More than a year after the Panama Papers revelation, Hong Kong is again in the spotlight for being a money laundering haven. A recent in-depth study by economist Gabriel Zucman and his colleagues shows that Hong Kong remains a favoured tax haven for foreigners. The city has apparently failed to learn any lessons about how rampant tax avoidance practices can tar its reputation.
Before 2007, Hong Kong held less offshore wealth than Jersey, the Bahamas, or the Cayman Islands. But from 2007 to 2015, it was second only to Switzerland in terms of offshore wealth, which increased sixfold during that period. Zucman specifically notes that anonymous shell corporations make it extremely challenging to identify the real people behind the companies, making it an efficient tool for moving dirty money.