Monday, May 7, 2018

Offshore tax havens set to overtake Canada in corporate transparency

accountability transparency business crime corruption politics tax evasion money laundering

Bermuda, the Cayman Islands and the British Virgin Islands — notorious offshore tax havens where shell companies shield billions of dollars in illicit money — will soon have more open corporate records than Canada.

In a stunning move last week, Britain’s House of Commons passed legislation that will lift generations of corporate secrecy in its offshore territories by compelling company owners registered on the islands to reveal themselves in public databases.

That kind of transparency is only an idea in Canada, where corporate owners can mask their identity behind lawyers and “figurehead” directors. There is no requirement for real company owners — or “beneficial” owners — to list their names in provincial or federal registries.

“The U.K. is becoming the global leader for beneficial ownership transparency and holding tax havens to account,” said Richard Leblanc, a professor of corporate governance at York and Harvard universities.

“Canada is rapidly being left behind, in a race to the bottom, and now has an unenviable international reputation as the go-to country for lax beneficial ownership transparency laws.”

Despite a recent commitment from the provinces to start collecting beneficial ownership data (without making it public), it is still possible in Canada today to register a corporation, open a bank account and send and receive money overseas all without disclosing your name.  (more...)

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