Far more than 1,000 companies linked to Chinese nationals were registered in Northern Ireland three months after new legislation came into force designed to clamp down on abuses and possible fraud.
Individuals and potentially organised groups appear undeterred by the economic crime law as at least 1,300 highly suspect registrations were made either piggy backing on people’s homes and businesses or using entirely fictitious addresses since the start of March.
One leading fraud expert believes the thousands registered over the last year and a half in the north is part of widespread VAT fraud.
Those registering may also benefit by using a UK address when dealing with financial institutions globally.
“I think the company incorporations of Chinese in NI might have dropped a bit but is still ongoing and largely phony,” said Graham Barrow, the expert on economic crime and fraud.
“They are some obviously fake companies but the level of similarities between companies and the continued targeting of multiple homes in the same street is clearly suspicious,” Mr Barrow added.
As an example, six companies were registered at an address in Annadale Flats on Wednesday and Thursday last week. A different director is listed for each, with all claiming to be Northern Ireland residents.
Companies House was unable to respond to questions over whether an investigation has been launched into the phenomenon or if any details have emerged over exactly what is going on, citing election period restraints.
But the government agency did provide an update on work carried out since the Economic Crime and Corporate Transparency Act came into force in March.
More than 6,000 companies have now been registered over the last 18 months by Chinese nationals using addresses where the business owners or residents appear to have no connection to them. Some are also fictitious.
Letters have landed into houses and businesses from the HMRC, Companies House congratulating the new director and company, and even solicitations from UK-registered banks.
Companies House and HMRC previously have moved to reassure people there should be no tax or otherwise financial impact on individuals and businesses whose addresses are being used.
However, there have been complaints about difficulties removing an address from the register, which the new law will make easier, it is promised.
Previously, the onus was heavily on the home or business owner to prove an address is being falsely used, a process that took some months.
Companies House said : “When we identify an inappropriate registered office address, we’ll change it to a default address held at Companies House.
“The company must then provide an appropriate address, with evidence of a link to that address, within 28 days.”
In a previous statement to the Irish News, the Chinese Embassy in London said: “We have noticed relevant reports and express great indignation and firm opposition to malicious defamation inconsistent with the facts related to China.”
It added: “The Chinese government cracks down hard on all kinds of tax evasion and required overseas Chinese companies to strictly abide by local laws and regulations.”
In its update on work carried out, Companies House said it has “commenced the process to remove names and addresses used without consent”.
Up to the start of April, the agency had removed 4,000 registered office addresses and removed 2,100 officer addresses.
It has vowed to “target false or misleading information across several areas including where names and addresses have been used without consent”.
The law also aims to tackle so-called “ghost” companies campaigners claim can be used as vehicles for secretly moving money around the world.
In one example, one small rural home in the north was used to register more than 100 limited partnerships (LPs) traced back to a single address in the Seychelles, the Irish News previously revealed.
Under the new law, LPs must provide partners’ names, date of birth and usual residential address, verify the identity of general partners and provide a registered office within the UK.
