‘Shell company’ trading worth £25m a year

SLPs exploit a loophole in century-old Scottish company law which critics claim are increasingly being used by international gun-runners, money-launderers and tax dodgers.

According to The Herald newspaper, of the 25,000 SLPs currently registered in Scotland, some 17,000 currently have obviously opaque ownership, usually through another layer of shell companies registered in traditional tax havens in the Caribbean.

And adverts in nations that once made up the former USSR offer off-the-peg SLP companies with start-up or maintenance fees of around £1,500.

While there is no suggestion that firms which create, market or host SLPs are aware of any criminal activity by the SLPs they provide, at such a rate the revenue generated by the trade would amount to some £25 million a year, according to the new analysis.

The revelation comes after Oxfam this week began a lobbying drive to get MPs to close the legal loophole that effectively allows SLPs to be exploited as mini tax havens.

The charity now joins critics, including SNP, Labour, Green and Lib Dem politicians who have warned that SLPs are tarnishing Scotland’s international reputation as a place to do legitimate business.