Gateways, Funnels, and Stackers: How People Hide Property Ownership Through Offshore Structures

Area of Science:

• Financial Criminology
• Economic Geography
• Sociology of Finance

Background:

• Wealthy individuals utilize offshore financial structures, such as shell companies, for asset protection.
• Offshore wealth structuring is often conceptualized narrowly as tax evasion, overlooking its relational complexities.

Purpose of the Study:

• To systematically analyze patterns in offshore wealth structuring, focusing on the UK residential property market.
• To identify and categorize distinct formation patterns within offshore structures.
• To provide insights into jurisdictional choices for offshore incorporation and management.

Main Methods:

• Analysis of overseas entities holding UK residential properties.
• Isolation and examination of the 'entry layer' and 'action layer' of offshore structures.
• Identification of three interstitial patterns: global funnel, selective gateway, and self-stacker.

Main Results:

• A specific regional offshore circuit in terms of flows and magnitude was identified.
• Three distinct offshore formation patterns (global funnel, selective gateway, self-stacker) were revealed.
• Variation in jurisdictional use for incorporation versus complex structuring was evidenced.

Conclusions:

• Offshore wealth structuring is a relational practice with identifiable patterns and jurisdictional variations.
• Findings offer indirect evidence on how different jurisdictions are used within offshore structures.
• The study provides a pioneering analysis of the scope, scale, and formations of offshore structures for personal property held by the wealthy.