One of the most common ways people hide their wealth in tax havens is by setting up a legal vehicle (like a corporation or trust) to hold their wealth or assets without disclosing information about their identity or about the wealth or assets held by the legal vehicle. These secretive structures serve as a curtain or firewall between the owner and their wealth, obscuring the owner’s identity and helping them hide the true value of their wealth and, ultimately, pay less tax than they should.
There are a range of financial instruments that people can use, often supported by a large infrastructure of lawyers, accountants, bankers, trust and company formation agents, and other professionals. Some secrecy jurisdictions choose not to collect information about companies established under their jurisdiction so that they cannot be forced into revealing information about their clients. Other actively put up barriers to international cooperation and transparency by making it illegal for bankers to disclose information about their clients to investigative authorities.