Since 2013 individuals who had served prison time or have outstanding tax liabilities cannot incorporate companies or become sole traders.

But changes to the companies act passed in 2015 tighten these provisions further.

As of 1 January, the ban affects all those who had been fined by inspectors at least twice in the last three years for hiring undeclared workers.

The same applies for persons who had had 50% of the capital of a limited liability company which was erased from the companies register in the past three years on the basis of insolvency law.

This is expected to prevent the daisy-chaining of companies, a practice widely used by many who refuse to pay their workers wages or contributions, shut down the firm and start a new one.

The government pushed through the legislative motion with the argument that there were still many cases of undeclared work and fraud despite the previous crackdown.