Nevada has the second-largest number of corporate entities registered per capita, after Delaware. Its business-filings unit generated revenue of $108 million in fiscal 2010, up from $43 million in 2002.
A recent spate of accounting scandals involving US-listed Chinese companies prompted the US to call for more transparency from Chinese auditing firms. However, it is by using the kind of shell companies prevalent in Nevada that firms from China and other countries are able to list in the US without submitting to the scrutiny of the local IPO process.
The number of companies in the state with questionable financial reporting processes is high, according to a University of Virginia Study.
On average, in each year between 2000 and 2008, 14.5 percent of public Nevada companies restated their accounting; 12.6 percent lowered reported net income; and 1.3 percent were the subject of fraud allegations or investigations by regulators, the study found. Nationally, 8.5 percent of companies restated their accounts, 7.3 percent reduced their reported net income and 0.9 percent were subject to fraud allegations or probes.
The US Money Laundering Threat Assessment released in 2006 named Nevada, Wyoming and Delaware as he most accommodating jurisdictions in the United States for the creation of shell companies, rivaling the Cayman Islands and Panama.
Nevada has also upped efforts to increase its ties with China, with the latter the state's third-largest foreign trade partner. From 2000 to 2010, Nevada's exports to China grew 4,797 percent and the Nevada Commission on Economics has appointed three independent state representatives to China. A fourth has been designated to handle just tourism, with tourism offices in both Beijing and Shanghai. The state is also encouraging Chinese firms to set up headquarters there.
Officials have also been courting Chinese renewable energy manufacturers as it seeks to build a renewables hub in the state. Earlier this year, Nevada-based Applied Soil Water Technologies and Shengong Environmental Protection Company of Shanghai signed a partnership agreement to market $85 million waste-to-energy recovery and recycling facilities.
ENN Group, a privately-held Chinese energy company, is planning a $6 billion investment into the state to build a 9,000 acre co-city including a solar-cell manufacturing plant, a green energies industrial park, a solar energy farm and residential housing for employees in what would be the state's biggest ever investment from overseas.
