Top tax haven got more investment in 2013 than India and Brazil: U.N

Tue Jan 28, 2014 2:05pm EST
 
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By Tom Miles

GENEVA (Reuters) - The British Virgin Islands got more foreign direct investment last year than the major emerging economies of India and Brazil combined, a United Nations 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 $92 billion of foreign cash in 2013, according to preliminary figures compiled by the U.N. trade and economy thinktank UNCTAD.

That was the fourth biggest haul of investment globally. The world's biggest economy, United States, attracted $159 billion.

China, the world's second biggest economy, got $127 billion, while major oil and metals producer Russia took in just $2 billion more than the British Virgin Islands.

Brazil and India were further down the ranking, with $63 billion and $28 billion respectively.

For most countries, foreign direct investment mainly consists of companies spending on crossborder corporate acquisitions and new overseas projects.

But 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" or 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 centre," said James Zhan, director of UNCTAD's investment and enterprise division.   Continued...

 
A security guard walks past the United Nations logo at the U.N. Headquarters in New York, August 31, 2013. REUTERS/Carlo Allegri