U.S. one of the easiest places to set up anonymous shell companies
The recent leak of confidential documents from Panamanian law firm Mossack Fonseca is drawing significant media attention worldwide.
U.S. One of the Easiest Places to Set Up Shell Company
The United States is one of the easiest places to set up a so-called anonymous shell company. According to James Henry of the Tax Justice Network, Offshore isn’t so much a destination anymore as “a set of capabilities,” which include ensuring secrecy, minimizing taxes, managing assets, and providing clients security and access to their wealth from anywhere in the world. Contrary to popular belief, it is much easier to set up shell companies in states such as Nevada, Delaware and Montana than it is in traditionally thought of tax haven locations like the Cayman Islands or the Bahamas.
What is a Shell Company?
Shell companies are normally defined as a company that serves as a vehicle for business transactions without itself having any significant operations. In many American states, people registering shell companies do not need to show a form of identification, like a driver’s license or passport, and corporate service providers aren’t required to verify the identity of the person who owns the company, called “the beneficial owner,” or know what the company is for.
The beneficial owner may be asked to give their name, address and phone number, but for an additional fee, the corporate service provider can provide a “nominee” to take their place as the public face of the company — a person who controls the company in name but not in reality, disguising the beneficial owner’s identity.
“In some places [in the U.S.], it’s easier to incorporate a company than it is to get a library card,” Joseph Spanjers of Global Financial Integrity, a research and advocacy organization that wants to curtail illicit financial flows, said in an interview earlier this year.
Why is the U.S. Becoming a Tax Haven?
Ironically, the U.S. is becoming a tax haven in part because of our own FATCA laws. While other traditional offshore tax havens like Switzerland and the British Virgin Islands are now forced to disclose the real owners of anonymous companies, the United States is not required to do so. As a result, the U.S. now appears to be among the most lenient and secure destinations for the fortunes of the wealthiest people around the world.