A shell company is a corporation without active business operations or significant assets. It is typically created to manage financial transactions without engaging in any substantial business activities.
Characteristics
No Physical Presence: Shell companies often have no physical office or employees.
Complex Ownership Structures: They may have complex ownership structures to obscure the identities of the true owners (beneficial owners).
Registered in Tax Havens: Many shell companies are registered in jurisdictions with favorable tax laws and minimal disclosure requirements, such as the Cayman Islands, Panama, or Delaware.
Legal and Regulatory Framework
To combat the misuse of shell companies, many countries have implemented stricter regulations, including:
Beneficial Ownership Disclosure: Requiring companies to disclose the identities of their beneficial owners.
Anti-Money Laundering (AML) Measures: Implementing robust AML measures to detect and prevent money laundering activities.
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