Dear Colleagues,

It is my pleasure to share with you the latest issue of UNCTAD's Global 
Investment Trends Monitor which covers the latest trends of investment 
flows through offshore financial hubs.

The key message: Investment flows through offshore financial hubs declined 
but remain at high level 
In 2015, the volatility of investment flows to offshore financial hubs – 
including those to offshore financial centers and special purpose entities 
(SPEs) – rose significantly. These flows, which are excluded from UNCTAD’s 
FDI statistics, declined but remain sizable. 
Financial flows through SPEs surged in volume during 2015. The magnitude 
of quarterly flows through SPEs, in terms of absolute value, rose sharply 
compared with 2014, reaching the levels registered in 2012-2013. 
Pronounced volatility, with flows swinging from large-scale net investment 
in the first three quarters to drastic net divestment in the last quarter, 
tempered the annual result, which dipped to US$221 billion. 
Investment flows to offshore financial centers continued to retreat from 
its recent high of US$132 billion in 2013, but remained roughly in line 
with the flows of previous years. Investment to these jurisdictions, which 
hit an estimated US$72 billion in 2015, had risen in recent years by the 
growing flows from multinational enterprises (MNEs) located in developing 
and transition economies, sometimes in the form of investment 
The proportion of investment income booked in low tax, often offshore, 
jurisdictions is high – and possibly growing – despite the slowdown in 
offshore financial flows. The disconnect between the locations of income 
generation and productive investment results in substantial fiscal losses, 
and is therefore a key concern for policy makers. 
The persistence of financial flows routed through offshore financial 
mechanisms highlights the pressing need to create greater coherence among 
tax and investment policies at the global level. The international 
investment and tax policy regimes are both the object of separate reforms. 
Better managing their interaction would not only help to avoid conflict 
between the regimes but would also make them mutually supporting, with 
positive implications for productive cross-border investment.  In the 
World Investment Report 2015, UNCTAD proposed a set of guidelines for 
coherent international tax and investment policies that could help realize 
the synergies between investment policy and initiatives to counter tax 

For the latest FDI trends please see UNCTAD's Global Investment Trends 
Monitor issued in January 2016 . An in-depth analysis of FDI trends will 
feature in the forthcoming World Investment Report 2016, to be published 
in 21 June 2016. 

James Zhan
Director, Investment and Enterprise
Team Leader, World Investment Report
Palais des Nations, Geneva
Tel: +41 22 917 5797 (World Investment Reports)