa. ...
  3. Beneficial Owner

    A beneficial owner is the true owner of an asset or security ...
  4. Paper Dealer

    A paper dealer is a market maker that buys and sells extremely ...
  5. Paper Trade

    The paper trade is the practice of simulated trading so that ...
  6. Paper Profit (Paper Loss)

    A paper profit (or loss) is an unrealized capital gain (or loss) ...
Related Articles
  1. Taxes

    Panama Papers: Searchable Database of All 214,000 Parties Now Live

    Prepare for global mayhem.
  2. Insights

    Panama Papers: What Advisors Need to Know

    Here is how clients may be impacted by some of the issues brought to light by the Panama Papers.
  3. Managing Wealth

    Iceland PM Resigns in 1st Major Casualty of Panama Papers

    A sensational release of documents by the German newspaper Süddeutsche Zeitung exposes the network of corruption and abuse of tax havens by the mega-rich.
  4. Investing

    5 EU Countries Agree to Share Tax Data

    On Thursday, British Chancellor George Osborne and his counterparts from Spain, France, Germany and Italy announced a new data-sharing program to cut down on the use of tax havens to avoid or ...
  5. Investing

    5 Ways You Can Invest in Panama From Abroad

    Learn about five ways to invest in Panama with tips for both individuals and business owners.
  6. Retirement

    6 Reasons Why Americans Retire in Panama

    Understand why more and more Americans are retiring to Latin America. Learn why Panama is a popular retirement destination for Americans.
  7. Managing Wealth

    Panama Papers Data Dump: Biggest Surprises

    First of all, there aren't 214,000 entities mentioned--there are more than 320,000.
  8. Retirement

    Budgeting Tips: Living in Panama on $1,000 a Month

    Discover how far $1,000 in monthly income can take you in Panama, and determine whether this Central American paradise is the place for you.
  9. Managing Wealth

    4 Benefits of Owing an Offshore Company

    Four reasons why you might consider incorporating offshore.
  10. Financial Advisor

    Panama Papers Name Emma Watson, Emilio Estevez, Other Celebs

    If you're mad at David Cameron, brace yourself to be mad at Hermione Granger as well. And possibly one Charlie's Angel. And the world's most beautiful woman.
RELATED FAQS
  1. Is a private company required to show financial information?

    Understand whether a private company is required to disclose financial information to the public. Learn what is required ... Read Answer >>
  2. Why is Hong Kong considered a tax haven?

    Discover why Hong Kong is one of the world's leading tax havens. Low taxation on high-net-worth individuals and corporations ... Read Answer >>
  3. Is Cyprus Considered a Tax Haven?

    Explore the factors that resulted in Cyprus abandoning its status as a tax haven, including the terms for the bailout of ... Read Answer >>
  4. When did the U.S. start using paper money?

    The roots of paper money in the U.S. dates back to the 1600s in Massachusetts, when the pioneering colony printed bills and ... Read Answer >>
  5. Why is the Bahamas considered a tax haven?

    Find out why the Bahamas is an international tax haven. Learn about business and tax laws that make the Bahamas attractive ... Read Answer >>
Trading Center