Report highlights Jersey as a conduit for FDI
Jersey has attracted foreign direct investment worth more than US$65bn and distributed FDI worth more than US$75bn, according to a new report, which highlights the territory’s contribution to the global economy, reports Tax News.
The report, “Jersey’s Contribution to FDI,” was produced by global management advisory firm Investment Consulting Associates at the request of Jersey Finance, the island’s financial services promotional agency. It identifies the strengths of Jersey’s finance industry in facilitating FDI, the territory’s contribution to the global economy, and the appeal of international financial centers (IFCs) more widely in supporting cross-border investment.
Launched at a recent Jersey Finance Africa investment seminar held in London and at a members briefing in Jersey, the report found that Jersey attracted a stock of inbound FDI totalling US$65.7bn in 2012. The main source of this was the UK (56.3 per cent of the total), while FDI was also sourced from Ireland (14.6 per cent) and Russia (7.8 per cent), as well as India, France and South Africa.
In addition, the stock of outbound FDI distributed globally by Jersey in 2012 was US$75.8bn, with the UK again accounting for the largest share (44.8 per cent of the total). Other notable destinations were the Netherlands (10.3 per cent) and Germany (7.9 per cent), as well as Russia, Poland, and Hungary.
The report highlighted that Jersey-originated FDI supported 94 greenfield projects between 2003 and 2014. These projects had an aggregated value of US$13.34bn and created over 39,000 foreign jobs. These included construction and natural resources projects in emerging and developing markets, as well as the service industries, such as financial, business, and software services in developed countries and other IFCs.
The top-20 recipient countries for Jersey capital and in which the most jobs were created included: Poland, Turkey, and Netherlands. Moreover, several African developing markets including Uganda, Mozambique, Egypt, and Senegal have also benefited directly and indirectly from FDI originating from Jersey.
Overall, the report found that total global FDI by corporate investors increased from USD1.33 trillion in 2012 to US$1.41 trillion in 2013, while investments routed through IFCs continue at historically high levels and account for a six percent share of global FDI flows, amounting to almost USD80bn in 2013.
Highlighting that a growing amount of capital is flowing across borders, the report concluded that IFCs provide investors with essential services that facilitate FDI and that investors continue to find Jersey a particularly attractive center because of the strengths of its financial markets and the quality of the services it offers, as well as the suitability of its vehicles and the stable institutional, tax, and regulatory environment it provides for cross-border transactions.
Geoff Cook said: “This new report provides a timely and objective insight into the role of IFCs in mobilizing investments globally and builds on the findings of last year’s ‘Value to Africa’ report, which identified for the first time the scale of Foreign Direct Investment that the African continent needs to realize its growth potential.”
“As well as evidencing the substantial volume of FDI Jersey is handling and the considerable value that is adding to the global economy, the report also shows clearly that investors find Jersey an attractive center because of the strengths of its financial framework and the quality of the services it offers. This provides an appealing proposition not just for attracting significant inflows of capital but also for distributing that capital efficiently and stimulating economic development in many different countries across the globe.”
