Beautiful Virgin Islands

Wednesday, Dec 10, 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 VI, 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 VI.


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 VI


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

Beautiful Virgin Islands
0:00
0:00
Close
UK Officials Push Back at Trump Saying European Leaders ‘Talk Too Much’ About Ukraine
UK Warns of Escalating Cyber Assault Linked to Putin’s State-Backed Operations
UK Consumer Spending Falters in November as Households Hold Back Ahead of Budget
UK Orders Fresh Review of Prince Harry’s Security Status After Formal Request
U.S. Authorises Nvidia to Sell H200 AI Chips to China Under Security Controls
Trump in Direct Assault: European Leaders Are Weak, Immigration a Disaster. Russia Is Strong and Big — and Will Win
"App recommendation" or disguised advertisement? ChatGPT Premium users are furious
"The Great Filtering": Australia Blocks Hundreds of Thousands of Minors From Social Networks
Mark Zuckerberg Pulls Back From Metaverse After $70 Billion Loss as Meta Shifts Priorities to AI
Nvidia CEO Says U.S. Data-Center Builds Take Years while China ‘Builds a Hospital in a Weekend’
Indian Airports in Turmoil as IndiGo Cancels Over a Thousand Flights, Stranding Thousands
Hollywood Industry on Edge as Netflix Secures Near-$60 Bln Loan for Warner Bros Takeover
Drugs and Assassinations: The Connection Between the Italian Mafia and Football Ultras
Hollywood megadeal: Netflix acquires Warner Bros. Discovery for 83 billion dollars
The Disregard for a Europe ‘in Danger of Erasure,’ the Shift Toward Russia: Trump’s Strategic Policy Document
Two and a Half Weeks After the Major Outage: A Cloudflare Malfunction Brings Down Multiple Sites
UK data-regulator demands urgent clarity on racial bias in police facial-recognition systems
Labour Uses Biscuits to Explain UK Debt — MPs Lean Into Social Media to Reach New Audiences
German President Lays Wreath at Coventry as UK-Germany Reaffirm Unity Against Russia’s Threat
UK Inquiry Finds Putin ‘Morally Responsible’ for 2018 Novichok Death — London Imposes Broad Sanctions on GRU
India backs down on plan to mandate government “Sanchar Saathi” app on all smartphones
King Charles Welcomes German President Steinmeier to UK in First State Visit by Berlin in 27 Years
UK Plans Major Cutback to Jury Trials as Crown Court Backlog Nears 80,000
UK Government to Significantly Limit Jury Trials in England and Wales
U.S. and U.K. Seal Drug-Pricing Deal: Britain Agrees to Pay More, U.S. Lifts Tariffs
UK Postpones Decision Yet Again on China’s Proposed Mega-Embassy in London
Head of UK Budget Watchdog Resigns After Premature Leak of Reeves’ Budget Report
Car-sharing giant Zipcar to exit UK market by end of 2025
Reports of Widespread Drone Deployment Raise Privacy and Security Questions in the UK
UK Signals Security Concerns Over China While Pursuing Stronger Trade Links
Google warns of AI “irrationality” just as Gemini 3 launch rattles markets
Top Consultancies Freeze Starting Salaries as AI Threatens ‘Pyramid’ Model
Macron Says Washington Pressuring EU to Delay Enforcement of Digital-Regulation Probes Against Meta, TikTok and X
UK’s DragonFire Laser Downs High-Speed Drones as £316m Deal Speeds Naval Deployment
UK Chancellor Rejects Claims She Misled Public on Fiscal Outlook Ahead of Budget
Starmer Defends Autumn Budget as Finance Chief Faces Accusations of Misleading Public Finances
EU Firms Struggle with 3,000-Hour Paperwork Load — While Automakers Fear De Facto 2030 Petrol Car Ban
White House launches ‘Hall of Shame’ site to publicly condemn media outlets for alleged bias
UK Budget’s New EV Mileage Tax Undercuts Case for Plug-In Hybrids
UK Government Launches National Inquiry into ‘Grooming Gangs’ After US Warning and Rising Public Outcry
Taylor Swift Extends U.K. Chart Reign as ‘The Fate of Ophelia’ Hits Six Weeks at No. 1
250 Still Missing in the Massive Fire, 94 Killed. One Day After the Disaster: Survivor Rescued on the 16th Floor
Trump: National Guard Soldier Who Was Shot in Washington Has Died; Second Soldier Fighting for His Life
UK Chancellor Reeves Defends Tax Rises as Essential to Reduce Child Poverty and Stabilise Public Finances
No Evidence Found for Claim That UK Schools Are Shifting to Teaching American English
European Powers Urge Israel to Halt West Bank Settler Violence Amid Surge in Attacks
"I Would Have Given Her a Kidney": She Lent Bezos’s Ex-Wife $1,000 — and Received Millions in Return
European States Approve First-ever Military-Grade Surveillance Network via ESA
UK to Slash Key Pension Tax Perk, Targeting High Earners Under New Budget
UK Government Announces £150 Annual Cut to Household Energy Bills Through Levy Reforms
×