The British Virgin Islands got more foreign direct investment last year than the major emerging economies of India and Brazil combined, a UN survey said on Tuesday.
The Caribbean archipelago, a tax haven otherwise dependent on tourism, has jumped up the league table of top investment destinations in the past five years.
It welcomed US$92 billion of foreign cash last year, according to preliminary figures compiled by the Geneva-based UN Conference on Trade and Development (UNCTAD) think tank.
That was the fourth-biggest haul of investment globally. The world’s biggest economy, the US, attracted US$159 billion.
The world’s second-biggest economy, China, got US$127 billion, while major oil and metals producer Russia took in just US$2 billion more than the British Virgin Islands.
Brazil and India were further down the ranking, with US$63 billion and US$28 billion respectively.
For most countries, foreign direct investment mainly consists of companies spending on crossborder corporate acquisitions and new overseas projects.
However, for the British Virgin Islands, most of the money is transferred quickly in and out of the country or cash moved through the treasury accounts of large firms, which UNCTAD terms “transnational corporations” (TNCs).
“In the British Virgin Islands there are some financial companies that perform the role of treasuries of the TNCs, as a kind of profit unit or profit center,” UNCTAD investment and enterprise division director James Zhan said.
“The TNCs’ revenues basically flow from their foreign affiliates in countries with higher tax rates to there,” he told a news briefing.
The islands’ annual inflow of foreign investment was up 40 percent from a year ago and continues a trend that took off after the economic crisis struck and governments began cracking down on tax avoidance.
Zhan said the British Virgin Islands’ boom in investment would be unlikely to continue at the same pace because regulators were determined to stop such flows.
“In the medium or longer term we see that the role in this respect may reduce,” he said.
“Governments are looking into the situation and trying to tighten up their regulatory framework both at the national and international level,” he said.
The main casualty of such regulation was likely to be big companies’ treasury flows, he said, adding that UNCTAD was working on a study to show how big the impact would be.
The continued flows to the islands, which UNCTAD has previously referred to as a tax haven, is likely to keep it under the microscope of the G20 leading economies, which has said it wants to put pressure on “non-cooperative jurisdictions.”
The G20 has asked the Organisation for Economic Co-operation and Development (OECD) to lead efforts on curbing international tax evasion and avoidance, and the organization’s tax transparency forum has named the British Virgin Islands as one of five countries that failed to meet international standards on tax transparency.
Each of the five either failed to share taxpayer information with other countries or to gather information on beneficial ownership of corporate entities registered on their territory, or both.
The OECD has said big international companies, banks and agencies may think twice about investing through these jurisdictions.
UNCTAD said the total global flow of foreign direct investment rose by 11 percent to US$1.46 trillion last year and could reach US$1.6 trillion this year and US$1.8 trillion next year.
In Italy’s storied gold-making hubs, jewelers are reworking their designs to trim gold content as they race to blunt the effect of record prices and appeal to shoppers watching their budgets. Gold prices hit a record high on Thursday, surging near US$5,600 an ounce, more than double a year ago as geopolitical concerns and jitters over trade pushed investors toward the safe-haven asset. The rally is putting undue pressure on small artisans as they face mounting demands from customers, including international brands, to produce cheaper items, from signature pieces to wedding rings, according to interviews with four independent jewelers in Italy’s main
Japanese Prime Minister Sanae Takaichi has talked up the benefits of a weaker yen in a campaign speech, adopting a tone at odds with her finance ministry, which has refused to rule out any options to counter excessive foreign exchange volatility. Takaichi later softened her stance, saying she did not have a preference for the yen’s direction. “People say the weak yen is bad right now, but for export industries, it’s a major opportunity,” Takaichi said on Saturday at a rally for Liberal Democratic Party candidate Daishiro Yamagiwa in Kanagawa Prefecture ahead of a snap election on Sunday. “Whether it’s selling food or
CONCERNS: Tech companies investing in AI businesses that purchase their products have raised questions among investors that they are artificially propping up demand Nvidia Corp chief executive officer Jensen Huang (黃仁勳) on Saturday said that the company would be participating in OpenAI’s latest funding round, describing it as potentially “the largest investment we’ve ever made.” “We will invest a great deal of money,” Huang told reporters while visiting Taipei. “I believe in OpenAI. The work that they do is incredible. They’re one of the most consequential companies of our time.” Huang did not say exactly how much Nvidia might contribute, but described the investment as “huge.” “Let Sam announce how much he’s going to raise — it’s for him to decide,” Huang said, referring to OpenAI
Nvidia Corp’s negotiations to invest as much as US$100 billion in OpenAI have broken down, the Wall Street Journal (WSJ) reported, exposing a potential rift between two of the most powerful companies in the artificial intelligence (AI) industry. The discussions stalled after some inside Nvidia expressed concerns about the transaction, the WSJ reported, citing unidentified people familiar with the deliberations. OpenAI makes the popular chatbot ChatGPT, while Nvidia dominates the market for AI processors that help develop such software. The companies announced the agreement in September last year, saying at the time that they had signed a letter of intent for a strategic
RSS