The Financial Times | 21st June 2017:
Offshore companies’ funds more than double the IMF’s estimate in 2010.
Offshore companies in the British Virgin Islands have assets of more than $1.5tn, more than twice the sum estimated in 2010.
Two-thirds of the offshore companies registered in the BVI are used for “corporate structuring”, and more than 140 listed businesses in London, New York and Hong Kong have a unit in the BVI, according to research carried out on behalf of the BVI government.
These units can be used for tax planning, but can also be useful as a tax-neutral hub for investors from different locations. Companies are also attracted by the BVI’s legal system, which mirrors British law.
A further quarter of the companies represent funds and investment vehicles, while property holdings and family wealth each account for 5 per cent of the overall number.
The BVI, which derives more than three-fifths of government revenues from its financial sector, has been hit by the global financial crisis and the ensuing backlash against offshore finance. Nevertheless, the total assets of its companies are now twice as high as they were when estimated at $615bn in 2010 by the International Monetary Fund.
Capital Economics, the consultancy that carried out the research, acknowledged that “the scale of financial activity carried out on the islands may appear incongruous in a small jurisdiction with a population no greater than an English market town”. But it said the perception it was a tax haven was based on a misunderstanding.
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