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OpenCorporates
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The largest open database of companies in the world
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Wyoming overtakes Delaware for per-capita company incorporations, OpenCorporates data shows
Dec 4, 2024Tap to summarizeUS INCORPORATION TRENDS: Part 1 Article by Ana Muñoz Padrós & the OpenCorporates Insight Team A massive growth in incorporations of LLCs in Wyoming over the past five years has caused it to overtake the historic leader in incorporations, Delaware, according to a new detailed analysis of US company incorporations by OpenCorporates. Delaware is well known as the default jurisdiction in the US. If you’re incorporating a new tech startup, and looking for VC money, you’ll probably incorporate in Delaware. Most international corporations have their primary US legal entity in the US. Most listed companies are incorporated in Delaware. And it is the domicile of over 67% of Fortune 500 companies, according to Delaware’s Division of Corporations. There are many reasons for this – historical, legal, financial, opacity (see Hal Weizman’s What’s the Matter with Delaware? for a detailed walkthrough of the history). What’s important to understand is this didn’t happen instantly, but over a period of a century or so. So when we decided to look at legal entity incorporations per capita by state it wasn’t a surprise that the number of incorporations in Delaware was considerably higher than the other states. What was a surprise was the number of incorporations per capita in Wyoming. An analysis of incorporations over the past 10 years from OpenCorporates comprehensive database of US legal entities have shown that the growth has been steep, and relatively sudden. 10 years ago, while Wyoming per-capita incorporations were greater than most other states, they were still within the same range. Since then, and particularly since 2016, they have exploded, tripling in the past five years. And last year, Wyoming grew 42%, surpassing Delaware for the first time with 378 new companies per 1,000 adults, compared with the average of new companies in the rest of the US of 36 per 1000 adults (all states plus DC, excluding Delaware and Wyoming). Registrations of new companies per 1000 adults by US state (inc DC). Each line represents a state, with the grey ones at the bottom showing all jurisdictions (50 states + DC), excluding Wyoming and Delaware. Population: U.S. 2020 Census decennial data Last year, the Cowboy State recorded a historical 42% increase in incorporations, up to 378 per 1,000 adults. Download the data. There are a couple of key points worth making here. First, why per capita incorporations? Well, you would expect a state like California, with vast numbers of people, to have more companies set up each year than a smaller one (population-wise) like Rhode Island. Doing it per capita (or per 1000 adults) allows us to make useful comparisons between the states. Perhaps you would expect the type of state (rural, metropolitan, dense, sparsely populated) to also have a difference. In fact, not really, or at least not compared with the outliers of Delaware and Wyoming. We have used the 2020 Census decennial data as our source for population information, given its accuracy and comprehensiveness. Second, the vast majority of these incorporations in Wyoming are LLCs (Limited Liability Companies), which for non-Americans, is quite different from what many countries would consider a company with limited liability (a distinct legal entity with equity and shareholders). In fact, they are more akin to a Limited Liability Partnership, with individual members, rather than shareholders. Third, the huge rise in Wyoming incorporations doesn’t appear to have come at the expense of any individual jurisdiction. Yes, the growth of Delaware appears to have stalled, but only recently and not nearly enough to account for the growth (in 2023, for example, Delaware incorporations dropped by about 10,000, but Wyoming increased by over 45,000). So the question is, what is driving this – is it that Wyoming is taking incorporations from each of the US states equally, or perhaps has it found a whole new market for US incorporations. Next post we’ll look at the rise of the LLC, a legal form that was actually invented in Wyoming. For more information With data straight from the source, at OpenCorporates you can always trust what you see. For more information on our comprehensive and trusted US legal entity data: Contact us
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Step-by-step guide for using OpenCorporates data in entity verification
Nov 28, 2024Tap to summarizeEntity verification is an essential part of RegTech solutions, especially for Know Your Business (KYB) and due diligence processes. This guide outlines a step-by-step approach for using OpenCorporates data to overcome common entity verification challenges. It’s for anyone who’s ever wondered “what problems with entity verification does OpenCorporates solve, and how does it solve them?” Step 1: Know your entity verification challenges Before integrating OpenCorporates data, it is important to understand the core entity verification challenges you’re facing, such as: Authenticating legal entities: Verifying that a company or individual is legitimate is crucial in preventing financial crime. Accessing reliable data: Accessing trusted corporate data from numerous jurisdictions can be cumbersome and unreliable when data sources are inconsistent. Reducing manual effort: Entity verification often involves repetitive, manual processes that can delay onboarding. To solve these challenges, you need legal entity data, not vague “business data”. If the data doesn’t clearly map to a specific legal entity incorporated in a jurisdiction, then you will end up with very significant data quality issues. OpenCorporates provides a centralised, reliable, and automated solution for accessing legal entity data globally. Step 2: Gain access to the OpenCorporates API To start using OpenCorporates data, follow these steps to gain access to the API: Sign up for API access: Visit OpenCorporates API Access Page and sign up for API access. You may need to choose a suitable plan based on your data requirements and usage. Review API documentation: Familiarise yourself with the API Documentation to understand the available endpoints and parameters. Step 3: Integrate OpenCorporates data OpenCorporates offers an API that can be integrated directly into your RegTech solution. Benefits of setting up this integration include: Real-time access to our database: Use OpenCorporates’ API to access our company records in real-time. This ensures that you always have the latest information we have available. Global coverage: Integrate the API to access data from over 140 jurisdictions. This helps verify legal entities no matter where they are incorporated, making it easy to navigate complex international requirements. Official legal-entity data: OpenCorporates provides data as found at the registry source, with standardised Company Name, Incorporation Country, Incorporation Date. We also make it traceable directly back to the source, reducing risk, complexity, and barriers to automation at scale. Testable API requests: Use tools like Postman to test API requests and verify that you are receiving the correct data. The API documentation provides example requests and responses that can help in testing. Error handling: Implement error handling for common issues such as rate limits, invalid API keys, or unavailable data. This will ensure your integration is robust and reliable. More information regarding error handling can be found here. Step 4: Automate your data collection One of the major benefits of OpenCorporates is the ability to automate the time-consuming data collection steps in KYB. Instead of manually accessing multiple registries, use the API to pull reliable corporate information instantly. OpenCorporates collects data exclusively from official company registries, ensuring that only verified information is used in entity verification. This means you can use OpenCorporates data to replace manual registry searches, reducing the time and effort needed to onboard customers. Use API endpoints: The API offers multiple endpoints, including search and fetching detailed company information. Use these endpoints to efficiently collect the data needed for entity verification. A full list of these endpoints and examples of how to use them can be found here. Remember, authentication is through an API token in the query parameters. This token is available from your OpenCorporates account page. For example: *Please keep your API key safe. Step 5: Ensure data provenance Transparency is a key element in ensuring compliance. OpenCorporates data includes provenance for each entity in the dataset—providing a clear audit trail of when and where the information was collected. Data provenance: Every entity includes its source, which allows you to provide audit-ready verification trails. This helps compliance teams justify decisions based on official records. The provenance object consists of the following: Reliable decision-making: You can confidently rely on the provided data, knowing that it is collected from trusted sources. This transparency can also improve relationships with clients, who require assurance of regulatory compliance. Step 6: Use multi-jurisdictional data for risk identification One of the most significant challenges in entity verification is dealing with inconsistencies in how companies are registered and referred to across different jurisdictions. OpenCorporates addresses this by providing unified, global data. Unique entity identification: Use OpenCorporates data to uniquely identify companies across multiple data sources. This helps in reducing errors related to inconsistent naming conventions or registration details. Our database also contains Additional Identifiers for companies, including LEIs, TINs, and EINs, all essential for entity resolution. Cross-referencing for risk management: Once an entity is identified, cross-reference OpenCorporates data with other risk databases, such as Open Sanctions. This enables a more effective risk management process by providing a consistent foundation. Step 7: Scale as needed As your verification needs grow, OpenCorporates’ flexible API allows you to easily scale up the amount of data accessed. Adaptable data use: Increase the usage of company data based on demand. This helps RegTech companies support large-scale KYC operations without worrying about data availability or costs. Continuous monitoring: Use the data to continuously monitor companies for any changes, allowing for ongoing verification and improved risk management. Summary of best practices Automate as much as possible: Use the OpenCorporates API to automate entity verification workflows, reducing manual labour and increasing efficiency. Leverage data provenance: Always use the data provenance feature to ensure transparency and compliance during audits or regulatory checks. Cross-reference for enhanced risk assessment: Combine OpenCorporates data with other data sources to build a complete view of a company’s risk profile. Standardise verification processes: Take advantage of the globally standardised data to create repeatable, scalable processes across jurisdictions. Monitor rate limits: Keep track of API rate limits to ensure your integration continues to run smoothly and avoid disruptions in data access. By integrating OpenCorporates data, you can overcome significant entity verification challenges, such as verifying the legitimacy of companies, accessing multi-jurisdictional data, and reducing manual effort. The data’s transparency, high q...
Transcribe →OpenCorporates revives French company data
Nov 15, 2024Tap to summarizeWe’re excited to announce the revival of our French company data, including coverage of French territories! This marks a crucial step forward, considering the significance of French legal entities within the EU and the jurisdiction’s substantial size. Our database currently holds records for over 11 million companies, but these were last updated in June 2023. In the coming months, we’ll be working to keep up with new incorporations and fill in the gaps as we go, adding any missing records and updating stale data. We expect to fill in the gaps by the end of December 2024 and ensure there are no stale records by the end of Q1 2025. The challenge This project has been a rewarding one, showcasing advancements in EU open data initiatives in France, particularly concerning legal entities (there are many exciting datasets in data.gouv.fr/ that promote transparency in the public sector). Previously, we relied on an outdated method that provided a single bulk file each month. While useful it posed several challenges: Updates were infrequent, limited to monthly releases. The file now contains over 27 million records, significantly increasing complexity when identifying changes or new incorporations, as this requires sifting through the entire dataset—a highly resource-intensive task. Records associated with sole traders were excluded due to legal constraints in this case, though other limitations also add to the time and complexity of managing and processing the data effectively. The solution Today, thanks to the efforts of French institutions like Institut National de la Statistique et des Études Économiques (INSEE) and Institut National de la Propriété Industrielle (INPI), we can access open data through APIs that update on a daily basis. These APIs allow us to work with much smaller, more manageable data loads, focusing specifically on what’s new or what has changed. This daily access enables us to maintain more accurate, up-to-date records, ensuring the data we provide is timely and relevant for everyone who relies on it. Daily updates helped manage the workload but we still faced several challenges: The API provides a huge amount of structured data. We’ve streamlined this to align with our other datasets, ensuring compliance with data reuse licensing requirements and legal constraints. Although the API is comprehensive, we’ve enriched and combined certain fields, at times with additional sources (such as industry codes), to provide more value than just raw codes would. While we can limit searches to recently created or updated records, we’ve encountered instances where large-scale updates necessitated handling substantial data volumes efficiently. As a result, we have adapted our solution to manage these scenarios effectively. As these platforms continue to evolve, we’ll adapt accordingly. Our processes are designed to handle frequent updates and improvements, ensuring our dataset remains aligned with any ongoing modifications. We’re now fully equipped to handle even the most extensive updates in France’s vast data landscape. What’s next? As we continue this work, our goal is to ensure that our French company data remains comprehensive and current. The data fields we previously maintained will stay intact, but this update will allow us to offer much more—particularly a more complete set of officerships through the Data INPI service. By having hold of the Système Informatique pour le Répertoire des Entreprises et des Établissements (SIRENE database), we’ll have the foundation to further enrich our dataset through other sources, with promising potential to expand our information on establishments, trademarks, and any other public announcements. As with any information technology solution these sources are undergoing continuous modernisation, and we’re committed to staying aligned with their progress, seamlessly adapting our services to incorporate any updates or enhancements on your behalf. We anticipate enhancements to the Sirene API, as well as a new revision of NAF codes in 2026 , which will bring even greater utility to the data. For instance it is a bit outdated that currently the French NAF codes are based on business models from 2008 (with a few touch-ups in the 2015 revision). Take Netflix, for instance—not quite a television broadcast right? We’re excited about what’s to come and look forward to providing ever more accurate, detailed, and timely data for all who depend on it—whether for regulatory, commercial, or analytical purposes. For more information Contact us
Transcribe →UK Companies House Strategic Intelligence Assessment: A wake-up call for company registers everywhere
Oct 25, 2024Tap to summarizeBy Chris Taggart, OpenCorporates Founder Note: in this piece we are deliberately referring to legal entities rather than companies. Even though it’s called Companies House, it actually creates and regulates legal entities. Some of them are connected with real business activity (what a regular person would call a company) but many, as the report makes clear, are merely shells used for criminal schemes. This confusion of legal entities – legal constructs that exist only in the legal world, not the real one – with legitimate businesses is reason why companies find it so easy to use them to carry out their activities. Yesterday, Companies House published their first strategic intelligence assessment. If I’m completely honest, I was rather blown away by it. First, by the frankness of it. Louise Smyth, chief exec of Companies House, and her team, deserves huge praise for the candour and clarity of the report. It’s not pretty reading, but dealing with a problem first means recognizing it, and this is what the folks at Companies House have done. “It is highly likely that limited company structures within the UK are widely used to facilitate many types of serious and organised criminality.” – Companies House strategic intelligence assessment Second, by the scale of the problem that it exposes. We are talking a minimum of tens of thousands of legal entities being incorporated for illicit purposes, and likely an order of magnitude greater than that. Third, by the limits of Companies House to do something to tackle it. Make no mistake there’s an asymmetry here, where Companies House (and other company registers) are playing catchup with enemies who are better resourced than they are, who don’t need to follow the rules (Companies House does), and who only need to find a few loopholes (Companies House need to close all of them). And every pound the criminals earn can go into finding more loopholes to exploit. So, if you are a company registrar, or a politician or senior law enforcement official, and don’t read this, then you are either living in cloud-cuckoo land, or deliberately living in ignorance. Either way, you are not doing your job, because it’s highly likely that similar activity is happening in your jurisdiction, particularly those ‘developed’ countries that say they consider the rule of law to be important. With all that said (and I urge you to read the report in full), here are a few observations. Five years ago or so, OpenCorporates wrote an article called Fireflies and Algorithms, that warned of a future where company formation was done programmatically, and at scale. That future is clearly now here, based on some of the cases in the report (e.g. “Eleven thousand limited companies were incorporated and VAT-registered to a residential flat”). As we wrote a couple of days ago, the current penalties issued by company registers are meaningless in such cases – at best treated by criminals as a cost of doing business, and more likely unenforceable, given the perpetrators are either unidentifiable, or in jurisdictions out of the reach of the authorities in the country affected. Most of the cases identified are successful criminal schemes, as the sanction was closing the company, not recovery of the money nor imprisonment of the criminals (“Two companies … secured £230,000 worth of funding put in place to support businesses during the pandemic, despite having never traded… Following an investigation by The Insolvency Service, the companies were liquidated”). Until this is addressed, the message to criminals will be that this is an activity without consequences. Criminals are rational actors, and should be treated as such. If someone is incorporating thousands of legal entities, it’s not for the LOLs. If you haven’t found the fraud, it’s because it’s too sophisticated, or involving different jurisdictions or domains. Many of the schemes will be cross-border, but there is no real recognition of this. If the legal entities are created and controlled by legal entities in other jurisdictions, there seems little likelihood of Companies House identifying this, and the UK is in fact an enabler of many such schemes through the opacity of the Overseas Territories such as Cayman Islands and British Virgin Islands. It’s time to open up these company registers, and have their data published under the same open data regime as Companies House. The consequences for societies are real, and serious. There’s real money at stake here, and real lives destroyed, and often it’s the governments being defrauded, either from tax fraud schemes or grants and loans, both of which are cited in the report. And lest you think this is a UK problem, in April, the GAO estimated that between $230 billion and $530 billion *a year* was paid out by the Federal Government in fraud and wrongful payments. Much of this would have used legal entities as the vehicles for the fraud. The ‘enablers’ who facilitate this activity need to be a focus for the authorities, with jail time for those who profit from it. A week or so ago, Companies House laid out a timeline for implementing the Economic Crime & Corporate Transparency Act. They need to see if that can be accelerated in light of this report. We now live in a generative AI world. This needs to inform Companies House in its work and processes. It will make identity verification harder, and programmatic formation easier. For more information Contact us
Transcribe →Company registers: Why penalties do and don’t matter
Oct 23, 2024Tap to summarizeBy Chris Taggart, OpenCorporates Founder Last week, the Business Registry Insights group published a fascinating report on penalties issued by legal entity registers around the world. This is, admittedly, a bit wonkish, but at OpenCorporates we are proud to be wonkish about legal entity register data (in fact, a working definition of wonkish could be – unsexy details that matter relating to an unsexy but important subject). Having said that, here are a few initial thoughts (comments welcome too). Credit where credit’s due First, credit should go to the Business Registry Insights group (a group of registers and register associations) and the registers that responded. Legal entity data is fundamental to the commercial world, as well as the fight against organised crime, fraud, money laundering and corruption, and surfacing information about the system that underpins it is vital to understanding and improving it. The implications of silence Second, the thing that struck me when looking at the survey was which registers and jurisdictions responded… and which did not. Response is always a challenge when doing such a survey, and the fact that over 90 registers responded is a testament to the team behind this. However, it is noticeable that only 22 of the 52 US core jurisdictions responded (50 US states plus DC and Puerto Rico), and notable absences there include important registers such as Delaware, Wyoming and New York. Absent too are many of the traditional offshore jurisdictions – Caymans, BVI, Bermuda, Bahamas, Seychelles. Of course there may be many reasons for this – the US registers tend to be under-resourced and overworked, even when they generate tens of millions (or even billions in the case of Delaware). And the list of the top 50 jurisdictions on the Basel AML index (of which only Myanmar, Kenya and Panama responded), do have a significant number of very poor nations. But even so, might one be forgiven for thinking that some of these jurisdictions don’t want comparisons with their peers? Does this extend too to the European registers that didn’t respond (Belgium, Austria, Hungary, among others), or the Canadian provincial registers, hardly any of which responded? Registers are (often) all bark and no bite Third, it’s perhaps shocking that so many registers have no powers at all to sanction incorrect filings, even when it’s fraudulent. These are the US and Canadian jurisdictions that responded, for example: The limitations of sanctions Fourth, this survey prompts another, more important question in a world where all commerce (and all large scale criminal activity too) is underpinned by legal entities. What is an appropriate and effective sanction, when companies are created for illicit or criminal purposes? Even a fine of $10,000 is nothing if you are laundering millions of dollars, or committing fraud. And even if the fine is issued, if the entity is a shell with the backers in another country, what’s your ability to enforce it? The answer must surely be to make it harder for companies to be set up for criminal purposes, and harder to submit bad data in the first place (starting with verification of the identity of directors, as done by the Irish CRO, for example, and in the near future by UK Companies House). Otherwise it’s surely a case of bolting the stable door after the horse has bolted. For more information Contact us
Transcribe →Shell corporations: Paper companies with real consequences
Oct 10, 2024Tap to summarizeOn the note published by the EU Tax Observatory You know that game where a ball is placed under one of three cups and they get shuffled around until you lose track of where the ball is? Well, imagine that ball is actually billions of dollars, and instead of cups, it’s companies. Companies that don’t actually do anything. Companies that only exist on paper. Welcome to the world of shell corporations. The EU Tax Observatory released a note that revealed some pretty clear shuffling. They used OpenCorporates’ data to help untangle a web of paper companies with real consequences on global economics, governance, and fairness. Let’s dive into what they uncovered, and why it matters. What is a shell corporation? Before we get to the details of the report, let’s clarify what a shell company is. The EU Tax Observatory defines it as an entity that exists mainly on paper, with no physical assets, employees, or real economic activity. It’s a business that’s more of a decorative piece than an actual operation. Sounds harmless, right? In reality, these empty shells are used by multinationals, wealthy individuals, and criminal enterprises to avoid taxes, obscure ownership, and sometimes engage in illegal financial activities. Whether it’s hiding assets in the British Virgin Islands or moving money through Delaware, shell corporations thrive in jurisdictions with loose regulations. Where are they all hiding? The EU Tax Observatory’s report shines a light on where these shell companies can be found – and it’s not where you’d expect. Sure, we all know places like the Cayman Islands and Panama are notorious tax havens, but did you know that tiny jurisdictions like the British Virgin Islands (BVI) have more than 12,000 companies per 1,000 people? That’s twelve times the population. In Europe, lesser-known spots like Estonia and Luxembourg are magnets for these entities. And in the US, states like Delaware and Wyoming have become mini tax havens, with shell companies sprouting like daisies in spring. Delaware is particularly interesting, housing nearly 3 entities per resident adult. These companies aren’t just filing taxes in Delaware; they’re using the state’s friendly legal system to get a free pass on all sorts of financial activities. How OpenCorporates’ data was used The EU Tax Observatory used our extensive data to track down these companies. With more than 200 jurisdictions in our database (including some of those tax havens), they were able to construct an indicator showing which regions have the highest concentration of these elusive entities. Our open-access, detailed corporate data allowed researchers to spot patterns and anomalies that all but spell out “shell company”. By analysing company registrations and comparing them to the local population, the Observatory could flag regions with suspiciously high numbers of limited liability entities. The findings were shocking, to say the least. A simple comparison of company registrations per capita revealed that places like the BVI, Delaware, and Luxembourg are veritable havens for these kinds of businesses. This data-driven approach brought a level of clarity that previous leaks (we see you, Panama Papers) couldn’t fully capture. Why should you care? You might be thinking, “Who cares if some billionaire parks his yacht money in a shell company?” Well, you should care, because shell companies are used to dodge billions in taxes every year. And when these high-flyers don’t pay their fair share, guess who gets stuck with the bill? Yup, us – the regular folks just trying to make an honest living. According to the report, shell companies are instrumental in shifting profits away from higher-tax jurisdictions. Multinationals use them to funnel profits through these low-tax entities, all while paying little to nothing in taxes. Criminals, too, love shell companies – they use them for everything from money laundering to hiding the spoils of corruption. In short, shell companies are one of the major villains of the financial world – And they are made all the more dangerous because they work in the shadows, staying silent, out of sight, yet highly effective at what they do. What’s being done about this (if anything)? There is some good news: reports like this one are pushing governments to crack down on these practices. The EU is working on stronger regulations, and the US has introduced the Corporate Transparency Act, which aims to lift the veil on beneficial ownership, making it easier to know who actually owns these shell companies. But the fight isn’t over. The report highlights the need for even more transparency, especially in tax haven jurisdictions. It calls for global cooperation, tighter regulations, and more detailed data (that’s where we come in) to ensure that shell companies can no longer hide in plain sight. Wrapping up So, the next time you hear about shell companies, remember: it’s not just a simple cup shuffling game. It’s a serious issue that impacts global economics, governance, and fairness. And thanks to the EU Tax Observatory, with an assist from the data provided by OpenCorporates, we’re one step closer to bringing these shell companies out into the open.your state, you’ll know there’s a lot more going on than meets the eye. For more information Contact us
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