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 round-tripping.
- 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 avoidance.
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
UNCTAD
Palais des Nations, Geneva
Tel: +41
22 917 5797
www.unctad.org/diae
www.unctad.org/wir
(World Investment Reports)
http://unctad-worldinvestmentforum.org/