Financial Secrecy Index: Where Do the Wealthy Hide Their Assets?
The Tax Justice Network (TJN), an organization established in the UK in 2003, aims to restore and maintain fairness in tax systems. On May 17, 2022, TJN released the 2022 Financial Secrecy Index (FSI). This index, which was also published in 2020, primarily evaluates the financial and legal systems of countries or regions to determine how well they assist wealthy individuals and high-net-worth individuals (HNWIs) in hiding assets, both in terms of scale and effectiveness.
The index comprises 20 indicators, each scored on a scale from 0 to 100. A score of 0 represents Full Transparency, meaning the assets of the wealthy and HNWIs are completely visible and cannot be concealed. Conversely, a score of 100 represents Full Secrecy, indicating that the assets of the wealthy and HNWIs are entirely hidden. These scores are then combined with the scale of financial services provided to non-residents by the local financial industry, resulting in an overall score.
In simple terms, the higher the level of secrecy and the larger the scale of financial services offered to non-residents, the higher the score and the higher the ranking. In this series, we will analyze selected countries and regions to understand how they facilitate asset concealment for wealthy individuals and HNWIs.