Some of the work simply involves speeding up initiatives already under way. The government has already required corporate directors to know exactly what their companies do or answer personally for those companies. The entire Hong Kong financial and professional services industry has spent years and about US$11 billion a year to comply with the ever-growing anti-money-laundering laws coming out of Tamar.

Depressingly, however, these represent only baby steps on a longer road.

As we discuss the options in the months and years ahead, we may wish to look at proposals from noted legal scholars. Many of these regulations already exist in other jurisdictions, and aim to refine regulations to separate legitimate practices from unsavoury ones.

One proposal deals with tackling shell companies. Reforms to the Companies Ordinance could prevent the formation or use of companies without a “significant business purpose based on the direct offer of goods and services”. As such, firms would no longer be able to set up companies with the sole purpose of protecting them from legal liability, hiding final ownership, or reducing tax liability.

Companies could be automatically dissolved if they did not have “an annual meeting and directors’ deliberations” conducted “in a way that a common person might deem that the business engages in a substantive, economic purpose”.

And what about the “special purpose vehicles” that make up a large share of incorporated companies in jurisdictions like Hong Kong? Some academics might require that special purpose vehicles (corporations that simply hold assets and issue shares which different people can hold) have an “SPV” designation. Any limited liability companies or limited companies without employees and income derived from the transformation of inputs into outputs should have the acronym “SPV” in their official name. In this way, investors in minibonds would have known that a company called Pacific International Finance Limited SPV was not a “real” company.

A “real premises rule” would mean “postbox companies” could no longer register, list, or take on financial obligations in Hong Kong. Nor could companies set up in so-called postbox warehouse

jurisdictions. You already know where these jurisdictions are – they host the buildings you see on television with thousands of companies registered in them but with few employees or little office work taking place. Any company from a jurisdiction allowing such postbox warehouses would need to prove their official address corresponds to a site of significant economic activity.

How can Hong Kong clean up listed companies? A large share of the city’s listed companies come from the British Virgin Islands, the Cayman Islands and other secretive jurisdictions. One proposal might include dividing the main board of listed companies into two – a Hong Kong main board and an offshore board. Companies registered in, or doing business through, the British Virgin Islands, the Caymans, Bermuda or Panama could only list on the offshore board. Such a move (in advocates’ minds) would at least let investors discern which companies the Securities and Futures Commission and Hong Kong Monetary Authority can really supervise from those it only kind-of supervises.

Doesn’t anyone else think it was crazy to include British Virgin Islands and Panamanian rules in Hong Kong’s own Company Secretary’s Handbook (which was at least the case until recently)?

Other possibilities abound. Rules could require listed companies to publicly post online all their professional services agents for commercial transactions, or at least require their disclosure if they use “industrial corporate services agents”. These agents derive at least 80 per cent of their income solely from incorporating and registering business entities. Imagine if companies everywhere had to put the name Mossack Fonseca on their list of service providers, or face delisting?

Why doesn’t the Inland Revenue Department just require the withholding of 5 per cent of the value of revenues derived via jurisdictions allowing industrial-sized postbox premises hosting virtual companies? If a vehicle is set up in a jurisdiction which allows the industrial-scale use of the vehicles Mossack Fonseca dealt in, they would be made to leave a fee at the door (much like the much-reviled withholding scheme in the United States). The profitability of shell structures would then evaporate quickly.

What would then happen to Hong Kong’s company incorporation and secretarial services businesses? They would need to move up the value chain – offering more advisory business. The incorporation agents standing on Wan Chai bridge would go out of business. The directors and secretaries they

provide would face personal criminal liability.

At the heart of all these reforms lies the ending of the automatic recognition of entities incorporated offshore. Companies could no longer come from the British Virgin Islands without having a significant share of their revenue and assets actually produced there.

If Legislative Council members could pass reforms through a sexy-sounding law such as the Panama Papers (Companies Reform) Ordinance, so much the better.

Dr Bryane Michael is a senior fellow with the University of Hong Kong’s Asian Institute for International Financial Law