The Tax Justice Network (TJN) released the 2025 edition of its Financial Secrecy Index (FSI) on 3 June 2025, following on the previous edition released in 2022.
The key finding, says the organisation, is that those countries who provide the most financial secrecy are clearly moving towards autocracy. Of this year’s top 10, says TJN, eight saw worsening autocracy from 2018 to 2024 on the Liberal Democracy Index. Of the other two, Singapore saw a marginal but unimpressive improvement, while the US, which improved slightly during the Biden administration, is now seeing a “dramatic collapse in governance” that the 2024 Liberal Democracy Index has not yet captured.
“Countries topping the financial secrecy ranking have worsened their scores with democracy-monitoring watchdogs, including the US which ranks first again and was downgraded this year by the Polity Project from a democracy to an anocracy.”
The FSI is a ranking of jurisdictions – 141 in this edition – which fuel financial secrecy by helping individuals to launder money and hide their finances from the rule of law. Before 2025, the FSI was updated on a biennial basis but will now be updated on an ongoing basis. The latest edition is the eighth since 2009.
In terms of methodology, the index grades each country’s financial and legal system on 20 indicators, covering four key focus areas with more than 100 questions. This secrecy score runs from 0 to 100, where 0 is full transparency and 100 is full secrecy. TJN separately calculates the volume of financial services the country provides to non-residents, which the organisation uses as a measure of risk. The two figures are statistically combined, resulting in an FSI value which determines the rank. This is a more balanced method of scoring countries regarding the amount of financial secrecy they supply to the world, TJN says.
A higher rank on the index does not necessarily mean a jurisdiction has more secretive laws, says TJN, but indicates rather that the jurisdiction plays a bigger role globally in enabling activities related to financial secrecy.
“Jurisdictions with the highest secrecy scores are more opaque in the financial activities they host, less engaged in information sharing with other national authorities, and less compliant with international norms aimed at combating money laundering.”
This makes them more attractive for facilitating anonymous shell company ownership, anonymous real estate ownership, or other forms of financial secrecy, which in turn enable criminal and corrupt activities such as money laundering, illicit financial flows, tax evasion, and the evasion of sanctions.
The usual suspects
It’s the usual suspects, with the US sitting again at the top of the rankings. This year’s index shows this country’s FSI value to be a massive 2 018, equivalent to 5.66% of all secrecy services provided to the world. The second country on the list, Switzerland, scores comparatively modestly, at 1 398 or 3.92%, followed by Singapore at 1 228 or 3.44%.
Hong Kong, Luxembourg, Germany, Netherlands, South Korea, Guernsey, and Japan round out the top 10.
The developments among the top-ranking countries demonstrate the long-known risks of financial secrecy to democracies, says TJN. In addition, the EU in particular is exposed as a region that looks good on the surface but is highly complicit in enabling financial secrecy.
“A deeper evaluation of the tax transparency and co-operation instruments that EU countries adopted and scored favourably for on the ranking in the past reveals that most EU countries are deliberately operating less transparently and less co-operatively towards lower income countries, at times entirely negating the international instruments they ratified.”
Over half (56%) of EU countries are using an overlooked backdoor in international law to shield non-EU countries’ tax evaders from accountability – while not using the backdoor on each other, instead regularly assisting each other to deal with one another’s tax evaders.
This makes them “financial transparency leaders on paper and some of the world’s biggest suppliers of financial secrecy in practice, potentially carrying risks to democracy in and outside the EU”.
The EU now accounts for 21% of the world’s supply of financial secrecy, says TJN. Particularly harmful is their withholding of tax co-operation and transparency to lower income countries, who are more reliant on and in need of tax revenue and so are more vulnerable to tax evasion.
Given the bloc’s vehement push-back to the proposed UN tax convention – which will transfer the administration of global tax rules from the Organisation for Economic Cooperation and Development (OECD) to the UN and provide a more equitable system for non-OECD members – this hypocrisy is hardly surprising. It “puts in an unforgiving light the bloc’s resistance to work currently underway at the UN to reform international tax co-operation and transparency”, says TJN.
South Africa
South Africa sits some way down at 48 out of 141 countries under scrutiny. In the previous edition it ranked 46 out of 141, indicating a slight improvement in transparency. The country’s FSI value is 270, with a secrecy score of 62 (out of 100) and a secrecy share of just 0.76%. However, as the secrecy score indicates, there are several areas where improvement is needed.
In terms of asset and ownership registration, particularly the beneficial ownership of trusts, companies, and real estate, South Africa scored poorly. The new beneficial ownership register, which is now operational under the watchful eye of the Companies and Intellectual Property Commission, should go some way towards mitigating this situation.
South Africa also scored poorly in legal entity transparency, achieving full secrecy in the five indicators in that section. In terms of the integrity of tax and financial regulation, the country fared much better, while its strongest performance related to the last key focus area of international standards and co-operation.
Corruption stems from financial secrecy
Financial secrecy is a key facilitator of corruption, says TJN, because for corruption to thrive, opacity must be present. “Without financial secrecy, many corrupt deals simply would not be able to happen.”
TJN goes on to discuss Transparency International’s Corruption Perceptions Index, saying it shows what the organisation’s CEO Alex Cobham describes as ‘elite bias‘ toward poorer countries.
“The Corruption Perceptions Index ranks poor countries in Africa and elsewhere – predominantly the victims of an estimated US$1-trillion-odd in annual illicit financial outflows – as the ‘most corrupt’. But all these outflows must be received somewhere.”
The FSI examines the enablers, the organisation adds, “those jurisdictions that encourage and facilitate illicit financial flows, by providing an environment of secrecy that allows these outflows to remain hidden, and largely untaxed”.
The result is that many countries perceived to be the least corrupt by their citizens are actually among the worst offenders in enabling corruption and illicit financial flows in other countries.
“As long as tax havens and secrecy jurisdictions keep offering banking secrecy and the ability to hide other assets (real estate, gold, art), or the identities of criminals behind secretive companies, trusts, partnerships, or foundations, it will be impossible – both for poor countries and for rich ones – to stop the suffering resulting from corruption, tax evasion, money laundering, and other financial crimes.”
The 20 indicators used by the FSI to calculate secrecy scores
| Banking Secrecy | Tax compliance focus | |
| Beneficial ownership of trusts | Golden visas | |
| Beneficial ownership of foundations | Foreign investment income | |
| Beneficial ownership of companies | Public statistics | |
| Freeports ownership | Tax rulings and extractives industries’ contracts | |
| Real estate ownership | Anti-money laundering | |
| Transparency of partnerships with limited liability | Automatic exchange of information | |
| Transparency of company ownership | Exchange of information upon request | |
| Transparency of company accounts | International legal co-operation | |
| Public country-by-country reporting | ||
| Legal entity identifier |
