Sanctions Evasion Reference

Shell company

A registered company with no significant operations, assets or employees, used to hold assets or to sit in a chain of ownership.

reviewed

2026-08-20

Shell companies are lawful and common. They are used for holding structures, joint ventures, securitisation and dormant name protection. What makes them relevant here is that an entity with no operations leaves almost no evidence about who really controls it, so a chain of them is an effective way to put distance between an asset and its owner.

The signals investigators use are consequently indirect: incorporation immediately before a transaction, registered addresses shared with hundreds of unrelated entities, filings that stay dormant while large sums move, and directors who appear on implausible numbers of unrelated boards.

Where this term is used

  • What is a front company? — A front company is a business that trades normally but exists largely to hide another party's involvement in its transactions. The real activity is the cover; the concealed party is the point.
  • What is a professional enabler? — A lawyer, accountant, formation agent or broker whose services are what makes a concealment structure work, and whose repeated involvement across unconnected clients is itself the evidence.
  • What is shell company layering? — Layering is the use of successive companies in different jurisdictions between an asset and its owner, so that no single register, filing or payment record shows the connection between them.

Related terms

  • Front company — A company that carries on some real business but exists substantially to conceal the involvement of another party in its transactions.
  • Layering — Inserting successive intermediate parties, transactions or jurisdictions between an asset and its owner so that the connection cannot be established from any single record.
  • Secrecy jurisdiction — A jurisdiction whose company, banking or trust law limits the information available about ownership and control to foreign authorities and counterparties.
  • Corporate services provider — A firm that incorporates and administers companies for clients, supplying registered offices, directors, shareholders and company secretarial services.

Sources

  1. Concealment of Beneficial Ownership. Financial Action Task Force and Egmont Group, 2018.
  2. OpenCorporates. OpenCorporates, 2026.

All glossary terms