Image copyright Reuters Image caption Files show how Mossack Fonseca clients were able to launder money, dodge sanctions and avoid tax

The huge leak of documents from the Panamanian law firm Mossack Fonseca has revealed how tax havens are used to hide wealth.

It is the biggest leak in history, but many have questioned why only a few Americans have been implicated so far.

US news outlet Fusion, which was part of the International Consortium of Investigative Journalists (ICIJ) that revealed the files, said journalists were able to identify 211 people with addresses in the US who owned companies in the data. But it was not clear if all of them were US citizens.

Experts said more names could become clear as other files of the 11.5m leaked documents were examined. Americans seeking to avoid tax, they said, might prefer other well-known tax havens or US states with relaxed regulations.

Another reason could be that stricter US laws had made tax evasion more difficult for American citizens.

'Americans do not need to go far'

Laws in the US states of Delaware, Nevada and Wyoming have made it easy for corporations to create shell companies there to avoid higher taxes in their own states, experts say.

Foreign companies are also said to have taken advantage of these regulations.

Critics say these arrangements were responsible for transforming Delaware into an onshore version of the Cayman Islands, a well-known tax haven, according to a report by the New York Times.

Officials in Delaware said this comparison was "inaccurate".

But watchdog group Transparency International said the state was "synonymous" with "anonymous companies and ghost corporations", being "one of the most symbolic cases of corruption".

It is not only about Delaware. Prof Jason Sharman, at Griffith University in Nathan, Australia, told Reuters news agency in 2011: "Somalia has slightly higher standards than Wyoming and Nevada."

These two US states were among the many places Mossack Fonseca said it offered services.

Last year's Financial Secrecy Index, published by the Tax Justice Network, said a "failure to enact legislation that would require transparency and the exploitation of these gaps by private operators" made US states including Delaware, Nevada and Wyoming "leaders" in offshore secret incorporations.

William Sharp, from US-based Sharp Partners PA, said: "Forming a Nevada or Delaware limited liability company can be done overnight and typically with very little, if any, substantive operations. To the extent that Americans are looking for corporate confidentiality, Nevada and Delaware certainly provide that."

Delaware, Nevada and Wyoming have promised to crack down on secret business but so far no relevant measures have been taken, according to the Tax Justice Network.

'Nobody can crack through'

This is how the Tax Justice Network says the operation works. A businessman sets up a shell company in Delaware, for example, using a local company formation agent.

This local agent provides nominee officers and directors, typically lawyers, whose information, such as passport details, will become public.

But as the nominees are bound by attorney-client privilege not to reveal details, it is hard to get to the names of the real owners of that company, and they may well be another shell company.

"The company can run millions through its bank account but nobody - whether domestic or foreign law enforcement - can crack through that form of secrecy," the Tax Justice Network says.

How assets are hidden and taxes dodged

'They may go elsewhere'

Image copyright Reuters Image caption Singapore would be one of the preferred options for Americans seeking to avoid taxes

A report by US website Politico suggested that Americans who wanted to avoid taxes preferred other places, like Bermuda, the Cayman Islands or Singapore, and not Panama.

These countries speak English, operate under a derivative of English common law and have political systems seen as more stable, it said.

"If there was a leak from Singapore, as opposed to Panama, which is what we have so far, we might find more [evasion]," Reuven Avi-Yonah, a law professor at the University of Michigan, told Politico.

He said estimates of the annual costs of illegal tax evasion for the US ranged from $20bn (£14bn) to $70bn.

However, Mr Sharp said US laws like the Foreign Account Tax Compliance Act (FATCA) and other cross-border initiatives had meant that the "tax evasion game [was] principally over for American taxpayers".

"The list of known countries used by Americans to evade taxes is growing shorter as the day grows longer," he said.

Panama Papers - tax havens of the rich and powerful exposed