The US is the most important and vibrant business market in the world. Yet fundamental information about the millions of companies powering its economy is very hard to access as data – making it difficult to understand: what companies exist, who are they connected to and what do they do?
Our new report ‘US Company Data: State of the Nation 2020’ ranks how accessible company data is across the US, the underlying factors driving this and the negative impact poor access has on business and anti-corruption efforts.
- Access to US company data remains poor
Whilst the picture is varied across each state jurisdiction, the average score for the US (31 out of 100) remains poor — especially compared with the average across the whole of Europe (41.5) and scores for the UK (90) and Russia (40). US scores haven’t increased significantly over the past 3 years. Unless states take action, this gap will soon be much bigger, as the EU has already committed to publish company register data, including company ownership data, as open data from 2020.
- Highest performers: Washington, Iowa, Colorado & Texas
Washington state scored the highest (80) for access to official company register data, followed by Iowa (75), Colorado (70) and Texas (70). It achieved this by scoring top marks in 4 out of the 6 scoring factors, illustrating how some states can and are opening their company data for the benefit of business and wider society.
- Lowest performers: Minnesota, Delaware, Illinois & Maryland
Unsurprisingly, the secrecy jurisdiction Delaware scored near the bottom with 15 points. But less well-known culprits include Minnesota (10), along with Maryland, Illinois, Michigan, North Dakota and South Carolina (all with 20). Illinois for example does not publish any open data on companies and appears to actively resist people using the data.
- Lack of open company information is holding US business back
States that make their company data available, particularly as open data, help create a trusted business environment where you can be more confident of if the third parties you are dealing with exist, who they are connected to and what their purpose is. As many states do not make their company data open this puts US business at a disadvantage against their cross-state and international competitors. Where company information remains closed, the business environment is more opaque, creating a barrier to trade, and significantly increasing costs and work for small and medium sized businesses.
- Illicit use of companies will continue until company data is made more accessible
Whilst investigators, journalists and civil society remain locked out of accessing company information from some states, criminals will continue to utilise companies for fraud, money laundering and other illicit purposes. The same level of obfuscation can be achieved in the US today as in tax havens like Panama, which is one reason why so few US entities appear in the Panama Papers.
We focus on the availability of company information particularly as open data. Open company data is free, machine readable, has an open license that does not restrict usage and can therefore be used in a variety of ways (including due diligence, innovation and corporate transparency efforts).
The research for this report was all conducted in November and December 2019, following on from earlier research for the Open Company Data Index. The methodology and scoring is the same as for the Open Company Data Index.
OpenCorporates would like to thank the Mohn Westlake Foundation for supporting the development of this report.