UNLIKE a regular company, which will have employees, assets and operations, a shell company is a hollow structure, set up for the purposes of performing financial manoeuvres rather than selling goods or services. The uses of such vehicles range from the benign to the nefarious. Those looking to do something dodgy with their shell companies prize anonymity above all. The level of secrecy on offer varies from country to country. The legal frameworks of certain offshore centres make ownership devilishly difficult to penetrate. Among these is Panama, the focus of the latest scandal over leaked documents. But the strongest secrecy is, arguably, to be found onshore, in the United States, where the agents who incorporate firms aren't even required to collect information on the identity of the ultimate "beneficial" owner (the person to whom the company really belongs, as opposed to the registered holder, who can be a nominee or even another company).

At the legitimate end of the shell-company scale, investors from different countries who are setting up a joint venture might choose to incorporate it in a neutral offshore jurisdiction, and may use a shell as part of its corporate structure. Large corporations sometimes use shell companies to hold assets temporarily during complex mergers and acquisitions. But these vehicles are also used to hide the provenance of offshore money held by those looking to evade taxes owed in their home countries. This can be done by, for instance, placing bank accounts in the name of "legal owners"—companies, trusts, foundations or combinations of these—rather than natural persons. Further down the moral scale, shell companies are popular vehicles for moving and concealing public wealth stolen by officials and politicians (or bribes paid to them), as well as for sanctions-busting, drug-trafficking, arms-dealing and the financing of terrorism.