The Panama Papers contain over 11.5m files from the database of Mossack Fonseca, the world’s fourth biggest offshore law firm. These records are called the biggest offshore leak in history revealing offshore taxation schemes used by over a hundred politicians and world leaders. The leak is likely to negatively affect the offshore business and schemes used worldwide.

The data was published by the International Consortium of Investigative Journalists (ICIJ) and is now publicly available. ICIJ received the database from the German newspaper Süddeutsche Zeitung, the latter obtaining it from an anonymous source. The Papers share information on twelve national leaders and over a hundred politicians, their families and close associates who have been using offshore tax regimes to hide their assets.

Mossack Fonseca is a Panama-based law firm rendering services for incorporation of companies in offshore jurisdictions, for example, the BVI or Cyprus, as well as for asset management. According to the Panama Papers, the law firm acted as registered agent for over 200,000 companies.

After the Panama Papers being revealed, the reliability of offshore schemes is undermined. The biggest offshore leak seriously questions the commonly used legal instruments offered by offshore law firms. For instance, businesses and individuals should carefully think about the agreements, liability and security measures applied in offshore jurisdictions. Most likely, if due security precautions are taken the legal costs of implementing an offshore scheme will equal to those incurred when using a lawful one, without any offshore company involved.