ARI SHAPIRO, HOST:
The release of the so-called Panama Papers this week has brought attention to a secretive corner of the corporate world - offshore tax havens. The massive release of just one law firm's documents has shown just how common tax havens are.
AUDIE CORNISH, HOST:
Back in 2012, our PLANET MONEY team wondered just how easy it is to set up this kind of shell company, so Chana Joffe-Walt decided to find out.
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CHANA JOFFE-WALT, BYLINE: Honestly, I didn't expect it to be so accessible. Like, I Googled offshore company registration, and there are websites with phone numbers that anyone can call.
UNIDENTIFIED MAN: Thank you for calling Globes America. Press four to access our customer service department.
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JOFFE-WALT: I called about a dozen places, left some messages...
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JOFFE-WALT: Hi, my name is Chana Joffe-Walt. I'm calling hoping to set up a shell company somewhere offshore - Cayman Islands, Belize, Bahamas. I don't know. I would love your help trying to figure out how to do that. My number's...
In the end, I spoke with five providers on the phone. I told everyone I talked to I work with a reporting team and we wanted to set up a company in a tax haven. Anna Vaivade told me I could record our conversation. She was in Latvia, but she offers company registration in Seychelles, British Virgin Islands or Belize. And she told me all places with no taxes and extreme confidentiality.
ANNA VAIVADE: In many of our cases, no third parties, no creditors, no other companies have any access to this information.
JOFFE-WALT: So if somebody comes to you and says I want to know if Chana Joffe-Walt has money in this Belize company, what would you say?
VAIVADE: It's confidential information and we cannot provide this information.
JOFFE-WALT: What if it's the U.S. government?
VAIVADE: To U.S. government, we don't give information.
JOFFE-WALT: Anna said the U.S. government would have to get a Belizean court order before they would tell them anything about my money. At which point I asked, how do I get money in and out of my offshore company? And she said, oh, once you register a company, the company can get a bank account. And that bank account can be in a third country.
VAIVADE: And we have banks in other countries in the world.
JOFFE-WALT: Can I open a Swiss bank account?
VAIVADE: Yes, we can do that.
JOFFE-WALT: So I can create a bank account in Switzerland that's tied to my shell company in Belize?
VAIVADE: Yes, you can do that.
JOFFE-WALT: How quickly can I do that?
VAIVADE: Setting up company is quite fast. In one week, it can definitely be done.
JOFFE-WALT: I could talk to you in Latvia and register a company in Belize that has a Swiss bank account, and I can do that in a week?
VAIVADE: Yes. We're in the 21st century, and all that is possible.
JOFFE-WALT: It is also all legal. Anna told me she could sell me a company that they already registered a couple of years ago if I wanted to look like I've been in business for a while. That's also legal. And she offers a service where you can buy a board of directors for your company.
VAIVADE: And in all public documents where the director's name appears, it will be our name.
JOFFE-WALT: Then it looks like the company is run by you guys, by the names on the documents. Nobody knows that I'm involved in a company.
VAIVADE: Yeah, that is the idea - absolute confidentiality.
JOFFE-WALT: OK. I can think of legitimate reasons why you might want to have a company in Belize with a bank account in Switzerland with a fake Latvian board of directors. Maybe you don't want your competitors to know what you're up to, or maybe you're a large international business operating across borders and it's just easier to have accounts offshore.
But what is striking about all of the offshore services available is that, while totally legal, they do seem to make it incredibly easy to get away with things that are not legal, like evading taxes or stashing your drug money. It's not as easy as it could be, though. You do have to fax a notarized passport to get one of these offshore operations set up. I also had to get a reference letter from a bank, accountant and a lawyer.
Jason Sharman, an Australian guy who studies tax havens at Griffith University - he says that all that due diligence is relatively new. It's because big, rich countries have gotten together to crack down on tax havens - one big country in particular.
JASON SHARMAN: In the rest of the world, the United States is seen as taking a very, very robust and aggressive line towards tax havens.
JOFFE-WALT: Interestingly, the way an academic like Sharman studies tax havens is by doing exactly what we did. He's been in touch with hundreds of providers in dozens of countries trying to register his own companies. And he says his experiences were all very similar to ours, with one big difference. There was one country where, when he tried to register companies, they almost never asked him for documentation.
SHARMAN: No, no. No passport, no ID number, no driver's license, nothing at all. Yeah, so really they had no idea who I was at all.
JOFFE-WALT: Which country stood out among all the others?
SHARMAN: The United States. The easiest place in the world to register a business anonymously is definitely the United States.
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UNIDENTIFIED WOMAN: Thanks for calling Delaware Intercorp.
JOFFE-WALT: Hi. I wanted to talk to someone about registering a company in Delaware.
So, of course, we had to try to see how it compared to Belize. Registering our Delaware company took one day, three emails, and they asked for absolutely no documentation. I gave them my real name, but I could have been anybody from anywhere in the world. We are now the proud owners of two companies - Unbelizable, Inc., in Belize City, and Delawho, right here in the United States.
SHAPIRO: That was Chana Joffe-Walt, formerly of our Planet Money team, showing us back in 2012 just how easy it was and still is to set up shell companies. Transcript provided by NPR, Copyright NPR.
