For just $309, you too can hide your assets — in the U.S.

The Panama City skyline Thursday. The city is home to Mossack Fonseca, the law firm at the center of the Panama Papers scandal.

The Panama City skyline Thursday. The city is home to Mossack Fonseca, the law firm at the center of the Panama Papers scandal.

(Joe Raedle / Getty Images)
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The website for Corporation Makers promises that owning a business can remain “your deep dark secret.”

“Do you wish to own land or other assets without anyone becoming aware of it?” it advertises.

Not a problem. All for as little as $309.

The pitch doesn’t rely on the loose rules of well-known offshore havens such as the Cayman Islands. It’s about Nevada.


Nevada is among a handful of U.S. states with liberal incorporation laws that offer many of the same benefits that have drawn business tycoons, politicians and money launderers from around the world to hide their wealth in exotic locales — a secret economy revealed this week in a series of reports based on leaked documents from a Panamanian law firm.

The so-called Panama Papers show how the firm Mossack Fonseca set up shell companies for the rich to shield their millions from the prying eyes of tax authorities and the public.

The firm’s most common destination was the British Virgin Islands, where it worked with more than 100,000 entities. But its seventh-most popular place to set up corporations — after island nations such as Seychelles — was Nevada, with more than 1,000 companies.

In pursuit of fees and other revenue, several U.S. states have competed with each other in recent decades to attract people from around the world starting businesses. The states promise minimal taxation and maximum legal protection and privacy, much like offshore tax havens.

“The mechanisms are pretty much the same here,” said Matthew Gardner, executive director of the Institute on Taxation and Economic Policy, a nonprofit in Washington. “There’s nothing special happening in Panama. Panama is pretty much a microcosm of what the U.S. is a willing partner in.”

Financial watchdog groups have dubbed the competition among states a “race to the bottom” that places the U.S. among the worst places in the world for corporate transparency.


“From the states’ perspective, the end game is to raise revenue for the state by creaming off fees from large numbers of companies incorporating there — and the consequences be damned,” one such group, the Tax Justice Network, based in the United Kingdom, wrote in a 2015 report.

When John Cassara, a former special agent with the U.S. Department of the Treasury who investigated money laundering and fraud, was training foreign investigators, they would often ask about “this thing called Delaware.”

“You’ve heard the expression ‘follow the money’?” Cassara said. “Well, when the money trail leads to a Delaware corporation, it is almost a dead end for law enforcement.”

More than a century ago, Delaware sought to attract businesses by allowing companies to write governance rules that shielded management from liability and eliminated standard protections for shareholders.

Today, the state is the legal home to 1.1 million companies, 95% of which have their principal location in another state or country. Tens of thousands of businesses list the same Delaware addresses, home to their incorporating agents.

The businesses registered in Delaware include 65% of Fortune 500 companies.

But many more are limited liability corporations essentially unknown to all but the owners and their agents and lawyers, drawing enough criticism that the state maintains a “facts and myths” Web page.


“Delaware has a comprehensive statutory and regulatory regime to protect the public from improper behavior by business entities, just like other states,” it says.

State officials say that over the last decade or so they have cracked down on a variety of questionable practices, including the use of shelf corporations, or old shell companies that are sold to start-ups trying to pass themselves off as businesses established long ago.

Not in dispute are the benefits to Delaware: corporate franchise taxes — the fees for maintaining a business — provide the state nearly $1 billion a year, or a quarter of its annual revenue.

That success has drawn the attention of other states looking for sources of revenue.

In the 1980s, Nevada began revamping its corporate laws to minimize liability for management.

Among its biggest draws is secrecy.

The state allows “nominees” to file company documents while the identities of the true owners remain hidden.

That is a key selling point for many incorporation companies that specialize in establishing businesses in Nevada.


A common practice is for a nominee to be “appointed in the morning,” file state paperwork by lunch, and then resign by dinner, according to the incorporation site



4:15 p.m.: An earlier version of this article referred to the incorporation site The correct URL is


“The less the public knows about your affairs, the less engaged they can become,” the site says.

Nevada and other states say their rules are not meant to encourage illegal activity.

But secretive entities have long been used to move and hide money. Hard-to-trace shell companies have served as fronts for controversial foreign buyers of top-end real estate in cities including New York and Miami.

Federal rules have also allowed U.S. political donors to hide campaign contributions by donating to super PACs through limited liability corporations.


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One prominent Republican donor, the gambling industry magnate Sheldon Adelson, tried to hide behind secrecy protections when he purchased the Las Vegas Review-Journal last year.

The company’s journalists were informed one day that their new owner was a company called the “News + Media Capital Group,” which had been recently incorporated in Delaware with “undisclosed financial backers with expertise in the media industry.”

Corporate documents listed Michael Schroeder, a Connecticut newspaper publisher, as the company’s manager but did not name the owner, whose identity was only revealed after the newsroom revolted and its reporters launched their own investigation.

Adelson had originally denied buying the paper.

Gardner, of the financial watchdog nonprofit, explained the cost of such secrecy: “There is a basic matter of democratic distrust when you don’t know who’s running things.”

Secrecy has been allowed to flourish in the U.S. even as the government tries to improve corporate transparency abroad in an effort to cut off funding for terrorism, drug trafficking and other illicit activity.


But pressure is building on federal and state officials to address corporate secrecy. This week, U.S. Treasury officials said they could soon issue a rule change that has been in the works to require banks and other financial institutions to obtain information about the owners of companies.

News reports about the Panama Papers this week have already put some state officials on the defensive, with some critics calling for federal requirements that states disclose businesses’ true owners.

Wyoming launched an audit Monday of 24 companies in the state linked to Mossack Fonseca and discovered they had failed to provide “required statutory information for performing the duties of a registered agent under Wyoming law.”

Wyoming Secretary of State Ed Murray promised to fight fraud and possibly seek changes in state law. At the same time, he defended the way Wyoming did business.

“I oppose a one-size-fits-all federal law mandating the dissolving of privacy protections,” he said in a statement. “We are not naive as to the importance of the release of these ‘Panama Papers,’ but we will not compromise the privacy of our customers.” | @mattdpearce



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