Panama Papers investigation: NZ actively promoted to wealthy foreign clients

Files from the Panama Papers show Mossack Fonseca was actively promoting New Zealand to its wealthy foreign clientele as a good place to do business.

Panamanian law firm Mossack Fonseca is playing up NZ’s good reputation. Source: Breakfast

The Panamanian law firm is playing up New Zealand’s good reputation particularly to rich listers in Central and South America.

The investigation into the Panama Papers New Zealand is a journalistic collaboration by reporters from One News, RNZ News and investigative journalist Nicky Hager.

There are 61,000 documents that reference New Zealand and by digging through them we’ve been able to cross reference names with documents already in the public domain to build a picture of how the controversial law firm operated here.

We found promotional material from 2013 where Mossack Fonsecca tells its clients that an “added value” of New Zealand is that we are “known internationally as a promoter of transparency and fiscal compliance”.

The email plays up the fact that New Zealand is a member of the United Nations, part of the OECD, The International Monetary Fund and belongs to the British Commonwealth.

It says New Zealand has “secure and flexible company and trust laws” that make it easy for clients to pay low levels of tax.

Massey University Senior Lecturer of Accountancy Deborah Russell says foreigners can take advantage of our good reputation. She says: “We've got all the accoutrements of a really fantastic First World economy, so we've very easy to do business in, we've very clean to do business in, so if you can domicile all your affairs here, you're helping yourself to that good reputation”.

In these documents we can see that Mossack Fonseca is pushing one type of product called a “Look Through Company”. These companies are structured so foreigners don’t pay any tax in New Zealand as long as the money is earned off shore.

Deborah Morrison says “we're not interested in taxing it, so they can help themselves to that zero percent tax rate, all perfectly legally”.

The 61,000 documents mentioning New Zealand suggest that the promotion of New Zealand is working.

There’s also the fact that ten years ago there were fewer than 2000 trusts. The numbers have gone up every year to almost 11,000 trusts in New Zealand.

IRD says there could be nearly a thousand more they don’t know about.

As we’ve mined through the documents its clear a lot of the promotion of New Zealand is aimed at wealthy Central and South American clients.

To set up a trust in New Zealand you have to provide proof that the name and address of a director is genuine and that they’re a New Zealand resident. But foreigners can get around that by naming a Mossack Fonseca nominee. That person isn’t a benefactor of the trust, just a name and address for rent.

These revelations are shining some light on New Zealand’s part in the Panama papers scandal.

Reporting team: Andrea Vance, Gyles Beckford, Jane Patterson, Jessica Mutch, Lee Taylor, Nicky Hager and Patrick O’Meara

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.