Starting a Business: Transparency of information at business registries
Author: Doing Business
Publication: Doing Business 2018
Governments and civil society have come together in recent years to increase the transparency of business information. New regulations have been adopted to improve transparency, particularly regarding the dissemination of company data. These changes have been made in the wake of a series of revelations—such as the Panama papers and the Bahamas leaks—that showed the extent to which individuals take advantage of obscure company ownership structures to illicitly move money around the globe. One way to increase transparency in the business environment is to disclose beneficial ownership information publicly—that is, to reveal the identity of individuals who ultimately enjoy the benefits of property rights in equity, even if they are not legal owners. Disclosure of beneficial ownership is useful in identifying suspected money laundering and potential terrorist financing. Access to corporate information is vital for individuals and institutions looking to make sound investment decisions. It is crucial for investors to know who they are doing business with in the global economy. Providing public access to company information through business registries strengthens confidence in businesses and institutions, but it also helps to manage financial exposure and increase market stability, thereby reducing the risks associated with doing business.
This year, Doing Business has collected preliminary data on the information gathered and shared by business registries in 190 economies.
- Transparent information provided to the public by business registries can reduce transaction costs and facilitate investment decisions.
- The most common types of information shared by business registries include the company’s name, its legal address and the names of its directors.
- Information on beneficial ownership, corporate structure and annual financial returns is less commonly collected and made available to the public.
- Technological advances have greatly enhanced access to information.
- There is a strong association between a transparent business registry and higher efficiency, as well as a lower incidence of bribery.