Revealing email exchanges between Mossack Fonseca staff members, contained in the Panama Papers, help to explain exactly how New Zealand's foreign trust regime is used by the controversial Panamanian law firm.
The Papers show a number of New Zealand law firms have actively worked with Mossack Fonseca and its international clients to organise their private wealth, business affairs and channel their funds around the world.
A 2014 email sent by Mossack Fonseca's New Zealand representative, Daniel Leon, lays out exactly how the company uses New Zealand trusts, including the measure clients can take if they do not want their names to appear on the public paperwork.
The email was in response to an enquiry on behalf of Juan Fernandez Methol from Studio Damiani, a Uruguayan firm offering legal and accountancy services to provide inheritance and tax "financial solutions".
In the 2014 email, Mr Leon responded to an enquiry from one of his colleagues, a Mossack Fonseca lawyer in Panama, about how the company used New Zealand Look Through Companies (LTC) and foreign trusts.
Mr Leon noted if the client did not "wish to appear as a registered shareholder", Mossack Fonseca could "offer the constitution of a foreign Trust NZ to be the holder of the shares of the LTC".
He went on to say that, provided the Trustee was not an Australian resident (because New Zealand and Australia have automatic disclosure), there were "minimum requirements for disclosure of foreign trusts in New Zealand".
Mossack Fonseca would set up an LTC for US$2,850 which also included the provision of a "registered office" and a "NZ resident director" - often these are New Zealand based lawyers, and the address is that of their law office.
A foreign trust cost US$2,800 to set up through Mossack Fonseca New Zealand. For customers interested in a 'COMBO', i.e. an LTC and a trust, there would be a reduced cost of US$1,500 for the trust.
Missing Cone Marshall links
In another twist to the story, one of the Auckland-based law firms that features prominently in the Panama Papers, Cone Marshall, has removed a significant amount of information off its website, about the work it does in the foreign trust industry.
This section, which no longer appears on the firm's website, refers to New Zealand as having "minimal reporting requirements as to foreign settlor trusts".
It goes on say: "The identity of the settlor need not be disclosed and the trust deed is not registered with any tax or government authority."
"All that is required is that the trustee notifies the formation of a trust, by reference to its name and date of formation, together with the identity of the trustee.
"If the trustee is a qualifying trustee (that is a trustee which has a professional person as trustee or manager), it will never be subject to tax in New Zealand on its overseas income.
"There is no obligation to file any trust accounts with any person or institution or to have such accounts audited. The trust deed, details of beneficiaries and records of directly held trust assets must also be held in New Zealand."
Another section that is no longer available is Nature of a NZ exempt trust.
In the page, that has now been removed, there was a reference to there being "no requirement for registration of a trust; the deed remains an entirely private document."
Another section that no longer appears on the website was titled "Overview of wealth planning structures under New Zealand law."
It previously had the following information:
"Although New Zealand is not a tax haven, it is possible to establish New Zealand resident trusts which are exempt from New Zealand tax."
"The key to the taxation of New Zealand trusts is the residence of the settlor rather than the residence of the trustees."
"The taxation of foreign settlor trusts with New Zealand trustees is codified in its taxation of trusts regime, and its trusts legislation."
In the typical case of a settlor gifting (non-New Zealand) assets into a New Zealand trust for the benefit of non-New Zealand beneficiaries the principal tax exemptions are as follows:
• Income Tax: None – provided there is no New Zealand source income.
• Capital Gains Tax: There is no Capital Gains Tax in New Zealand.
• Inheritance or Succession Taxes: There are no inheritance taxes or succession taxes in New Zealand.
It is not clear exactly when this material was removed from the Cone Marshall website, but it has been sometime since May 2010.
The investigation into the Panama Papers New Zealand is a journalistic collaboration by reporters from ONE News, RNZ News and investigative journalist Nicky Hager. It has been carried out with the assistance of the International Consortium of Investigative Journalists (ICIJ) and the German newspaper Süddeutshe Zeitung.