Links between a local company and a Panamanian financier alleged to be involved in crime have fuelled fears that overseas criminals are favouring New Zealand registered companies to perpetrate fraud, launder money and evade taxes.

Green Party Co-leader Russel Norman last night said blog site Naked Capitalism had revealed New Zealand's company register contained "a large number of suspicious companies registered in New Zealand who share a common business address in a residential part Auckland".

"The companies have links to a Panamanian financier alleged to be involved in crime in other jurisdictions."

In response to recent written questions from Dr Norman, Commerce Minister Simon Power acknowledged New Zealand's reputation as a good place to do business had been harmed by overseas individuals using New Zealand registered companies "to commit or facilitate crime such as money laundering, tax evasion and fraud, in overseas jurisdictions".


Mr Power also said a lack of enforcement of current company law meant New Zealand authorities had been unable to help international agencies in trying to combat international fraud.

He said the misuse of company structures by "a small number" of overseas individuals and New Zealand-based agents "threatens our international reputation as a good place to do business".

But Mr Power also said it was not possible to say how widespread the misuse was because several company formation agents had formed a large number of companies for overseas clients using nominee shareholders and directors.

However, the Registrar of companies was looking into the issue and had already begun action to de-register about 1800 companies associated with a particular company formation agent.

Meanwhile, Cabinet had agreed last year to amend the Companies Act to address the threat but legislation was still being drafted.

Dr Norman on Tuesday night said the Government had been "slow to investigate and stop New Zealand-registered companies becoming a front for committing sophisticated international fraud".

"This should have been a higher priority for the National Government along with increased resources for policing current company law."