What Is a Shell Corporation?

A shell corporation is a type of business that is set up to handle the transactions of another business. The shell corporation handles the business transactions, but it does not actually have any significant assets under its control. Companies will often set up a shell corporation in another country and funnel assets through it to make business transactions.

This type of business arrangement is often used in order to take advantage of tax benefits. Companies will set up a shell corporation in a country that is considered to be a tax haven. They can then run their international business through this shell corporation and they will not have to report the profits to their domestic government. By doing this, it looks like they are not making any significant money in their domestic market and the shell corporation is making all of the money. Since the shell corporation is set up in the tax haven, they will pay very low taxes, if any at all. 

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