In regards to the leak from Panamanian corporate services provider Mossack Fonseca, also known as "Panama Papers", we want our clients to rest assured that our company has not been affected in any way.

At the same time, we want to say a few words in response to the articles published around the world during the weekend. Most of these articles assume that there is an illegal or at least an immoral reason behind the setup of an offshore company or structure and that there can not be a legitimate reason to incorporate offshore.

First of all, we think that every person (at least as long as they are not politically exposed) has their right to privacy. Many countries, especially in Europe, have public databases about owners of companies including their home addresses, financial results etc. This can create a security risk for successful business people and result in them being put at risk for kidnapping, extortion etc. There might also be competition reasons why you don't want all information to be made public. If competitors know exactly what subsidiaries you own, their financial numbers, they can use that information against you in their own favor.

Another reason to keep assets offshore might be that you want to diversify and not keep all your assets in one jurisdiction. We all saw what happened during the financial crisis in Cyprus in 2013. Over a night, everyone with a bank balance over 100k EUR lost 10% of their assets. This because the banks suffered big losses from bad investments in Greek Bonds, and the Cyprus government saw no other way out then to confiscate 10% of all bank balances over 100k EUR. From the beginning, they were talking about confiscating 10% from all accounts no matter if the balance was over or under 100k. People think that this can not happen in their own home countries in the Western world, but with the new bail-in regulation, it can and it will. Putting assets offshore is one of the few ways to diversify your risk, and guess what it is 100% legal. Besides diversifying your risk against new bail-in regulation, placing assets offshore is the perfect way to legally diversify against currency devaluation. Most people in the developing world (think South America, Africa, Asia) are aware of this risk since they live with it in their daily life. However, people in the Western world remain completely ignorant, since we have been fortunate enough to have relatively low inflation rates. But just because inflation has remained subdued for the past 20 years, doesn't mean that it will stay low forever. One perfectly legal way to protect yourself against higher inflation in your home country is to diversify in foreign currencies, foreign stocks, foreign real-estate, precious metals etc. With higher inflation rates and economic trouble, often come capital controls. For example, Cyprus implemented capital controls in 2013, and they stayed in place for years. Capital controls limit free movement of capital, and can severely affect e.g. import/export businesses, but of course also other types of businesses. Maintaining offshore structures/assets, amid capital controls, might be the only lifeline and the difference between bankruptcy and success for SMEs.

Besides the obvious benefits mentioned above to going offshore, there are numerous other. We will not go through every reason or benefit why you want to place assets offshore, we just wanted to provide an alternative perspective than the one perpetuated by mainstream media.