The 11.5 million leaked documents of the Panama Papers have shone a spotlight on numerous anonymous companies that the worldâ€™s wealthy use to secretly manage their funds. These companies acted as fronts for high-profile politicians, celebrities and businessmen, allowing them to buy property, open bank accounts and trade assets without the public knowing their true identities â€“ in some cases those of tax evaders, corrupt politicians and money launderers.
What many Americans might not realize is that foreign-owned shell companies play a big role in the U.S. economy through the real estate market. When purchased through a shell company, an offshore company or a trust, U.S. real estate offers wealthy foreigners a stable and secretive investment.
In the last quarter of 2015, 58 percent of all property purchases of more than $3 million in the United States were made by limited liability corporations, rather than named people. Altogether, those transactions totaled $61.2 billion, according to data from real estate database company Zillow. Since many of these companies are registered anonymously in the U.S. — often in states like Delaware, Nevada and Wyoming that offer secrecy and tax protections that rival traditional offshore destinations — itâ€™s impossible to know just how many are owned by foreigners.
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