Through an opaque network of shell companies in the British Virgin Islands and Luxembourg holding firms, an agency that manages China’s foreign reserves has discreetly scooped up stakes in Europe’s critical infrastructure, utilities, and real estate.
From a gas company in Spain to a police headquarters in Belgium, an agency directed by China’s central bank has been quietly acquiring stakes in companies and properties across Europe over the past decade.
By trawling through data from European business and land ownership registries, reporters were able to uncover a complex web of offshore Caribbean companies and Luxembourg holding firms through which this state agency holds its assets — and effectively keeps its ownership out of the public view.
While investors of any origin routinely use offshore vehicles and elaborate corporate structures for tax efficiency, the findings give a rare insight into how the authority that manages China’s foreign exchange reserves, the State Administration of Foreign Exchange (SAFE), makes investments in Europe.
SAFE is known for shrouding its investments and decision-making processes in secrecy, according to experts who focus on China’s foreign investments and trade.
“SAFE recently has gone to significant lengths to mask the size of its investments, so it clearly is keen to stay out of the limelight,” said Brad Setser, a fellow at the Council of Foreign Relations focused on China and ex-deputy assistant secretary of the U.S. Treasury.
About the OpenLux Project
This reporting is part of OpenLux — a cross-border investigation coordinated by OCCRP and Le Monde using data from the Luxembourg corporate registry.
Journalists from OCCRP’s partners De Tijd (Belgium), Le Monde (France), infoLibre (Spain), FRONTSTORY.PL (Poland), VSquare (Central Europe), and Follow the Money (Netherlands) cross-referred the Luxembourg data with other European business and land ownership registries to trace the assets.
OCCRP and partners have now identified 28 Luxembourg-registered companies linked to SAFE that have over the past 14 years acquired equity stakes in an eclectic range of European assets including a fiber-optic cable company in France, wind farms in the U.K., and the building housing a luxury hotel in the Netherlands.
Most of the Luxembourg holding firms have never been publicly linked to SAFE until now.
Made with Flourish
The trail began in Belgium with a lead uncovered by OCCRP’s Belgian partner De Tijd, which revealed how three Luxembourg-registered holding companies that could ultimately be traced back to SAFE had acquired assets in Belgium, including a stake in a company that owns buildings leased to a Brussels police headquarters.
Reporters then mapped out all the shareholders and directors associated with those firms and found they held the same positions at 28 other Luxembourg companies…
…most of which shared the same address at a building in the country’s capital that also houses an office for the Bank of China, a state-owned commercial bank, plus the French bank BNP Paribas.
Those 28 Luxembourg-registered firms…
….are in turn owned — or were until recently owned — by seven companies registered in the British Virgin Islands whose ultimate ownership is not made public in the territory’s register.
But by scouring the most recent available annual reports and listings in Luxembourg and the U.K., reporters discovered that these BVI companies and five others registered to the Caribbean territory were either nominees acting directly for SAFE, or are controlled by the agency.
Through these complex structures, reporters found SAFE has indirectly acquired minority stakes in dozens of assets across eight European countries:
For instance, in Spain, through an ownership chain involving a BVI firm and three layers of Luxembourg holding companies, SAFE acquired a 33.75 percent stake in a Spanish company that, through another Spanish firm, fully owns Madrileña Red de Gas, a major natural gas distributor supplying hundreds of thousands of homes and businesses across the Madrid region.
SAFE also indirectly holds a 49 percent share in three massive onshore wind farms in Wales and the Scottish Highlands through a similarly complex structure.
In addition, the agency’s U.K. real estate portfolio includes indirect holdings in commercial properties such as the Cabot Circus shopping center in Bristol, the Fosse Shopping Park near Leicester, and university accommodation at several U.K. universities.
But SAFE has diversified beyond energy and real estate.
The agency also indirectly owns around 10.63 percent of a ferry service between the Isle of Wight and the mainland.
In France, meanwhile, reporters found that SAFE controls around 1 percent of the fiber-optic cable company Vauban Infra Fibre SAS through a Luxembourg investment fund.
The company provides high-speed internet to rural communities across France, and has expanded into operating large-scale urban data centers.
And in the Dutch capital of Amsterdam, SAFE indirectly holds a 50 percent stake in a property company called Krasnapolsky Hotels & Restaurants Onroerend Goed through a Luxembourg-registered firm owned by a company in the BVI.
That property firm owns part of the Grand Hotel Krasnapolsky, which is housed in a 19th-century building with a Michelin-starred restaurant and stands opposite King Willem-Alexander’s official reception palace.
Through the same structure, SAFE also indirectly owns stakes in several residential buildings in Amsterdam’s Red Light District.
Just over the border in Brussels, SAFE uses another BVI-Luxembourg structure to hold part of a Belgian company that owns an office building used by EU institutions, including the European Commission.
It also has shares in a Belgian firm that owns a modern office building in the heart of Brussels, home to the headquarters of the Belgian Federal Police.
When reached for comment, an EU Commission spokesperson said the Commission applies “rigorous security requirements throughout the entire lifecycle of its buildings.”
In Poland, SAFE indirectly controls nine local companies that are listed as title owners — or as long-term land rights holders — in 71 land and mortgage registrations.
Each of these covers multiple plots of land across Poland, on top of which sit nine logistics centers used by companies like Amazon and DPD.
Eight of the nine firms share an office at Towarowa 28 in Warsaw.
The Risks of Opacity
The European Parliament and European intelligence agencies have previously expressed concern over the risks of economic dependence, espionage, and sabotage connected to China’s economic presence in critical infrastructure and strategic sectors across the EU.
“It is perfectly clear that ambiguous or hidden ownership structures, especially in strategic economic or infrastructure sectors, can pose a massive risk,” Engin Eroğlu, a German member of the European Parliament representing the centrist Freie Wähler, told OCCRP.
“We already know from the US that Chinese companies, some of which are state-owned, specifically buy land adjacent to military facilities… A similar problem could therefore arise in Europe if we do not gain a clear overview of this non-transparent approach,” he added.
Yet Mario Esteban, a professor in East Asian studies at the Universidad Autónoma de Madrid, cautioned that such concerns should be weighed against Europe’s economic need for Chinese investment.
“There’s a fine line between avoiding overdependence and ending up demonizing all investment that comes from China,” he said. “I think we need a narrative with a little more caution, and an understanding that some of these investments can genuinely generate added value for our country.”
He warned though of an increasing tilt towards a lack of transparency in company ownership — by China and other major investors.
“It’s not exclusive to China,” he said. “There is a more generalized tendency towards opacity.”
While the BVI, a jurisdiction historically known for its high level of corporate secrecy, has recently rolled out a new register of “ultimate beneficial owners,” companies that are majority owned by foreign governments are not required to file this data.
When reporters requested ownership information for the SAFE-linked firms, they were given an error message, and the BVI’s registry did not respond to an additional request sent by email.
But unpicking SAFE’s holdings was difficult inside Europe too, requiring reporters to painstakingly piece together the limited information available in public records.
A ruling in 2022 by the EU’s Court of Justice, which rolled back a legal requirement to make beneficial ownership registers in the EU accessible to the public, has made uncovering these structures even more difficult, said Alex Cobham, the chief executive of the Tax Justice Network.
“We should be afraid of anonymity,” he told OCCRP. “It is better for all of us to know who owns real estate or critical infrastructure.”