Hong Kong is beefing up its anti-money laundering and corporate disclosure laws in a move that some financial crime specialists say could lead to the exodus of  billions of dollars in assets from the territory as people seek to avoid increased scrutiny.

The Chinese territory’s government has been rattled by last year’s Panama Papers scandal, which showed that Hong Kong was the most active centre in the world for the creation of shell companies. They have many legitimate purposes but can also be used to hide assets and evade taxes.