While many companies and businesspeople actively manage their online and social media presence – many overlook the reputational impact of their financial and tax planning decisions. The recent “Paradise Papers” leak illustrates this point – with global audiences paying close attention to the roster of famous (and not-so-famous) names linked to each subsequent information leak. More than 120,000 names of people and companies have been identified.

The Paradise Papers leak involved the hacking of offshore law firm Appleby, and subsequent leakage of 13.4 million files to the Sueddeutsche Zeitung, a German newspaper, and the International Consortium of Investigative Journalists (ICIJ), an organisation known for its lengthy investigations. Global personalities like Shakira, Canadian Prime Minister Justin Trudeau, and US President Trump’s son-in-law Jared Kushner have been linked to either offshore accounts or account-holders.

While the trifecta of tax, the law and technology does not usually rise to the ranks of “celebrity gossip” – these scandals are symptomatic of a new risk of using “offshore” corporate entities. Beyond the risk of regulatory compliance – investors must also consider the public “naming and shaming” which may result when using offshore companies to hold property, aircraft, yachts, and investments in stocks and shares – among numerous other assets.

No reports have so far suggested that any of the activities mentioned in the Paradise Papers were illegal. However, the reputational damage alone may affect not only current holdings, but also future professional and investment opportunities. There may also be significant impact for business associates, employees, family members, and friends of the named individuals or entities.

This is not the first scandal of this type. Last year, global attention was captured by the “Panama Papers” scandal. But if there is no illegality, then why is public opinion so negative towards the use of offshore jurisdictions? It appears that part of the explanation relates to the perception that these jurisdictions are engaged in the selling of secrecy, and that people who use such jurisdictions are therefore assumed to have something to hide.

The growing international push for transparency and exchange of information amongst jurisdictions for tax purposes will only make it more likely that the “Paradise Papers” will not be the last of its kind – and high-net-worth individuals should prepare for eventualities. The possibility that many such “leaks” may have resulted from hacking or other illegal activities seems to be ignored, or even defended on various grounds. In such an environment, further “leaks” can only be expected.

Managing these risks is not only possible, but crucial. Many high-net-worth individuals have traditionally managed ownership of their assets in an ad-hoc or casual way – delaying proper tax planning for later years. However, by simply structuring asset ownership carefully and operating out of reputable jurisdictions, many of the reputational risks arising out Paradise-Papers-style hackings can be mitigated.

For example, a jurisdiction like Singapore offers companies and individuals a favourable tax regime, a well-developed legal system, and access to reputed law firms, legal professionals, and financial advisors. It is also a financial and business hub where foreigners and locals locate their business and financial activities for sound commercial reasons. The Singaporean government is also known for its commitment to the rule of law, as well as remaining vigilant of abuses in the financial sector.

Furthermore, Singapore has now made it easier for foreign corporate entities to transfer their company’s registration to Singapore and become a Singapore company limited by shares under our Companies Act.

The Paradise Papers is only one instance, of many, of massive hacks of sensitive financial and legal information. However, individuals and companies using offshore accounts can effectively pre-empt reputational damage by engaging in careful tax planning and managing their assets from jurisdictions like Singapore, with strong reputations for financial compliance.