Panama Papers: Will NV Lawmakers End Corporate Secrecy Here?
A state senator and Nevada’s secretary of state say they want to look into law changes, where needed, to keep criminals from taking advantage of Nevada’s easy corporate laws.
Sen. Tick Segerblom, D-Las Vegas, and Barbara Cegavske, Nevada secretary of state, said the state has worked in the past to strengthen laws. But more might be needed.
“We are constantly looking at and trying to become aware of anything that happens in Nevada with these businesses," Cegavske told KNPR's State of Nevada, "It’s an on going thing because as you know anything that we do the criminal entity always figures out a way to circumvent anything that you’ve done.”
This stems from the release of the Panama Papers, more than 11 million documents released to European news outlets, have revealed financial information that billionaires and heads of state had hoped to keep secret.
One of the biggest secrets is how many of them benefited from shell and “shelf corporations.” Nevada allows the incorporation of shelf corporations, even though it has tried to control them in years passed.
Nevada and most states also allow businesses to incorporate here without a great deal of background about the people who are incorporating. Sometimes, people involved in criminal activity may set up a dummy corporation here to enjoy the state’s low business taxes.
“One of the problems is we have no corporate income tax so there is no record of what these corporations are doing,” Segerblom said.
Segerblom also explained corporations make a lot of money in the state. So, when lawmakers look at changing any laws that might impact them, their representatives come to Carson City ready to defend their interests.
According to the International Business Times, Nevada, Wyoming and Delaware “have emerged as fertile grounds where officials can set up shell companies for cheap.”
Segerblom doesn't disagree.
“There are hundreds of thousands of corporations in Nevada," he said, "We make a ton of tax money off of those corporations and the majority of them probably are just shell corporations where someone just uses that name to funnel money through because we have no corporate income tax in Nevada. They use this as the base for whatever business they’re doing whether it’s legitimate or illegitimate.”
But Cegavske said every legislative session lawmakers work to strengthen laws, and she believes they're doing a good job keeping up with illegal activities.
“I think the state of Nevada has done a yeoman’s job in getting as much as they can through the legislature to make sure that these things don’t happen”
Statista.com, an online statistical studies site, looked at states and countries that provide the best tax havens for businesses. Nevada ranked number eighth, behind seven countries. The British Virgin Islands was number one, and after Nevada, Hong Kong was ninth and United Kingdom was 10th.
Barbara Cegavske, NV Secretary of State; Tick Segerblom, senator, D-Las Vegas