Question:

China leaks to the Virgin Islands

by  |  6 years, 3 month(s) ago

0 LIKES UnLike

One of the main attractions of Tortola, the largest of the British Virgin Islands, a small archipelago in the Caribbean with palm trees and white sandy beaches, rum distilleries are his cane. Its citizens boast that the island has been den of pirates and buccaneers. They say Robert L. Stevenson was inspired by one of these islands to write Treasure Island. And you still have the secret of rum drinking pirates. But the real secret of this British overseas territory 's financial sector. This small jurisdiction consists of some 40 small islands home to over one million businesses, most of Chinese origin.

The Virgin Islands Caribbean have heart but her lungs are Chinese. This archipelago is the second largest foreign direct investor in China, according to official data. About 10% of foreign investment received by China comes from this offshore center.

"Over 40 % of the business of financial services in the British Virgin Islands from Asia -Pacific," said the prime minister of the islands, Orlando Smiths, in May last year to release a micro office to Hong Kong, according to local press picked. "There is a very strong financial connection between China, Hong Kong, Singapore and the British Virgin Islands," he said. The main entrance to this opaque jurisdiction is the fees received by the establishment and maintenance of the companies on behalf of foreigners.

The British Virgin Islands are considered a tax shelter despite the efforts of his government to combat this tag. Chinese corporate oligarchy has colonized the financial activity of the island with hardly a trace. Running from Hong Kong. There you can open a company established in the micro state to escape official controls and evade taxes.

Nick Shaxson, author of Treasure Islands (Islands of the Treasury), the origin of tax havens, explains in his blog how the Chinese use the Virgin Islands: create companies within the territory moved offshore where the proceeds of their investments in the outside and from there move to China. Along the way they have benefited from the tax privileges that Beijing offers foreign investors. It is also common for Chinese companies move there profits through accounting and engineering through transfer pricing - to reduce your tax bill. In fact, in most cases it is only a matter of tax avoidance, Shaxson explains.

The landscape of Road Town (Tortola capital) consists of palm trees, sandy beaches and peaceful marina with luxury yachts. There is hardly any presence of Chinese financial invasion. The micro state has about 27,000 inhabitants and has registered more than 480,000 companies, according to official data islands watchdog that does not include trusts, foundations and investment funds. Portcullis Trustnet, business broker who operates in the area and whose database has accessed the International Consortium of Investigative Journalists (ICIJ, its acronym in English), says on its website that more than 1.4 million entities, about 50 entities for every citizen. Some of these companies only last a few weeks. It is estimated that 40 % of the world 's offshore companies registered in the archipelago. Political stability, facilities for a new online entity, the legal guarantees and low administrative cost are the main advantages of this archipelago.

Despite this bubbly business in Road Town there is only one judge, according to the Hong Kong newspaper South China Mornig Post. This judge just gives supply to resolve the many legal disputes multimillion ownership of assets held entities, most foreign heirs.

The financial activity of the Caribbean archipelago off after the financial deregulation undertaken by former British Prime Minister Margaret Thatcher in the eighties. But it was not until 1996, after the visit of a delegation of the British overseas territory to China to sell their tax benefits when the financial ties between the two were fired.

Although the Chinese government and have been micro information exchange agreements since 2009, they do not do much. When from China interested in the ownership of a company, does not usually appear but the registered name of another company based in Samoa, or Cayman.

 Tags: China, Islands, leaks, Virgin

   Report
SIMILAR QUESTIONS
CAN YOU ANSWER?

Question Stats

Latest activity: 6 years, 3 month(s) ago.
This question has 0 answers.

BECOME A GUIDE

Share your knowledge and help people by answering questions.