There was a 237% increase in the number of limited partnerships registered in Scotland between 2011/12 and 2015/16, compared with a 42% increase in the rest of GB, leading to allegations that the Scottish limited partnership model – which uniquely has its own ‘legal personality‘ – is being used for criminal purposes.

A limited partnership is a particular type of business made up of partners, which can be either business entities or people. Scottish limited partnerships have their own legal personality, which means they can hold assets, borrow money from banks and enter into contracts while their true ownership remains secret.

It is this attribute that has led to allegations that some of them are being used for money laundering, tax evasion etc. In eastern Europe in particular, they are apparently being marketed as zero-tax businesses in Scotland, that is not stigmatised as a tax haven.

‘Review of limited partnership law: call for evidence’ has been issued by the Dept for Business to help better understand the economic benefits of limited partnerships, the reasons for their popularity, their value to the UK economy and possible changes to the format.