The number of letterbox companies in the Netherlands continues to grow, despite both mounting criticism and tougher rules aimed at combating tax evasion, the Volkskrant says on Tuesday.
The number of letterbox firms – so called because they only exist on paper – rose 17% to 14,425 over the past two years, the paper says.
The paper bases its claim on the letterbox firms operated by the 20 biggest trust offices in the Netherlands. Trust offices deal with the paperwork on behalf of international conglomerates to establish and administer letterbox companies.
The biggest trust office in the Netherlands is Intertrust BV, which represents 3,500 companies and will be launched on the Amsterdam stock exchange on Thursday.
In its prospectus, Intertrust states the trust office income turnover has risen by 5% a year and that it expects this will continue into the future.
Earlier this month, the government admitted plans by the Organisation for Economic Cooperation and Development to make it harder for international companies to avoid paying tax will lead to the closure of part of the Netherlands’ letterbox company industry.
A report by economic institute SEO in 2013 said that €278bn flows through shell companies based in the Netherlands every year. This stems from the tax break on participations, relatively low tax on interest and royalties and the wide tax treaty network with other countries.
However, they only create an average of one job per company.