Arab Press

بالشعب و للشعب
Friday, Aug 22, 2025

IMF: BVI home to ‘phantom investments’

IMF: BVI home to ‘phantom investments’

The Virgin Islands is one of the 10 economies in the world that together host more than 85 percent of an estimated $15 trillion in “phantom investments” annually, according to a new report from the International Monetary Fund.

Two countries- Luxembourg and the Netherlands- alone host nearly half of these investments, according to the report.

The BVI, along with its fellow international financial centres of Hong Kong, Bermuda, Singapore, the Cayman Islands, Switzerland, Ireland and Mauritius, round out the list.

The report defines “phantom investments” as foreign direct investment that brings no “capital in service of productivity gains.”

Although FDI amounts to $40 trillion annually worldwide, according to the report, “much of it is phantom in nature - investments that pass through empty corporate shells [that] have no real business activities. Rather, they carry out holding activities, conduct intrafirm financing, or manage intangible assets — often to minimise multinationals’ global tax bill.”

Some of the 10 countries on the list have corporate tax rates as low as 0 percent, as in the BVI.



Data sources
Using FDI data from the Organisation for Economic Cooperation and Development with the global coverage of the IMF’s Coordinated Direct Investment Survey, the report attempts to create what it calls a “global FDI network.”

Its goal is to map all “bilateral investment relationships” and determine real FDI from “phantom” FDI, which the report found now makes up nearly 40 percent of all FDI worldwide, up from a mere 30 percent a decade ago.

A different study conducted last year by the IMF found that “phantom” FDI was growing faster than the world economy itself since the financial crisis.

“Despite targeted international attempts to curb tax avoidance - most notably the G20 Base Erosion and Profit Shifting initiative and the automatic exchange of bank account information within the Common Reporting Standard (CRS) - phantom FDI keeps soaring,” the report’s authors wrote.



In the BVI
The VI abides by the Common Reporting Standard and is a member of the OECD’s Inclusive Framework on BEPS, and has long contended that the transactions it facilitates result in a net benefit to the global economy.

IFCs facilitated $1.6 trillion of financing to developing countries between 2007 and 2014, according to a BVI Finance-commissioned report by the Overseas Development Institute, an independent London-based think tank, which also found that financing galvanised through IFCs boosted developing countries’ gross domestic product by $400 billion and tax revenues by $100 billion during the 2007-2014 period.

However, the IMF contends that better data is needed to keep up with today’s “financial engineering.”

“Today, a multinational company can … shift large sums of money across the globe, easily relocate highly profitable intangible assets, or sell digital services from tax havens without having a physical presence,” the authors wrote. “The new global FDI network is useful to identify which economies host phantom investments and their counterparts, and it gives a clearer understanding of globalisation patterns.”

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Trump Backs Putin’s Land-for-Peace Proposal Amid Kyiv’s Rejection
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
Iranian Protection Offers Chinese Vehicle Shipments a Cost Advantage over Japanese and Korean Makers
United States Sells Luxury Yacht Amadea, Valued at Approximately $325 Million, in First Sale of a Seized Russian Yacht Since the Invasion of Ukraine
Saudi Arabia accelerates renewables to curb domestic oil use
Cristiano Ronaldo and Georgina Rodríguez announce engagement
Asia-Pacific dominates world’s busiest flight routes, with South Korea’s Jeju–Seoul corridor leading global rankings
Private Welsh island with 19th-century fort listed for sale at over £3 million
Sam Altman challenges Elon Musk with plans for Neuralink rival
Australia to Recognize the State of Palestine at UN Assembly
The Collapse of the Programmer Dream: AI Experts Now the Real High-Earners
Armenia and Azerbaijan to Sign US-Brokered Framework Agreement for Nakhchivan Corridor
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
Trump Deploys Nuclear Submarines After Threats from Former Russian President Medvedev
Germany’s Economic Breakdown and the Return of Militarization: From Industrial Collapse to a New Offensive Strategy
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Iranian President Reportedly Injured During Israeli Strike on Secret Facility
Kurdistan Workers Party Takes Symbolic Step Towards Peace in Northern Iraq
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
×