Shielding the Wealthy But At What Cost? For Privacy World, the answer is clear—everyone has the right to shield their personal information, no matter if it's their financial assets or simply their identity
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
According to estimates from Gabriel Zucman—a leading economist at UC Berkely—the world's wealthiest elites have stashed around $8.7 trillion in offshore accounts to safeguard it from the burden of annual taxation. Other estimates have placed the value as high as $36 trillion. While the exact amount remains a mystery, it's clear that the wealthy are working hard to shield their private information but at what cost?
Despite journalistic efforts to expose wealth stored in international tax havens, protecting one's assets and identity behind international safeguards is not illegal. In fact, it's common for businesses and the elite to shield their finances and private lives through multiple identities and accounts. Ethically, though, the practice can cost billions of dollars in tax revenue every year, which could be used to fund public services and rebuild economies.
For the wealthy, protecting their personal information behind layers of international accounts and identities isn't a question of ethics. Instead, it's a question of what's rightfully theirs to protect and whether it's morally just to have their private lives exposed in public. For this reason, many elites are turning to Privacy World to safeguard their financial and personal data.
The Origins of Offshoring and International Identity Protection
The concept of protecting one's private life with an offshore account or a secondary identity can be traced back to the Cold War when rampant political insecurity and instability characterized many parts of the world.
By the 1970s, the world began to recover from the devastation of World War II and the global economy shifted, creating new opportunities to accumulate wealth. At the same time, though, the world was still fraught with tension from the Cold War. In this context, many wealthy individuals and families saw the benefit of storing assets in foreign accounts where they would be safe from hostile governments.
As the global economy has become more interconnected, the practice of offshoring has become more common and more sophisticated. In the past, individuals would simply set up bank accounts or trusts in foreign countries using their real names.
Today, though, the process has become far more complicated and the wealthy now feel obliged to hide their true identities. In light of the Pandora and Panama Papers, which sought to expose elites for safeguarding their finances, as well as the constant risk of data breaches, many turn to consultancy firms, such as Privacy World, to create multiple new identities layered behind various nationalities, with new passports and accounts.
The Legality and Ethics of the Matter
While the ethics of helping the wealthy elite store their assets in offshore accounts may be debatable, the legality of the matter is not. In most cases, it is legal for businesses and individuals to store their assets in foreign accounts and to use foreign identities to protect their privacy. There are, of course, some exceptions.
For example, in the US, it is illegal to use a foreign bank account to hide assets from the IRS, unless the offshore account is reported on your tax return. This law is being enforced by the IRS more and more rigorously and the US government has been making a proper effort in cracking down on those offshore bank accounts that go unreported by their citizens or tax residents. However, many wealthy Americans continue to store their assets offshore. This is estimated to cost roughly $200 billion in tax revenue—globally—each year from lost capital gains, inheritance taxes, and more. But again, this is still legal.
So, let's instead talk about the ethics of the matter. Understandably, the Pandora and Panama Papers meant to cast a shadow over firms and individuals who hid their private individual wealth. And, as the global wealth gap continues to grow, many people question whether it's right to store such immense wealth out of sight.
Yet, from a Western perspective, it's easy to forget that this practice was created to shield assets from hostile entities. Currently, the world exists amid state-sponsored terrorism, strongman leaders, ruthless media outlets, and politically sanctioned extortion and exploitation. The wealthy—particularly those in non-democratic nations—are now most at risk of having their assets and personal lives invaded.
This is where Privacy World—a global consultancy firm and privacy think tank—has endeavored to help. Its mission is based on the belief that everyone is entitled to privacy and, as such, has no qualms about accepting money to protect wealthy elites' identities.
Privacy World Won't Bow to Raised Eyebrows
Since the firm was first founded, Privacy World has been a vocal and proud proponent of protecting the interests of wealthy individuals, especially those who wish to protect their private financial and personal information. This has led many to question the firm's practices, including its willingness to help elites secure secondary citizenships, layer identities behind multiple international passports, and even apply for diplomatic passports / appointments.
Others have pointed out that the firm seems to be infiltrating loopholes and gaps in existing international law. Privacy World has made one thing clear, though—it will not bow to raised eyebrows or questions of its ethics. By working with an international network of legal and privacy experts, the firm stands by its efforts and ensures that all solutions fall within the relevant law.
So, Which is Right: Money or Ethics?
Nothing in life is black or white. The many shades of gray often make it difficult to discern what is right and what is wrong and the same can be said of the question of whether it is moral to help the wealthy elite safeguard their assets and identities. Of course, there are clear arguments to be made on both sides of the coin.
From an ethical standpoint, one could argue that it is wrong to help the wealthy elite protect their assets while millions of people are starving around the world. From a legal standpoint, though, it is clear that there is nothing wrong with the practice. It is ultimately up to each individual to decide what they believe is right.For Privacy World, the answer is clear—everyone has the right to shield their personal information, no matter if it's their financial assets or simply their identity. And, if the wealthy are willing to pay for such a service, it's completely within the firm's rights to offer such a solution.