3 ms·

You're referring to financial shell companies used for tax evasion and are a very specific kind of shell company. Shell companies in general are pretty commonl

You're referring to financial shell companies used for tax evasion and are a very specific kind of shell company. Shell companies in general are pretty commonly used and pretty common in the US (I can't speak to other countries). It's very easy to setup a very basic corporation anywhere in the US and can take anywhere from a week to a month depending on the state. That corporation can get paid to run ads by another corporation. The new corporation will pay Google to run the ads and will still pay taxes, but their name will show up. The new corporation is providing a service as a middleman. There are some specific restrictions on doing this kind of thing for other purchases and acting on others behalf, but not for ad buys.

tialaramex 6y ago
The type of company you're thinking of would insist it's engaged in tax avoidance not evasion, and since the UK has a General Anti-Avoidance Rule it would furthermore claim that the tax efficiency is a result of some otherwise quite reasonable behaviour and isn't some scheme that makes no sense except for how it conveniently avoids taxation. But mostly, as you hint, it's hoping to stay under the radar so nobody asks awkward questions. However my point applies for shady outfits advertising on Google too. It may make sense for some companies to pay money to have a third party place their advertising, perhaps as part of some value-added service that offsets the extra cost, but under a know-your-customer regime that company doesn't want to annoy Google. If you earn $10M a year re-selling Google's adverts then the chance to earn $1M putting your name on an obvious scam is a bad deal - Google's going to cut you off and there goes the $10M pa revenue. So the first type of shell is likely to get implicated in scummy stuff that happens in future, and as I showed you'll find out it's a dead end because your government doesn't care about making businesses tell the truth about who they are. And that's not Google's fault, it's something your elected representatives might fix if they thought you knew and cared.

tialaramex 6y ago

The type of company you're thinking of would insist it's engaged in tax avoidance not evasion, and since the UK has a General Anti-Avoidance Rule it would furthermore claim that the tax efficiency is a result of some otherwise quite reasonable behaviour and isn't some scheme that makes no sense except for how it conveniently avoids taxation. But mostly, as you hint, it's hoping to stay under the radar so nobody asks awkward questions. However my point applies for shady outfits advertising on Google too. It may make sense for some companies to pay money to have a third party place their advertising, perhaps as part of some value-added service that offsets the extra cost, but under a know-your-customer regime that company doesn't want to annoy Google. If you earn $10M a year re-selling Google's adverts then the chance to earn $1M putting your name on an obvious scam is a bad deal - Google's going to cut you off and there goes the $10M pa revenue. So the first type of shell is likely to get implicated in scummy stuff that happens in future, and as I showed you'll find out it's a dead end because your government doesn't care about making businesses tell the truth about who they are. And that's not Google's fault, it's something your elected representatives might fix if they thought you knew and cared.