The incorporation business: They sell sea shells | The Economist
Up to 2million [shell companies] are set up in America each year [...]. Britain creates some 300,000; around 250,000 are set up in offshore locations [...]. The British Virgin Islands (BVI) alone registered 59,000 new firms in 2010. It had 457,000 active companies as of last September—more than 16 companies for every one of its 28,000 people.
Many such firms may be real, with their own offices and employees somewhere in the world. But many are paper firms, often with nominee directors and free of any obligation to publish their accounts. That helps stop outsiders from working out what they do or own, where they operate, who controls them and whom they really belong to.
[...] A World Bank report last year, “The Puppet Masters”, investigated 817 big cases of corruption between 1980 and 2010. Almost all used shells. “It’s a basic launderer’s tool,” says Robert Palmer of Global Witness, a campaigning group.
One reason for their ubiquity is an American-led push against money laundering.
Tracing the real owners of private firms is harder in America than almost anywhere else. Some formation agents there do not ask for identity documents, let alone verify them