readily concealed through the use of anonymous “bearer shares”. As a result, more than of 45,000 offshore shell companies and subsidiaries companies are created in Panama each year; Panama has one of the highest concentrations of subsidiaries of any country in the world. Panama's banks are well regulated, providing stability and predictability. Panama does not yet participate in tax-information-exchange treaties; since they tax only domestic income, there is no reciprocal benefit in their sharing information with other governments. All these conditions combine to provide advantages to both legitimate business and to tax evasion. Recent developments In 2009 the USA initiated increased efforts to close taxation loopholes and identify and prosecute tax evaders using offshore accounts. As an element of this effort, they have pursued amended tax treaties to offset the banking secrecy laws of nations such as Switzerland. In 2010 the US and Switzerland agreed to a protocol increasing shared tax information to aid the prosecution of tax evasion. As with all treaties, this does not come into force until ratified by the appropriate legislative bodies (in this case the U.S. Senate and the Swiss Federal Council and Parliament). As one example of efforts to reduce illegal offshore investments made for the purpose of tax evasion, in 2010 the Swiss bank Union Bank of Switzerland (UBS) has paid a fine of $780 million and is cooperating on identifying the estimated 19,000 wealthy U.S. tax evaders who have accounts in UBS. The US Internal Revenue Service has offered amnesty to those who come forward voluntarily. Similarly the banking firm HSBC has been alleged to have aided two U.S. citizens in a multimillion-dollar tax evasion scheme that relied on various accounts held in the names of foreign shell corporations, using Swiss lawyers to act as cut-out signatories for some of these accounts. The two men were arrested and are under indictment for tax evasion. See also Five Flags Theory Flag of convenience Offshore bank Offshore financial centre Offshore fund Offshore stock broker Paradise Papers Tax haven References External links Clearwater Offshore Ltd. - Shenzhen's Private Wealth Management International Financial Centres Forum (IFC Forum) Offshore finance Money laundering Tax evasion