The Heavens

A PROJECT BY GABRIELE GALIMBERTI AND PAOLO WOODS

Tax havens have quietly taken the world by storm. More than half of world trade now passes through these places. They are in the news every day, and are fast becoming a constant fixture of the political debate.
The growing flow of articles and reports on this poorly understood subject are usually illustrated with images of palm-fringed tropical beaches.

Is that what tax havens really look like? From Delaware to Jersey; from Singapore to Panama; from the British Virgin Islands to the City of London, passing through Cayman, Luxembourg and the Netherlands, photographers Paolo Woods and Gabriele Galimberti take us on a tour into a rarely seen, secretive world that is quite different from what we imagine.

For over two years they have travelled to the offshore centers that embody tax avoidance, secrecy, offshore banking and extreme wealth, driven by a constant obsession with translating this rather immaterial subject into images. They have produced a body of work that shows what these places look like, but, even more importantly, what they mean.
It has been estimated that as much as $32 trillion are sheltered in tax havens worldwide, largely out of sight. That is 13 times the GDP of the United Kingdom. Much of this money is stashed offshore by very wealthy individuals. But a growing share is owned by companies that use tax havens, often legally, to escape financial regulations or to reduce their taxes, draining the resources countries can spend on education, health care and security.
Tax havens are not an exotic tropical eccentricity, but have become a structural instrument of the globalized economy. They confront us with fundamental moral issues, involving the relationships between public and private; between companies and states; and between the haves and the have-nots.

Woods and Galimberti have conceived the BOOK as the slick annual report of a successful company, borrowing the photographic tropes and language of the world they have investigated. The company, aptly named “The Heavens”, actually exists and has been created by the authors in Delaware, where for a small fee – with no documents required or questions asked – an LLC can be formed in less then 20 minutes. “The Heavens” is now based in the same Delaware office as Apple, Bank of America, Coca-Cola, General Electric, Google, Wal-Mart and 285,000 other businesses.

www.theheavensllc.com
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    An employee of “Jetpack Cayman” demonstrates this new watersport, now available on the island. A 2000cc motor pumps water up through the Jetpack, propelling the client out of the sea (359 USD for a 30-minute session). Mike Thalasinos, the owner of the company, remarks, “The Jetpack is zero gravity, the Cayman are zero taxes, we are in the right place!” Grand Cayman.

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    Mr. Neil M. Smith is the British Virgin Islands’ Finance Secretary, photographed here in his office in Road Town, Tortola. The BVI is one of the world’s most important offshore financial service centers and the world leader for incorporating companies. There are more then 800,000 companies based in the BVIs but only 28,000 inhabitants. The BVIs are the second-biggest direct investors in China, just after Hong Kong. British Virgin Islands

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    Fiona Woolf, the Lord Mayor of The City of London, is photographed in her residence, the Mansion House. The City of London, also known as the Square Mile, is a small and peculiar local authority area lodged within the geographical center of the greater London metropolis. The City’s resident population is about 8,000, but over 400,000 people work here every day. The London Stock Exchange, Lloyd’s and the Bank of England are all based here, along with 500 banks from around the world. The Lord Mayor, not to be confused with the Mayor of London, runs the local authority in the Square Mile – known as The City of London Corporation – but is also, the Corporation’s website declares, “a trusted spokesperson for the business and financial community.” Even more confusingly, the term “City of London,” often just called “The City,” is also commonly taken broadly to mean the UK financial services sector, which in geographical terms has spilled far beyond the borders of the Square Mile and makes the UK the world’s largest exporter of financial services. City of London.

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    Tony Reynard (on the right) and Christian Pauli, in one of the high-security vaults of the Singapore Freeport. Mr. Reynard is the Chairman of the Singapore Freeport and Mr. Pauli is the General Manger of Fine Art Logistics NLC, which in addition to Singapore, also has vaults in Geneva, Monaco and Luxembourg. The Singapore Freeport, which was designed, engineered and financed by a Swiss team of businessmen, is one of the world’s premier maximum-security vaults, where billions of dollars in art, gold and cash are stashed. Located just off the runway of Singapore’s airport, the Freeport is a fiscal no-man’s land where individuals as well as companies can confidentially collect valuables out of reach of the taxman. Singapore

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    Richard J. Geisenberger (standing) is Delaware’s Chief Deputy Secretary of State. He is photographed in the Wilmington State Building, overseeing one of the more than 5000 incorporations that take place daily in Delaware. It takes a few minutes, no questions asked, to incorporate a company, and the state office stays open until midnight Monday through Thursday. More than 50% of all U.S. publicly traded companies and 63% of the Fortune 500 are incorporated in Delaware. Delaware.

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    Besides being one of the world’s major offshore centers, the Cayman Islands are also a prime tourist destination, attracting low-cost cruise ships travelling to the Caribbean. Tourists disembark on the island for one day and are offered a range of attractions including a one-hour all-drinks-included “pirate ship trip,” with Jamaican immigrants playing the pirates. Grand Cayman

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    Kandra Powery, 25, and her three children, Kayla, 9, Kaleb, 8, and Janae, 2. The Caymans, a thriving offshore financial center, is the fourth-richest country in the Americas (GDP per capita) but has real pockets of poverty. 55% of the labor force is composed of non-nationals occupying both low-paying jobs in the service sector and high-end jobs in the finance industry. Grand Cayman

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    John E. Chapoton (standing) is the guest speaker at the monthly luncheon of the Wilmington Tax Group, where professionals gather to hear speakers on topics of policy, administration, and tax law. In his speech, Mr. Chapoton advocates for a tax reform in line with the Tax Reform Act of 1986, which, as assistant Secretary of the Treasury under President Reagan, he helped formulate. Under that reform, the top tax rate for individuals was lowered from 50% to 28%. Delaware.

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    Mrs. Lorna Smith is a financial industry expert working on the promotion and the image of the BVI. She is Chairperson of the Financial Services Business Development Committee. She opened the BVI interest offices in Hong Kong and London and takes part in negotiations with the OECD concerning tax treaties. She is also the country’s First Lady. Her husband, Dr. the Honourable D. Orlando Smith, is the Premier. British Virgin Islands

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    Andreas Ugland and family are depicted in a large oil painting hanging at the entrance of Mr. Ugland’s “Cayman Motor Museum”. The museum houses his unique collection of Ferraris, Rolls-Royces, Bentleys and vintage motorbikes. Mr. Ugland, who was born in Norway, acquired Caymanian citizenship in the 1990s. He is a billionaire, Chairman of Ugland International Holdings and runs a number of companies and banks in the Cayman Islands, the US and Europe. This painting illustrates his achievements and passions. At the center of the painting is the rather banal looking “Ugland House,” a building where more then 19,000 companies are registered. It has become such a symbol of tax avoidance that President Obama has stated that “either this is the largest building in the world or the biggest tax scam on record.” Grand Cayman

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    The Cayman Islands are the fifth-largest financial center in the world, with twice as many companies based there as there are citizens. Many of these companies have a post office box but no office. Grand Cayman

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    A man floats in the 57th-floor swimming pool of the Marina Bay Sands Hotel, with the skyline of “Central,” the Singapore financial district, behind him. Singapore

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    In a pool in St. Helier, children swim towards an artificial island. The pool is fed by the high tide’s seawater. Jersey experiences tides of up to ten meters, some of the world’s largest. Jersey is ranked ninth on the 2013 financial secrecy index compiled by the Tax Justice Network, making it one of the world’s most important secrecy jurisdictions. Jersey

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    Adrian Cheng briefs members of his communications team. Mr. Cheng, ranked 38th on the Fortune “40 under 40” list, is the executive director of Chow Tai Fook Group, a company whose businesses range from jewelry to transportation, and from casinos to telecommunications. He is also the executive director and joint manager of the real estate company New World Development Company Limited. The complex network of businesses owned by Chow Tai Fook enterprises is based in Hong Kong, but the companies which comprise it are incorporated in the BVI, Delaware or the Caymans. The Chow Tai Fook jewelry company is one of the world’s biggest jewelry retailers, with more then 1,000 stores (Tiffany & Co. has fewer than 100). In 2010, Chow Tai Fook purchased a 507-carat diamond for $35.3 million, setting a new record for the highest price paid for a rough diamond. Hong Kong

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    Phil Davis, 46, is Vice President and General Manager of Dell for Asia Pacific and Japan. He has been living in Singapore for over 5 years. According to Bloomberg, Dell has based a substantial part of its operations in Singapore for purposes of tax optimization. Mr. Davis is seen standing in the Maxwell Food Court. Singapore

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    The lobby of Ernst & Young’s headquarters in London. E&Y is one of the “Big Four” audit firms. It has 190,000 employees and more than 700 offices in over 150 countries. It is the third-largest professional services firm in the world by aggregated revenue. The “Big Four” (PwC, Deloitte, KPMG and E&Y) are often accused of being the backbone of offshore finance and aggressive tax avoidance strategies. They collectively audit 99% of FTSE 100 companies. City of London

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    Under Jersey’s “High value residency scheme,” individuals who earn at least one million dollars a year are actively encouraged to relocate to the Island and are automatically given residential status, so that they can immediately benefit from the Island’s very low tax regime. Jersey’s branch of the real estate group Savills serves this kind of clientele, with listings like La Glinette farm in St. Brelade with an asking price of $11 million. Jersey

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    A $100-bill towel at Rehoboth Beach, a popular vacation destination for businessmen from Washington DC. Delaware.

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    One hour south of Luanda lies the 18-hole Mangais championship golf course, host to PGA tournaments. Mercer, a leading financial analysis firm, ranks Luanda as the most expensive city in the world. This is despite the fact that two-thirds of Angola’s population lives on less than $2 a day and 150,000 children die before the age of 5 each year, from causes linked to poverty. Over 98% of Angola’s exports come from oil or diamonds. Researchers James Boyce and Léonce Ndikumana showed that Angola suffered $80 billion in capital flight from 1970-2008, with most of the money ending up in tax havens. Angola.

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    A native Guna walks by a group of affluent Panamanians spending the weekend on the San Blas Islands. The archipelago of 365 islands, a popular tourist destination, is home to the Guna Indians, one of Panama’s indigenous groups. The Guna have lived on the islands since they were driven from Panama during the Spanish invasion. They have their own language and social organization and very rarely mix with other Panamanians. Panama.

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    A woman who has just purchased some Zara clothing walks by ITX Merken, a nondescript subsidiary of Inditex, Zara’s parent company, in Amsterdam. According to Bloomberg, Inditex, the world’s largest fashion retailer, has shifted almost $2 billion in profits to this tiny unit operating in the Netherlands. Although this subsidiary employs only about 0.1 percent of Inditex’s worldwide workforce, it reported almost 20 percent of the parent company’s global profits in 2013. The Netherlands

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    Mr. Adolfo Enrique Linares in his office in Punta del Este. Mr. Linares is a partner in the law firm of Tapia Linares y Alfaro. The firm handles incorporation and management of companies in Panama, as well as in other jurisdictions such as the British Virgin Islands and Belize. Mr. Linares is a vocal advocate of Panama’s right to operate the financial policy of its choosing, even if the OECD classifies it as a tax haven. Panama

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    Bicycle parking lot in Zuid, a growing financial center on the edge of the city of Amsterdam where thousands of empty mailbox companies used to avoid tax are located. The Netherlands is one of the biggest enablers of aggressive corporate tax avoidance and has built a booming industry around promoting and selling Dutch tax services to global companies. According to many specialists, the Netherlands – which has a suite of offerings to cut corporate taxes on, among others, interest, royalties, dividend and capital gains income from foreign subsidiaries, – is a tax haven. The Netherlands.

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    A view of the city of Luxemburg from the bar of a luxury hotel. Luxembourg.

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    A technician works on a rack at C5’s server in Guernsey. C5’s facility provides businesses with a secure, temperature-controlled environment with double emergency power back-ups, cooling systems and ultra-fast fiber optic connection. This high-capacity server provides hosting to hundreds of eGaming companies based in the neighboring Channel Island of Alderney. Through this data center, Alderney transmits more Internet e-gambling traffic than any other location on the globe. Its business is much larger than the combined activity of its three offshore rivals: Gibraltar, the Isle of Man and Malta. For gambling groups, the principal attraction of Alderney is that there are no gambling or corporation taxes. One of the companies that was based in Alderney is the infamous Full Tilt Poker, accused by the U.S. Justice Department of defrauding online poker players out of more than $300 million in 2011. Guernsey

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    At the Hong Kong Stock Exchange, real-time stock quotations are reflected in a photograph celebrating the successful 2009 listing of a Chinese bank, which raised 31 billion HK dollars. Hong Kong’s Stock Exchange is the sixth-largest in the world and the second in Asia in terms of value of shares traded. Hong Kong

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    The Sevva Club attracts a crowd of executives and managers from Hong Kong’s financial district, who come here to unwind. The sweeping vista from the club terrace takes in the HSBC building designed by Norman Foster, where, even late into the evening, employees can be seen at their desks. HSBC, one of the world’s largest banks, was founded in Hong Kong. It has been embroiled in various scandals involving money laundering and offshore dealings, which led to a record $1.9 billion fine in the US in 2012. HSBC was recently involved in the Swiss Leaks scandal, where it allegedly profited from 180.6 billion euros that passed through its secret accounts held by, amongst others, corrupt politicians, dictators, tax evaders, arms dealers and blood-diamond smugglers. Hong Kong.

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    Nicole, 34, from the Philippines, works for a Singaporean family as a maid. On her day off, she prostitutes herself, picking up men at the Orchard Towers shopping center. Just like hundreds of other Filipinas, she is earning extra money to send back home. On the day when she works as a prostitute, she can make as much as she does in a month working as a maid. She is photographed in a hotel room where she brings her clients. The government in Singapore has recently passed a law that will require employers to give their “Foreign Domestic Workers” a minimum wage and one day off a week. Although the legislation passed, polls in Singapore have shown that a majority of the population was against it. Singapore

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