Who Owns the Wealth in Tax Havens?
Macro Evidence and Implications for Global Inequality∗
Annette Alstadsæter (Norwegian University of Life Sciences)
Niels Johannesen (CEBI, University of Copenhagen)Gabriel Zucman (UC Berkeley and NBER)
December 27, 2017

Abstract
Drawing on newly published macroeconomic statistics, this paper estimates the amountof household wealth owned by each country in offshore tax havens. The equivalent of
10% of world GDP is held in tax havens globally, but this average masks a great deal ofheterogeneity—from a few percent of GDP in Scandinavia, to about 15% in Continental
Europe, and 60% in Gulf countries and some Latin American economies. We use theseestimates to construct revised series of top wealth shares in ten countries, which accountfor close to half of world GDP. Because offshore wealth is very concentrated at the top,accounting for it increases the top 0.01% wealth share substantially in Europe, even incountries that do not use tax havens extensively. It has considerable effects in Russia,
where the vast majority of wealth at the top is held offshore. These results highlight theimportance of looking beyond tax and survey data to study wealth accumulation among
the very rich in a globalized world.

Keywords: inequality, wealth, tax evasion, tax havens
JEL classifications: H26, H87, E21.

∗

Annette Alstadsæter: annette.alstadsater@nmbu.no; Niels Johannesen: niels.johannesen@econ.ku.dk;
Gabriel Zucman: zucman@berkeley.edu. This paper is supplemented by an Online Appendix available at
http://gabriel-zucman.eu/offshore. We thank the Editor (Erzo Luttmer), two anonymous referees, andnumerous seminar and conference participants. We are grateful for financial support from the Nordic Tax
Research Council and the FRIPRO-program of the Research Council of Norway. Johannesen gratefully acknowledges financial support from the Danish Council for Independent Research. Zucman gratefully acknowledges
financial support from the Laura and John Arnold Foundation.

1

Introduction

Measuring the wealth of rich households is getting increasingly hard in a globalized world. Since
the 1980s, a large offshore wealth management industry has developed in Switzerland, Hong
Kong, the Bahamas, and similar offshore financial centers. Banks located in these countries
cater to wealthy individuals from around the world. They provide a variety of financial services
to these individuals, many of which are legal and legitimate, but most of which make wealthharder to observe in traditional economic datasets, such as national accounts and tax records.
Zucman (2013) estimates that 8% of the world’s household financial wealth—the equivalentof 10% of world GDP—is held offshore. There is evidence that global offshore wealth has
increased considerably over the last four decades, as a growing number of offshore centers
have entered the market for cross-border wealth management, and information technology andfinancial innovation have made it simpler to move funds oversees.
Yet the implications of the globalization of wealth management are not well understood. As
offshore centers rarely publish informative statistics, we do not have a clear view of who uses
tax havens. Does most of the wealth held offshore belong to residents of rich countries, or toresidents of developing countries? Does it mostly belong to ultra-rich households (e.g., withmore than $50 million in net wealth), to corrupt political elites, or to a broader segment of the
population? Is most of it hidden from tax authorities, or do people use tax havens for non-tax
reasons—for instance, to get access to better financial services than available in their homecountry? These are key issues for the study of inequality, public economics, and development—
and likely to become even more important in the future, as global wealth is rising fast andincreasingly takes the form of movable financial assets (Piketty and Zucman, 2014).
In this paper, we take a step toward addressing these questions by drawing on newly published macroeconomic statistics. In 2016, a number of prominent offshore financial centers—
including Switzerland, Luxembourg, the Channel Islands, and Hong Kong—started disclosing
bilateral data on the amount of bank deposits that foreigners own in their banks. These data
have been collected for several decades by the Bank for International Settlements (BIS), but
until 2016 the BIS only disclosed statistics aggregated at the country level (such as the total
amount of foreign-owned bank deposits in Hong Kong) rather than at the bilateral level (such as
the amount of bank deposits owned by Indian residents in Hong Kong). In 2016, most offshore
centers authorized the BIS to disseminate bilateral data. These series are retrospective and go
back in most cases to the early 2000s, or even earlier. As a result, we now have access to timeseries for the value of the bank deposits owned by, say, Russian residents in Switzerland, or by1

Germans in Jersey. We use these data to make two contributions.
First, we construct estimates of the amount of wealth held by each country in all the world’s
offshore tax havens. More precisely, we use the newly disclosed BIS bilateral banking statistics
to allocate the global amount of offshore wealth estimated by Zucman (2013) to each of theworld’s country. To our knowledge, it is the first time that such country-by-country estimatesof offshore wealth are computed.
The analysis of this new dataset reveals a number of striking results. We find that while
wealth equivalent to about 10% of world GDP is held in tax havens globally, this average masksa great deal of heterogeneity. Scandinavian countries own the equivalent of only a few percent
of GDP in offshore wealth, but this figure rises to about 15% in Continental Europe, and toas much as 60% in Russia, Gulf countries, and a number of Latin American countries. The
size of offshore wealth is not easily explained by tax or institutional factors. Among countries
with a large stock of offshore assets, one finds autocracies (Saudi Arabia, Russia), countries
with a recent history of autocratic rule (Argentina, Greece), alongside old democracies (United
Kingdom, France). Among those with the lowest stock of offshore assets, one finds relatively lowtax countries (Korea, Japan) alongside the world’s highest tax countries (Denmark, Norway).
Instead, geography and specific national trajectories seem to matter a great deal. Proximity
to Switzerland—the first country that developed a cross-border wealth management industry,in the 1920s—is associated with higher offshore wealth, as is the presence of natural resources,
and political and economic instability post-World War II.
Our second contribution is to investigate the implication of offshore wealth for the levels
and trends in wealth concentration. In recent years, following the pioneering work of Kuznets(1953) and Atkinson and Harrison (1978), a number of studies have used tax data to construct
top income and wealth shares for many countries (see Roine and Waldenström, 2015, for asurvey). A key concern raised by the use of tax returns to measure inequality, and indeed oneof the main reasons why tax data have for a long time been viewed with skepticism, is tax
avoidance and evasion. Tax records only provide information about income (and wealth, whena wealth tax exists) reported to the tax authority, not true economic income and wealth. Due
to tax progressivity, the rich have particularly strong incentives to understate their resources.
We construct revised top wealth shares factoring in offshore assets for ten countries where
wealth distributions have recently been estimated—Denmark, Finland, France, the Netherlands,
Norway, Russia, Spain, Sweden, the United Kingdom, and the United States.
Because offshore wealth is very concentrated at the top, accounting for it increases the top2

0.01% wealth share substantially, even in countries—such as Norway or Denmark—that do not
use tax havens extensively. Offshore wealth has a larger effect on inequality in the U.K., Spain,
and France, where, by our estimates, 30%–40% of all the wealth of the 0.01% richest households
is held abroad. It has dramatic implications in Russia, where the majority of wealth at the top
is held outside of the country. In the United States, offshore wealth also increases inequality,
but the effect is more muted than in Europe, because U.S. top wealth shares are already very
high even disregarding tax havens. In all cases, taking offshore wealth into account increases
the rise in inequality seen in tax data markedly. This result highlights the importance of looking
beyond tax data to study wealth accumulation among the very rich in a globalized world.
Our paper is part of a broader project, initiated in Alstadsæter, Johannesen, and Zucman(2017), aimed at studying the size and distribution of tax evasion and its implication for inequality. In Alstadsæter, Johannesen, and Zucman (2017), we use a variety of micro-data—random
audits, leaks from offshore financial financial institutions (HSBC Switzerland, Mossack Fonseca), and tax amnesties—to study how tax evasion varies with wealth. In all the micro-data
we have access to, offshore wealth turns out to be extremely concentrated: the top 0.1% richest
households own about 80% of it, and the top 0.01% about 50%. This finding leads us to revise
upward the top Scandinavian wealth shares. Here we draw on macro data to generalize the computations made in Alstadsæter, Johannesen, and Zucman (2017) to more countries. We takethe distribution of hidden wealth observed in leaks and amnesties and apply this distribution
to our newly constructed country-by-country estimates of offshore wealth.
At the outset, it is worth stressing that measuring offshore wealth involves a margin of error.
First, the BIS statistics that we rely on only cover bank deposits, not the portfolios of equities,
bonds, and mutual fund shares that households entrust to offshore banks. The distribution of
offshore bank deposits across countries, however, is likely to be strongly correlated with thatof total offshore wealth, so that the orders of magnitude we obtain are likely to be robust.
Second, the use of anonymous shell corporations makes it increasingly hard to identify thebeneficial owners of the wealth held offshore. In the macroeconomic data we use, a growing
amount of wealth is assigned to the British Virgin Islands, Panama, and similar tax havens
where most of the world’s shell corporations are domiciled. The use of shell companies has
increased particularly fast since the mid-2000s (for reasons discussed in Section 4 below). We
therefore choose to express our estimates for the mid-2000s (more precisely for 2006–2007),
when the available statistics are less contaminated by shell companies than today. Our results
provide a snapshot of offshore wealth on the eve of the global financial crisis. In Section 3, we

3discuss a number changes that have happened since the Great Recession and how they haveaffected the dynamic of offshore wealth, but we leave to future research the task of establishingcountry-by-country time series of offshore wealth. Third, for the purpose of investigating theimplications of offshore wealth for inequality, we assume that the distribution of hidden assets
seen in recent leaks and tax amnesties (as analyzed in Alstadsæter, Johannesen, and Zucman,2017) applies to all countries. This is a reasonable starting point, because the distribution of
hidden assets by wealth group is remarkably similar in all the available sources. But one cannot
exclude that offshore wealth is more or less concentrated in certain countries. Looking forward,
we plan to expand and refine our approach as new sources of information emerge about thesize and distribution of offshore assets (maybe from new leaks, or thanks to improvements infinancial transparency) and wealth inequality statistics become available for more countries.
The rest of the paper proceeds as follows. Section 2 relates our work to the existing literature.
In Section 3, we present our estimates of the amount of wealth held in tax havens globally,
updating the analysis of Zucman (2013). In Section 4, we use bilateral banking statistics toconstruct new country-by-country estimates of the world’s offshore wealth. We discuss theimplications of our results for wealth inequality in Section 5 and conclude in Section 6. This
paper is supplemented by a Data Appendix available online at http://gabriel-zucman.eu/
offshore.

2

Related Literature

2.1

Offshore Wealth and Capital Flight

Our paper first contributes to the literature on offshore wealth and capital flight. A large numberof studies attempt to estimate the flows of money, licit or illicit, that leave developing countries.
Johannesen and Pirtillä (2016) provide a recent survey of the data, methods, and results. One
prominent strand of the literature relies on accounting identities in the balance of payments, inparticular discrepancies between a country’s current account surplus and the flow of net new
foreign investments—what is known as net errors and omissions. This method has been usedby international organizations like the World Bank and the United Nations (e.g., Claessens andNaudé, 1993; UNDP, 2011), non-governmental organizations such as the Tax Justice Network(e.g., Henry 2012), and academics (e.g., Pastor,1990; Boyce, 1992; Lensink et al., 2000).
Our approach differs from most of these studies in a number of dimensions. First, we attempt
to estimate stocks of wealth rather than flows. Second, we try to base our estimates as much as

4possible on direct, official statistics on the stock of offshore assets. Most importantly, the Swisscentral bank publishes detailed statistics on the amount of offshore wealth managed by Swissbanks. Due to the outsized role played by Switzerland in cross-border wealth management, thisdata source alone (first analyzed in Zucman, 2013) plays a key role in our estimates, as describedin Sections 3 and 4 below.1 Third, to our knowledge we are the first to use the bilateral bankdeposit data of the Bank for International Settlements to estimate the stock of offshore wealthowned by each country in the tax havens other than Switzerland.2
In our view, both the net-errors-and-omissions approach and the one we apply in this paper
have merits; we view them as complementary. Our approach is likely to deliver conservative
results, because it only captures financial wealth, disregarding valuables, works of art, realestate, and other non-financial assets. The net-errors-and-omissions approach is broader inscope, at is captures not only financial assets held offshore, but also real assets, the wealthof households who change residency, and—in some variants—some foreign assets managed bydomestic financial institutions. This approach is valuable, and indeed we also rely on net errors
and omissions to provide an estimate of Russia’s offshore wealth, which we contrast to theestimate we obtain from observable BIS bank deposits (see Section 4 below).

2.2

Top Income and Wealth Shares

We also contribute to the literature on inequality. Over the last fifteen years, there has beenrenewed interest for the long-run evolution of the distribution of income and wealth. Following
the pioneering work of Kuznets (1953) and Atkinson and Harrison (1978), a number of studies
have used tax data to construct top income and wealth shares for many countries.3 Two central
findings have so far emerged from this research: inequality declined sharply in the Westernworld during the first half of the twentieth century, and it has increased since the 1980s, albeit
much more in the United States than in Europe. A key driver of these evolutions has beenlong-run changes in the level and concentration of wealth. The main reason why inequality fell
1

However, no country other than Switzerland publishes data as detailed as those of the Swiss central bank;as a result, our estimate of the world’s offshore wealth also relies on indirect method to capture the wealthmanaged outside of Switzerland; see Section 3 below.
2
Estimates of offshore wealth for the main continents (Europe, Africa, Asia, etc.) and a few countries (UnitedStates, Russia, Canada, France) were produced by Zucman (2014, 2015), but based on much less data, as the
BIS bilateral banking statistics had not yet become available.
3
See, e.g., Piketty and Saez (2003) for U.S. top income shares, Saez and Zucman (2016) for U.S. top wealthshares, Atkinson et al. (2011) for a survey, and Piketty (2014) for a broad interpretative synthesis. Top income
and wealth share series are collected in the World Wealth and Income Database, http://wid.world (Alvaredo
et al., 2017). See also Lampman (1962) for an early attempt to estimate wealth distribution from estate tax
data.

5

during the first half of the twentieth century is a series of large shocks to capital—the World
Wars, the Great Depression, anti-capital policies such as steeply progressive capital taxation,nationalizations, and rent controls—which reduced the importance of wealth relative to income
and the concentration of capital (Piketty and Zucman, 2014; Piketty, 2014). More recently,
labor income inequality has stabilized in the United States since the beginning of the twenty
first century; top income shares have mostly risen because of rapid wealth accumulation at the
top (Saez and Zucman, 2016; Piketty, Saez and Zucman, 2017). In both cases, changes in wealthconcentration among the rich play a key role for the dynamic of overall inequality.
The rise of tax havens raises a serious issue for this literature. Tax havens barely existed
before World War I, when the direct taxation of income and wealth was in its infancy andtop marginal tax rates did not exceed a few percents. Cross-border wealth management firstdeveloped in Switzerland in the 1920s, but until the 1980s there was no other country where one
could easily hide assets. Since the 1980s, tax havens have flourished. This could bias time-series
and cross-country and comparisons of top income and wealth shares in multiple directions. Tax
records, for instance, may exaggerate the secular decline in wealth concentration from its highpre-World War I level seen in most developed countries, or they could over-state the gap between
the United States and Europe today.
The literature on inequality has discussed the potential problems raised by top-end tax
avoidance and evasion (e.g., Atkinson, Piketty, Saez, 2011, pp. 36–40), but until recently there
was little data that would allow to systematically quantify it. Larudee (2016) investigates theextent to which capital flight to Switzerland can explain the decline in the French top 1% income
share between the two world wars. Roine and Waldenström (2008) and Martı́nez-Toledano(2017) are the only papers that focus on the distributional implications of offshore wealth forthe recent period. Roine and Waldenström (2008) use the net-errors-and-omissions approachdescribed above (and similar residuals in the financial accounts) to estimate the amount ofwealth hidden by Swedish residents, and assume that this wealth primarily belongs to the top,while Martinez-Toledano (2017) uses amnesty data in Spain. One of our contributions in thispaper is that we are able to analyze the implications of offshore wealth for a larger sample ofcountries.

6

3

The Global Amount of Wealth in Tax Havens

3.1

Data and Methodology

We are interested in quantifying the wealth that households own outside of their country ofresidence, and is therefore hard to observe and tax by domestic authorities: offshore bankdeposits; portfolios of bonds, equities, mutual fund shares, and derivatives managed by foreign
financial institutions; gold, diamonds and works of art stashed in vaults and “freeports” abroad,and foreign real estate. Following national accounts concepts, we define a person’s countryof residence as the country where she spends more than half of the year. In general (though
not always), this definition coincides with the definition of tax residency for tax purposes. For
instance, if a person spends more than 183 days in a given year in France, she is considered
as a resident of France for national accounts purposes, and also generally as a tax resident forFrance. As such, this person is taxable on her worldwide income and assets in France. We
include any wealth held outside of France by that person as offshore assets for France in ourseries.4 Because no systematic information exists on offshore real estate and other non-financial
assets, we restrict our attention to offshore financial wealth—which is the most important formof wealth at the top—and disregard offshore non-financial assets (real estate, gold, etc.).
While quantifying offshore financial wealth involves a margin of error, this exercise can be
conducted fairly rigorously and precisely, because there exists several official, direct, and publicly
available statistics on the wealth held in tax havens. Some of these data raise difficulties, as we
discuss below, but taken together they paint a consistent picture.
There are three main data sources to measure offshore financial wealth. First, and mostimportantly, the central bank of Switzerland publishes detailed statistics on the bank deposits,
portfolios of equities, bonds, and mutual fund shares managed by Swiss banks on behalf of
foreigners.5 Thus, we know that foreigners owned $2.3 trillion in Swiss banks in April 2017. Because Switzerland has historically played an outsized role in cross-border wealth management,
this data source alone captures a large fraction of the world’s total offshore wealth (30%–50%
in recent years). Second, all significant offshore financial centers—including Hong Kong, Singapore, the Cayman Islands, and the Bahamas—disclose statistics on the amount of deposits
4

Note that the offshore financial wealth of France does not include the portfolios of foreign securities (e.g.,
Microsoft equities) held by French residents in French banks (which are counted as onshore wealth in our series),but only the portfolios of securities entrusted by French residents to foreign custodian banks (e.g., Swiss banks)
and bank deposits held outside of France.
5
See Zucman (2013, Section III; and 2015, chapter 1) for a detailed presentation of this unique, high-quality
dataset.

7

owned by foreigners in their banks. The main limitation of these data, which are disseminatedby the Bank for International Settlements, is that they miss the largest form of offshore wealth,namely portfolio securities. Third, we can have a sense of the global amount of offshore portfolio securities by looking at specific anomalies in global investment statistics. The equities,
bonds, and mutual fund shares owned by households on foreign accounts are duly recordedon the liability side of the international investment positions of countries (the stock equivalentof the balance of payments), but not on their assets side. This causes a discrepancy between
global portfolio liabilities and assets.6 Using these anomalies, Zucman (2013) estimates thatthe equivalent of 10% of the world’s GDP is held offshore. A similar estimate is obtained byPellegrini, Sanelli, and Tosti (2016).

3.2

Global Offshore Wealth and Its Evolution Since 2001

Figure 1 shows the evolution of global offshore wealth since 2001, estimated using the same
methods and data sources as in Zucman (2013) but drawing on the latest available international
investment positions of countries. We find that the stock of offshore wealth has remained equal
to about 10% of world GDP, with no particular trend.7 Based on interviews with wealthmanagers, the Boston Consulting Group also estimates global offshore financial wealth. As
shown in Figure 1, BCG’s estimate is larger than ours, typically by 2 to 3 points of world GDP,but it displays the same time trend. The similarity of the estimates which are based on different
methods (macroeconomic statistics on the one hand; interviews with a panel of bankers in tax
havens on the other) lends support to the view that 10% of world GDP is the correct order ofmagnitude for the amount of financial wealth held in tax havens.
If anything, this order of magnitude—which corresponds to $5.6 trillion in 2007, our benchmark year in this paper—is likely to be conservative. The OECD calculates that households
owned a total of $5 to $7 trillion offshore in 2007 (Owens, 2007); Cap Gemini and Merrill Lynch(2002) have a $8.5 trillion figure for 2002; Palan, Murphy, and Chavagneux (2010) write that6

Similar anomalies are observable at the flow level. In the world’s balance of payments published by theInternational Monetary Fund, more income is systematically paid than received. In 2015, the gap reached$255 billion. This gap can be decomposed into a primary income discrepancy of $78 billion, and a secondary
income discrepancy of $177 billion. In practice, it is difficult to separate cross-border primary income (which
in principle should include cross-border dividends and interest) from cross-border secondary income (which inprinciple should mostly include remittances).
7
Because of valuation effects on the equities held offshore, the ratio of offshore wealth to world GDP rises
during stock market booms and falls during busts. Another way to quantify the importance of offshore wealththat neutralizes valuations effects involves dividing it by the world’s household financial wealth. Offshore wealthappears to be stable at about 8% of global household financial wealth over the 2001-2015 period. Not all countries
publish financial accounts, however, so there is more uncertainty on global household financial wealth than GDP.

8

“the global rich held in 2007 approximately $12 trillion of their wealth in tax havens;” andHenry (2012) finds $21 to $32 trillion as of 2010. One limitation of Zucman’s (2013) methodology is that it only captures financial wealth, disregarding valuables, works of art, real estate,
and other non-financial assets.
Switzerland alone—where offshore wealth is directly observable in official statistics—hostsa large fraction of our estimated global amount of offshore wealth: 40% of the total in 2001,
peaking at 45%-50% in 2006-2007, and declining to 30% in recent years. The rest is held in
the other cross-border wealth management centers. Figure 2 shows where the world’s offshore
wealth is located, based on the amount of cross-border bank deposits managed in each offshore
center.8 While Switzerland has been declining since the financial crisis of 2008–2009, Asianoffshore centers have been on the rise. The increase in offshore wealth has been particularly
strong in Hong Kong. In 2007, Hong Kong managed less offshore wealth than Jersey, theBahamas or the Cayman Islands. From 2007 to 2015, its assets under management have been
multiplied by a factor of 6, and Hong Kong now ranks second behind Switzerland.9

4Country-by-Country Estimates of Offshore WealthIn order to estimate how much each country owns in tax havens, we start with the global amountof offshore wealth and allocate this total to each of the world’s country. We do this allocation
for the middle of 2007, when, by our estimate, a total of $5.6 trillion was held in tax havens
globally. Since close to half of the world’s offshore wealth was held in Switzerland in 2007, andthe Swiss data are of particularly high quality, we conduct our allocation in three steps. We firstestimate how much each country owns in Switzerland, then estimate how much each country
owns in the tax havens other than Switzerland, and last combine the two distributions. We
discuss each step in turn.
8
In order to compute the amount of offshore wealth in each offshore center, we assume that the ratio of
deposits to portfolio securities is the same everywhere. In addition, we use statistics published by domestic
central banks to estimate what fraction of cross-border bank deposits belong to households vs. corporations(see Johannesen and Zucman, 2014, for a discussion of these data) and we exclude all the wealth that belongs
to corporations. For instance, the available evidence suggests that about 90% of the cross-border bank deposits
in the United Kingdom belong to corporations, so we only include 10% of the UK’s bank deposits under theline “offshore wealth in the other European tax havens” in Figure 2. Generally speaking, most deposits tend
to belong to households in offshore centers specialized in private wealth management (such as Switzerland, theChannel Islands, Luxembourg, or Singapore) while most belong to corporations in big financial centers thatprovide a wide array of international financial services (such as the United Kingdom and the United States).
Our series therefore put a much higher weight on Switzerland or Luxembourg than on the U.K. or the U.S. For
complete details, see the computations in the online Excel Appendix Table A2, and the online computer code.
9
See Appendix Figure 2a, 2b, and 2c; and Appendix Tables 2a, 2b, and 2c.

9

4.1

Who Owns the Wealth in Switzerland?

The Swiss central bank has been publishing a country-by-country breakdown of the wealthowned by foreigners in Swiss banks annually since the 1970s. These data cover all the banks
located in Switzerland, including the subsidiaries of foreign banks and excluding the subsidiaries
of Swiss banks abroad. They provide information on a specific type of wealth, known as fiduciary
deposits, which is large and likely to be representative of all the offshore wealth managed by
Swiss banks. Fiduciary deposits are akin to money market funds: Swiss banks invest the money
put in fiduciary deposits in foreign money markets on behalf of their clients. Legally speaking,all interest is considered to be paid by foreigners to the depositors, with the Swiss banks acting
merely as “fiduciaries.” For that reason, interest earned on fiduciary deposits is not taxed in
Switzerland, contrary to interest earned on regular bank deposits, which is subject to a 35%
withholding tax. Fiduciary deposits cannot be used as a medium of exchange: they are uselessfor multinational corporations; in all likelihood they entirely belong to tax-avoiding (or taxevading) households (see Zucman, 2013). In 2007, fiduciary deposits accounted for about 25%of all the offshore wealth managed by Swiss banks.10
The main difficulty raised by the Swiss data is that a large fraction of the wealth, including
fiduciary deposits, held in Switzerland—as in most other offshore centers—belongs on paper
to shell companies, trusts, foundations, and personal holding companies incorporated in othertax havens. As a result, a significant fraction of the offshore wealth managed by Swiss banks
is assigned to the British Virgin Islands, Panama, or Jersey in the statistics. The use of shellcompanies increased after 2005, when in the context of a law known as the Saving Tax Directive,
the European Union introduced a tax on interest income earned by E.U. residents in Switzerlandand other tax havens. Because the tax did not apply to accounts nominally owned by shellcompanies, European depositors massively shifted their assets to shell companies (see Zucman
2013; Johannesen 2014; Johannesen and Zucman 2014; Roussille 2015).
To address this issue, we estimate the country distribution of the offshore wealth managed
by Swiss banks by using the data for 2003–2004, just before the EU Saving Tax Directive enters
into force. Before the Directive, there is no particular evidence that residents of some countries
used shell corporations more than others (while after 2005, Europeans are more likely to doso). We assume that if a country owns 10% of the wealth not owned via shell companies in
2003-2004, it also owns 10% of the wealth owned via such shells. Figure 3 shows the resulting
10

Since 2008, the share of fiduciary deposits has declined to less than 10%, because short-term interest rates
have fallen to zero or close to zero.

10

distribution of the offshore wealth held in Switzerland. Countries above the 45-degree line own
a greater share of Swiss wealth than their share of world GDP would imply. This group isheterogeneous: it includes Middle-Eastern oil exporters (Saudi Arabia, United Arab Emirates),a number of Continental European and Latin American countries (Spain, France, Belgium,
Argentina, Venezuela), and various autocracies (Egypt, Jordan). The group of countries that
do not own much wealth in Switzerland relative to the size of their economy is diverse too,encompassing high-tax Scandinavian countries (Denmark, Norway, Sweden), low-tax OECD
countries (Japan and South Korea), democracies (India), alongside autocracies (China).
To assess the robustness of the distribution shown in Figure 3, we use data leaked fromHSBC Switzerland, the Swiss subsidiary of the banking giant HSBC, analyzed in Alstadsæter,Johannesen, and Zucman (2017). In 2007 a systems engineer, Hervé Falciani, extracted thecomplete list of HSBC Switzerland’s 30,412 clients and of their holdings, which totaled $118.4
billion. A country-by-country breakdown of the wealth held at HSBC Switzerland is publishedby the International Consortium of Investigate Journalists.11 These statistics only cover one(important) bank, but they have a key advantage: in most cases, the files leaked by Falciani allow
to link the accounts owned by shell companies to their actual owner. As shown in Alstadsæter,Johannesen, and Zucman (2017, Figure 2), the country distribution of the wealth managed by
HSBC Switzerland turns outs to be remarkably similar to the distribution we estimate for theentire Swiss banking industry.

4.2

Offshore Wealth in the Tax Havens Other than Switzerland

Most tax havens other than Switzerland also compile statistics on who owns wealth in theirbanks. Until recently they did not publish them, but this changed in 2016 when many offshore centers authorized the Bank for International Settlements to disseminate bilateral banking
statistics (e.g., the amount of deposits owned by Indian residents in Hong Kong). Importantly,
these series are retrospective, and go back in most cases to the early 2000s, or even earlier. As of
August 2017, Guernsey, Hong Kong, the Isle of Man, Jersey, Luxembourg, Macao, and Switzerland reported bilateral current and historical banking statistics through the BIS. A number ofoffshore centers still did not, most notably the Bahamas, Singapore, and the Cayman Islands.
The deposits owned in these centers, however, can be estimated as a residual.
The BIS bilateral banking statistics are generally of high quality. All banks above a modest
size threshold (typically about 10 million dollars in assets) have to report. The data have been11

http://projects.icij.org/swiss-leaks/.

11collected for a long time—sometimes as far back as the 1970s—and reporting practices have
improved over time. This paper is not the first to use these data for research purposes (see, e.g.,
Johannesen and Zucman, 2014); a number of prior studies obtained access to them when they
were available to some institutions (e.g., central banks) with strict confidentiality agreements.
However these agreements typically prohibited publication of statistics at the bilateral level, so
the data could not be used to construct estimates of offshore wealth. The BIS data distinguishthe deposits belonging to bank versus non-banks; all our analysis in this paper uses data on thedeposits owned by non-banks only. That is, we always exclude interbank deposits, which do notreflect households offshore wealth.
The main limitation of the BIS data is that deposits only account for a fraction of total
offshore wealth, so we need to make assumptions. We assume that if Indians own 10% of
the deposits belonging to foreign non-banks in Hong Kong, then they also own 10% of thehousehold offshore wealth held there—i.e., that the distribution of deposits is the same as thatof offshore wealth. In practice, the correlation between the two distributions is likely to be highbut imperfect. For instance, U.S. corporations may own the bulk of the bank deposits in the
Cayman Islands, while U.S. households might own a smaller fraction of the total offshore wealthin the Caymans. With the data at our disposal, we cannot quantify the size of the potential
bias. Its impact on our country-by-country offshore wealth estimates is likely to be limited,
however, because in 2007 close to half of all offshore wealth was held in Switzerland, where thedata allow us to tease out corporations from households.12
Figure 4 contrasts the distribution of the wealth held in Switzerland and in the other offshore
centers. Countries below the 45-degree line tend to favor Switzerland, while countries above it
tend to favor the other private wealth management centers—among which the largest in 2007
were Singapore, Luxembourg, Jersey, and the Cayman Islands. We find that Asian economies
typically have a small fraction of the wealth in Switzerland, but a higher fraction of that managed
12

To better approximate the distribution of households’ offshore wealth, we also reduce the deposits ownedin BIS-reporting tax havens by countries where the headquarters of multinational companies tend to be incorporated, namely the Netherlands, the United Kingdom, Belgium, Ireland, and the United States; see online
computer code. This correction enables us to avoid attributing too much offshore wealth to the households
of countries that host large international financial centers and/or company group holdings. Note that among“non-bank” depositors, the BIS data distinguish “non-bank financial” and ”non-bank non-financial” depositors.
This breakdown could in principle be used to more closely approximate the deposits of households. But many
countries do not report this decomposition. Moreover, it does not allow one to remove the deposits of multinational companies satisfactorily. Wealthy households typically use financial holding companies as the nominal
owners of their assets, in which case their deposits are assigned to “non-bank financial” owners—so one does notwant to exclude “non-bank financial” depositors altogether. And among non-bank non-financial depositors, nobreakdown is available between households and non-financial corporations (other than shell companies). Looking
forward, new data that better isolate the household sector would make it possible to refine our estimates.

12

elsewhere (due in particular to Singapore, which caters largely to Asian investors). Russia has
both a lot of wealth in Switzerland and in the other tax havens, mostly Cyprus. A number ofEuropean countries, such as France, Belgium, Portugal, are close to the 45-degree line, as theyown a large fraction of the wealth managed in Luxembourg and Jersey. Middle-Eastern countries
overwhelmingly favor Switzerland, probably in part for historical reasons, since Switzerland was
the only banking center with a developed wealth management industry at the time of the oilboom of the 1970s.

4.3Country-by-Country Estimates of Offshore Wealth

We obtain country-by-country estimates of offshore wealth by adding up the wealth held in
Switzerland and in the other tax havens. The results are reported in Figure 5, where we show
the ratio of offshore wealth to GDP for all countries with more than $200 billion in GDP in
2007.13 For Russia, we report two estimates: one following the same methodology as for allother countries, and another one obtained by cumulating net errors and omissions following themethodology described in Novokmet, Piketty, and Zucman (2017). This alternative estimate
is broader in scope, at it includes real assets owned offshore (instead of financial assets only),
and the wealth of non-residents (which is large in the Russian context) on top of offshore assets
belonging to residents only.
We find that while the equivalent of about 10% of world GDP is held in tax havens globally,
this fraction varies a lot across countries. As shown by Figure 5, Scandinavian countries own
the equivalent of only a few percent of GDP in offshore wealth, but this figure rises to about
15% in Continental Europe, and to as much as 60% in Russia, Gulf countries, and a number of
Latin American countries. The size of offshore wealth is not easily explained by tax, financial or
institutional factors. Among countries with a large stock of offshore assets, one finds autocracies(Saudi Arabia), countries with a recent history of autocratic rule (Argentina, Greece), alongside
old democracies (United Kingdom, France). One also finds countries with a highly developed
domestic financial industry (Belgium, Germany) alongside countries with poorly developed financial institutions (Venezuela) as measured by Čihák et al. (2012). Among countries with thelowest stock of offshore assets, one finds low-tax economies (Korea) alongside the world’s highest
tax countries (Denmark, Norway). Instead, geography and specific national trajectories seem tomatter a great deal. Proximity to Switzerland—the first country that developed a cross-borderwealth management industry, in the 1920s—is associated with higher offshore wealth, as is the13

Results for all countries are presented in Appendix Table A.3. See also Appendix Figure A.4 (for Africancountries), A.5 (for Asian countries), A.6 (for European countries), and A.7 (for Latin America).

13presence of natural resources, and political and economic instability post-World War II. These
patterns are consistent with the analysis of Andersen et al. (2017), who find that flows to tax
havens vary systematically with windfall gains in the oil industry and political shocks, such as
elections and coups.
A case in point is the contrast between Russia (where private and offshore wealth boomed in
the 2000s as oil and gas prices rose) and China. According to our estimates, the offshore wealthof China amounts to only 2.3% of its GDP, 20 times less than in Russia—when using net error
and omissions to estimate Russia’s offshore wealth—or 6 times less when relying on the BIS
data. However, one should keep in mind that these estimates are for 2007, at a time when Hong
Kong still played a minor role in cross-border wealth management. Because of the boom inthe Hong Kong private banking industry, it is likely that China’s offshore wealth has increased
since 2007. Estimating the offshore wealth of China in recent years raises complicated issues,
however, due to the changing integration of Macao and Hong Kong with mainland China, andthe rise of shell companies. We leave this task to future research.
As with any attempt to measure the unrecorded economy, our country-by-country estimatesof offshore wealth involve a margin of error. However, we believe that they are globally reliable,
for one simple reason: by construction our country figures sum up to the world’s offshore wealth,which itself is by design fully consistent with the international investment positions of countries,
central bank data, and official statistics published by tax havens—and is at the low-end of thescale of available estimates (Figure 1). Our figures can all be reproduced step-by-step using
publicly available statistics; we therefore see them as a useful starting point. To assess theirreliability, we conduct the following robustness checks: we compare our estimates of offshore
wealth to data that have become available in 2016 in the context of the Panama Papers.

4.4

Robustness Test: Comparison with the Panama Papers

In the Spring of 2016, the International Consortium of Investigative Journalists published thenames and addresses of the owners of all the shell companies created by the Panamanian firm
Mossack-Fonseca. This leak, known as the Panama Papers, provides information on shell corporations that were created over two decades. At the time of the leak, Mossack-Fonseca wasa major provider of offshore financial service; the available evidence suggests it was one of theworld’s five largest purveyor of shell companies. It is therefore informative to analyze who theowners of the shell corporations created by this firm are.
Figure 6 depicts the number of unique owners of shell companies created by Mossack-Fonseca

14

in each of the world’s country (normalized by 2007 GDP). The sample includes all the owners ofshell companies that were created by Mossack-Fonseca before 2006 and were still active in 2007.
For instance, there are 2,071 unique Russian owners of such shells.14 There are strong similarities
between the amount of offshore wealth we estimate and the use of tax havens as revealed by
the Panama Papers. Among the countries that created a lot of shell companies (relative to thesize of their economy), one finds Jordan, Russia, Taiwan, the U.A.E., Venezuela, Zimbabwe,
Kenya—which all have high offshore wealth to GDP ratios. The main exception is China,
which is over-represented in the Mossack-Fonseca data. One interpretation is that Chinese
residents do not use shell companies to conceal wealth in foreign banks, but to circumvent
a number of regulations that restrict cross-border investments in and out of China. Anotherpossible interpretation is that we under-estimate the amount of Chinese offshore wealth—maybe
precisely because an abnormally high fraction of it is held through shell companies.15
Restricting the analysis to high-tax OECD countries, Figure 7 shows that there is a strong
correlation between how much each country owns in wealth offshore, and the number of ownersof Mossack-Fonseca shell companies. Greece, by our estimate, owns the equivalent of 40% of its
GDP in offshore wealth, and it turns out it also features prominently in the Panama Papers. At
the other end of the spectrum, Scandinavian countries have low stock of offshore wealth and few
owners of Mossack-Fonseca shell companies. Overall, these findings corroborate the view that
our country-by-country estimates of offshore wealth are likely to be reliable. Looking forward,
new leaks or improvements in financial transparency might enable us to improve our estimates.

5

Implications for Top Wealth Shares

In this Section, we investigate the implications of offshore wealth for the measurement of wealthinequality. Over the last few years, a number of studies have estimated top wealth shares using
tax data. As a result, we now have access to wealth distribution estimates that are reasonably
comparable for ten countries, which together accounted for close to half of world GDP (using
14

See Appendix Table A.4. Our results are consistent with the findings of Omartian (2017), who uses the
Panama Papers to study the impact of information exchange agreements on the creation of shell companies.
15
In addition to China, a number of low-tax countries—in particular in Eastern Europe (Estonia, Latvia,
Moldova, etc.)—appear to own a lot of shell companies and yet according to our estimates don’t own muchoffshore wealth. The most likely explanation is that the owner of a shell company can be another shell company,
typically incorporated in a low-tax country; hence the addresses of registered owners in the Panama Papers leak
do not always reflect the country of residence of the ultimate owners. To deal with this issue, in Figure 6 we
exclude owners who own more than 10 different shell companies and owners with addresses in tax havens, bothof which are likely to be nominees (such as other shell companies) instead of actual persons. But countries like
Estonia, Latvia, and Moldova are not classified as tax havens in standard lists, and it is likely that most of theshells assigned to Estonian or Latvian owners actually belong to persons domiciled in other countries.

15

market exchange rates) in the 2000s: Denmark, Finland, France, the Netherlands, Norway,
Russia, Spain, Sweden, the United Kingdom, and the United States. We investigate how taking
offshore wealth into account modifies wealth inequality in these ten countries, focusing on the
2000s.16

5.1

Methodology to Correct Top Wealth Shares

To correct top wealth shares, we start from our estimate of the stock of offshore wealth owned
by each country. From there we need two ingredients: what fraction of the wealth held offshoreis visible in the data used to estimate wealth concentration (typically, tax records), and how
offshore assets are distributed across wealth groups. We discuss these two ingredients in turn.
First, there is a great deal of evidence that the vast majority of offshore wealth was notreported on tax returns in the 2000s. Two U.S. Senate (2008, 2014) reports found that 90% of
the wealth held by U.S. citizens at UBS and Credit Suisse was undeclared in 2008; Johannesen
and Zucman (2014) and Roussille (2015) find that 90% of the wealth held by Europeans in
Switzerland was undeclared; 90%–95% of the wealth owned by Danish and Norwegian households at HSBC Swtizerland was not declared either (Alstadsæter, Johannesen, and Zucman,2017). Even when no illegal tax evasion is involved, offshore wealth is typically structured in a
way that it does not generate taxable income nor reportable assets. This is done by combining
trusts, foundations, and holding companies, so as to disconnect assets from their beneficial owners (Harrington, 2016). These arrangements can be legal or illegal, but typically imply that tax
authorities will not observe much offshore wealth or investment income earned offshore, except
in exceptional circumstances (e.g., a taxable and properly declared inter-generational transfer ofassets). In this paper, we do not take a stance on what fraction of offshore assets illegally evadetaxes, but we assume that offshore wealth was not visible to tax authorities in the 2000s. Since
our estimates of offshore wealth are conservative, we do not believe our overall methodology
overstates the importance of offshore assets for the measurement of inequality.
Second, we distribute the macro stock of offshore wealth across wealth groups based on
how offshore assets are distributed in the micro-data studied by Alstadsæter, Johannesen, andZucman (2017), namely the HSBC leak (discussed in Section 4 above) and large samples of
Scandinavian taxpayers who voluntarily disclosed previously hidden assets in the context oftax amnesties. Offshore wealth is similarly distributed in both data sources, and extremely
concentrated: about 80% of it belongs to the top 0.1% richest households, and about 50% to the16

For two countries, Finland and Netherlands, no estimates of the top 0.01% wealth share are available, sowhen investigating the impact of offshore wealth on the top 0.01%, our sample is restricted to eight countries.

16

top 0.01%. There is no evidence that HSBC Switzerland catered to ultra-wealthy individuals
only, nor that only the very rich use tax amnesties (in fact, the available evidence suggeststhat self-selection into amnesties is slightly negatively correlated with wealth; see Alstadsæter,Johannesen, and Zucman, 2017, Section 3). We therefore view these distributions as a reasonable
starting point. Of course, it is unlikely that offshore wealth is distributed in exactly the sameway in all the world’s countries; but it is also highly unlikely that a large fraction of it belongs
to households in the bottom 99% of the wealth distribution. Offshore private banks typicallyrequire customers to have a minimum amount of financial assets to invest (e.g., $1 million, or$10 million—levels of financial wealth above which one is typically in the top 1% or top 0.1%,
respectively). In the Online Appendix Tables A.9, A.10, and A.11, we consider how different
distributions affect our results; for all plausible distributions, the impact on our findings issecond-order.

5.2

How Offshore Wealth Affects Top Wealth Share

Figure 8 shows the top 0.01% wealth share in our sample of countries, including versus excluding
offshore wealth. We find that accounting for offshore assets increases the top 0.01% wealth share
substantially, even in countries—such as Scandinavian economies—that do not use tax havens
extensively. The magnitude of the effect, however, varies a lot across countries. In Scandinavia,
the top 0.01% wealth share rises from about 4% to about 5%. Offshore wealth has a larger
effect on inequality in the U.K., Spain, and France, where, by our estimates, 30%–40% of all
the wealth of the 0.01% richest households is held abroad. While France appears more equal
than Scandinavia when disregarding offshore assets, it becomes more unequal when factoring
it in. The United Kingdom—which, according to Alvaredo, Atkinson and Morelli (2017), ismore equal than Scandinavia and France—becomes comparable to these economies. Offshore
wealth has dramatic implications in Russia, where the vast majority of wealth at the top is held
outside of the country. In the United States, offshore wealth also increases inequality, but theeffect is more muted than in Europe, because U.S. top wealth shares are already very high evendisregarding tax havens.17 We obtain similar qualitative results for the top 0.1% wealth share(see Appendix Figure A.11).
Taking offshore wealth into account also increases the rise in inequality seen in tax data
markedly. In Figure 9, we correct the top 0.01% wealth share of France and the United Kingdom
17
Because most income at the top of the distribution (close to 100% for the top 0.01% and upper groups)
derives from wealth, our results imply that the very top income shares are also similarly under-estimated, by asimilar proportional factor.

17

as far back as 1950. To do so, we assume that prior to the 2000s, the stock of offshore assets
owned by these two countries followed the same evolution as the overall amount of offshore
wealth managed by Swiss banks (and that hidden wealth was as concentrated in the past as
today). Although a sizable margin of error is involved here, the broad patterns are likely to
be robust: all the available evidence suggests that although the wealth held by Europeans in
Switzerland was already far from insignificant in the post-World War II decades, it is in the
1980s and 1990s that it grew the most.18 According to our estimates, once offshore wealthis factored in, the top 0.01% wealth share is now significantly higher in France today than it
was in the early 1950s—contrary to what the raw estimates of Garbinti, Goupille and Piketty(2017) suggest. This result highlights the importance of looking beyond tax data to study
wealth accumulation among the very rich in a globalized world.19 The effect of offshore wealthon the dynamic of wealth concentration is less marked in the United Kingdom, because wealthinequality was much higher in the U.K. in the 1950s than in France (with a top 0.01% wealthshare more than twice higher: 10% vs. 4%).
Figure 10 shows the long-run evolution of the top 0.01% wealth share in Scandinavia, other
European countries, and the United States. There are two notable findings. First, when including offshore assets, we find that Scandinavia and other European countries have experienced
very similar trends in wealth concentration at the top over the twentieth century. Wealth concentration at the very top appears to have returned to its level of the 1950s, with a U-shaped
evolution from the 1950s to today. Second, despite the more prevalent use of tax havens byContinental European countries, we find that wealth is much more concentrated in the UnitedStates. In fact, the top 0.01% wealth share in the U.S. is as high as in early 20th century
Europe.
We stress that our estimates of offshore wealth before the 2000s have a greater margin of error
than those available for the 21st century. The main source of uncertainty involves the macro
amount of wealth held offshore by each country. Moreover, it is possible that the distributionof offshore wealth might have changed over time. Financial innovation and globalization might18

In the 1990s, two international commissions got access to the archives of Swiss banks. Drawing on thework of these commissions, Zucman (2015, chapter 1) constructs historical series for the amount of foreign
wealth managed by Swiss banks back to the early twentieth century. We refer to Zucman (2015) for a detailed
description of these series.
19
One caveat, however, is that the fraction of offshore wealth duly declared to tax authorities (hence potentiallyobservable in tax data) may have increased since 2013, when many tax havens promised to exchange bankinformation automatically with foreign tax authorities (in most cases starting in 2017-2018). Because theycannot easily be audited by foreign governments, and because some of them might still find it profitable to selltax evasion services, it is unclear how successful this form of reporting will turn out to be. Evaluating the effectof these recent policies is an important area for future research.

18

have made it easier for only moderately wealthy individuals to hide assets abroad starting in
the 1990s and 2000s. Offshore wealth might thus have been even more concentrated back inthe 1950s and 1960s than it is today. Is is interesting to note, however, that offshore wealth isalready extremely concentrated in 2007—the top 0.1% owns about 80% of it. Even if the top
0.1% owned 100% of it in the 1950s, the effect on our time-series would be second-order.

6

Conclusion

In this paper we attempt to improve the measurement of wealth inequality by constructing new
estimates of the amount of household wealth held offshore, and investigating the implications ofoffshore assets for top wealth shares. We make two main contributions. First, drawing on newly
released statistics on cross-border bank deposits, we provide country-by-country estimates of theamount of offshore wealth owned by each of the world’s country. The equivalent of about 10% ofworld GDP is held offshore globally, but this average masks a great deal of heterogeneity—froma few percent of GDP in Scandinavia, to about 15% in Continental Europe, and more than 50%
in Russia, some Latin American countries, and Gulf countries.
Second, we investigate the implication of this hidden wealth for top wealth shares in a sample
of 10 economies for which comparable wealth inequality statistics exist. Accounting for offshore
assets increases the level and the rise of top wealth shares seen in tax data, but the magnitude ofthe effect varies across countries. Offshore wealth has particularly dramatic implications for theRussian wealth distribution, where, by our estimates, around 60% of the wealth of the richest
households is held offshore. More broadly, offshore wealth is likely to have major implications
for the concentration of wealth in many of the world’s developing countries, hence for the world
distribution of income and wealth, which is the subject of growing interest (e.g., Lakner and
Milanovic, 2013).
Looking forward, we hope to systematize our approach to more countries, as new estimatesof wealth distributions become available for more economies. Our estimates could also be
refined as new data emerges on the level and distribution of offshore assets. Despite some
progress in curbing bank secrecy in recent years, very little has been achieved in terms ofstatistical transparency. With the exception of Switzerland, no major financial center publishes
comprehensive statistics on the amount of foreign wealth managed by its banks. Such opacity
makes it hard to measure the evolution of global wealth and its distribution. Improving statistics
on offshore wealth should be a priority for policy-makers in this area.

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22

The global
amounthouseholdwealthhavensFigure1: Theglobal ofamountof wealthin intaxtaxhavens14%

Global offshore wealth
(BCG)

12%

% of world GDP

10%
8%Global offshore wealth(Our estimate)

6%
4%

2015

2014

2013

2012

2011

2009

2008

2007

2006

2005

2004

2003

2002

2001

0%

2010

Offshore wealth in Switzerland(Swiss National Bank)

2%

Notes: This figure plots the global amount of wealth owned by households in all the world’s tax havens at the end of each year, as a fraction of world GDP.
The bottom line shows the offshore wealth held in Swiss banks, estimated from the Swiss National Bank’s monthly banking statistics. The middle curveshows our estimate, obtained by applying the methodology in Zucman (2013) and updating the results to 2015. The top line shows the estimate from the
Boston Consulting Group, as published annually in the BCG’s “Global wealth report”. Source: Appendix Table A.1.

Figure 2: Where is the world’s offshore wealth?

Where is the wealth in tax havens?

Switzerland
40%

Other European tax havens
30%

20%

Asian tax havens

2015

2014

2013

2012

2011

2009

2008

2007

2006

2005

2004

2003

0%

2002

10%

2010

American tax havens

2001% of the wealth held in all tax havens

50%

Notes: This figure plots the share of global offshore wealth managed in Switzerland, in the other European offshore centers (Cyprus, Guernesey, Jersey,
Isle of Man, Luxembourg, Austria, Belgium, and the United Kingdom), in the Asian offshore centers (defined as Hong Kong, Singapore, Macao, Malaysia,
Bahrain, as well as the Bahamas, Bermuda, and the Netherland Antilles—see text), and in the American offshore centers (defined as the Cayman Islands,
Panama, and the United States—see text). Source: Appendix Table A.2

Figure 3: Who owns the wealth in Switzerland?

8%

France0%

Share of Swiss bank deposits
2%
4%
6%

Saudi
German
UAE

UK
Spain

VenezuArgentTurkeyGreeceIsraelBrazilRussiaMexicoBelgiuEgypt
CanadaJordanPortugIndia
SwedenAustra
Nether
Korea
DenmarNorway0%

2%

4%
Share of world GDP

Japan
China

6%

8%

Notes: This figure plots for each country its share in the total amount of offshore wealth managed by Swiss banks against its share in world GDP. The blackline is the 45-degree line. Countries above the 45-degree line own more wealth in Switzerland than their share of world GDP would imply, and vice versa
for countries below the 45-degree line. All data are for 2007. Source: Swiss National bank and World Bank; see Appendix Table A.3.

Share of deposits in tax havens other than Switzerland
0%
2%
4%
6%
8%

Figure 4: Who owns the wealth in the tax havens other than Switzerland?

FranceRussia

Japan

China
TaiwanAustraBelgiuTurkeyPortugMexico Greece
BrazilArgentJordan Egypt
Israel0%

Saudi

Canada

2%

Spain

UAE

Venezu4%
6%
Share of deposits in Switzerland

8%

Notes: This figure plots for each country its share in the total amount of offshore wealth held in the tax havens other than Switzerland, against its share in
the total amount of offshore wealth held in Switzerland. The black line is the 45-degree line. Countries below the 45-degree line tend to favor Switzerland
rather than other offshore financial centers, and vice versa for countries above the 45-degree line. All data are for 2007. Tax havens other than Switzerland
include: Cyprus, Guernesey, Jersey, Isle of Man, Luxembourg, Austria, Belgium, the United Kingdom, Hong Kong, Singapore, Macao, Malaysia, Bahrain,
the Bahamas, Bermuda, the Netherland Antilles, the Cayman Islands, Panama, and the United States. The United States is not displayed on the graphdue to its outlier status; it owns a much greater share of the assets held outside of Switzerland (33%) than in Switzerland (3%). Source: Swiss Nationalbank and Bank for International Settlements; see Appendix Table A.3.

wealth%/ GDP
Figure 5:Offshore
Offshore wealth,of GDP(All countries with GDP > $200 billion in 2007)
70%
60%
50%
40%
30%
20%

0%

Korea
PolandChina
Denmark
FinlandJapan
India
NorwayIndonesia
CanadaIran
SwedenNetherlands
BrazilAustralia
MexicoUSA
Austria
Thailand
Colombia
IrelandSpain
South Africa
Italy
RussiaFranceGermany
UK
Belgium
TurkeyPortugal
TaiwanGreeceArgentina
Russia (NEO)Saudi Arabia
Venezuela
UAE

10%World average: 9.8%

Notes: This figure shows the amount of household wealth owned offshore as a percentage of GDP, in 2007. The sample includes all the world’s countries
with more than $200 billion in GDP in 2007. Offshore wealth is estimated by allocating the global offshore wealth estimated by Zucman (2013), on thebasis on the geographical distribution of bilateral cross-border bank deposits in offshore centers—see text. For Russia, we also report an alternative estimate(“Russia (NEO)”) obtained by cumulating net errors and omissions in the balance of payment, as estimated in Novokmet, Piketty and Zucman (2017).
Source: Appendix Table A.3

Figure 6: Propensity to own “Panama Papers” shell companies

Notes: This map depicts the number of unique owners of shell companies created by the Panamanian firm Mossack-Fonseca, normalized by 2007 GDP inbillion current US$. The sample includes all the owners of shell companies created by Mossack-Fonseca before 2006 and active in 2007. For instance, there
are 2,071 unique Russian owners of shell companies created by Mossack Fonseca before 2006 and active in 2007. Note that an owner of a shell company canbe another shell company, hence the addresses of registered owners do not always reflect the country of residence of the ultimate owners. To deal with thisissue, we exclude owners who own more than 10 different shell companies and owners with addresses in tax havens, both of which are likely to be nominees(such as other shell companies) instead of actual persons. Source: ICIJ (https://panamapapers.icij.org); see Appendix Table A.4

United Kingdom

GreeceBelgium

Sweden USA
Netherlands
FinlandJapan Slovakia
Denmark

Portugal

Italy
Spain
Austria

FranceGermany0%

Panama Papers shell companies / GDP
10%
20%
30%
40%
50%

Figure 7: Offshore wealth vs. ownership of Panama Papers shell companies

0%

10%

20%
Offshore wealth / GDP

30%

40%

Notes: This figure plots the number of unique owners of shell companies created before 2006 by the firm Mossack-Fonseca and active in 2007, against theamont of wealth held offshore in 2007, in billion US$. Both variables are normalized by 2007 GDP in billion current US$. For example, there are 119 unique
Greek shareholders of Mossack-Fonseca shell companies, about 0.4 for each billion of Greek output. The sample includes the United States, Japan, and all
European countries with a statutory corporate tax rate above 20%, excluding tax havens (Switzerland and Luxembourg). The red line is the regression
line. Source: OECD Tax Database (http://stats.oecd.org/index.aspx?DataSetCode=TABLE_II1) and Appendix Tables A.3 and A.4.

Figure 8: The top 0.01% wealth share and its composition (2000-2009)

The top 0.01% wealth share and its composition

12%% of total household wealth

10%

Offshore wealth
All wealth excluding offshore

8%

6%

4%

2%

0%
Spain

UK

Scandinavia

FranceUSA

RussiaNotes: This figure plots the level and composition of the top 0.01% wealth share on average over the 2000–2009 period. Source: Appendix Tables 8b and11b. Scandinavia is the arithmetic average of Norway, Sweden, and Denmark.

Figure 9: Effect of offshore wealth on the dynamic of the top 0.01%
Panel A:Top
0.01%
wealthshare
FranceTop
0.01%
wealthshare
in inFrance6%% of household wealth5%

offshore
wealth

4%

3%

2%

1%

2010

2005

2000

1995

1990

1985

1980

1975

1970

1965

1960

1955

0%

1950

All wealth excluding held offshore

Panel B: Top
Top0.01%
0.01%wealthwealthshare
share inin thethe United
UnitedKingdom
Kingdom
10%9%% of household wealth

8%
7%
6%
5%

offshore
wealth

4%
3%
2%

2005

2000

1995

1990

1985

1980

1975

1970

1965

1960

1950

0%

1955

All wealth excluding
held offshore

1%

Notes: This graph shows the evolution and the composition of the top 0.01% wealth share in France (top panel)and the U.K. (bottom panel), isolating offshore wealth and all other assets (financial and non-financial, net ofdebts). Source: Appendix Table A.11.

Top
wealthsharehiddenwealthFigure10:0.01%
Top 0.01%
wealthshare including
including offshore
wealth12%EuropeUnited States

9%

6%

Scandinavia

3%

0%
1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

Notes: This figure plots the long-run evolution of the top 0.01% wealth share in the United States, Europe, and Scandinavia. Europe is the arithmetic
average of the United Kingdom, France, and Spain; Scandinavia the average of Norway, Sweden, and Denmark. Each dot represents a decennial average:1910 denotes the average of 1900, 1901, ..., 1909; 2000 denotes the average of 2000, 2001, ..., 2009. Source: Appendix Table A.11b.