Crown Dependencies Still Going Strong
BEPS may be changing the international tax landscape irrevocably – whether for better or worse being a matter of intense debate – but the allure of offshore and low-tax financial centers remains as strong as ever. For example, the little island of Guernsey, which at just 78 square kilometers in area is over half the size of Washington DC, is now home to more non-UK entities listed on the London Stock Exchange than any other jurisdiction globally. In fact, the UK Crown Dependencies (Guernsey, Jersey, and the Isle of Man) all play a hugely important role in funneling investment into the capital markets of London, and the wider economy of the UK. One-third of the Chinese companies listed on London’s Alternative Investment Market (AIM) were incorporated in Jersey in 2014, up from one-quarter prior to 2008. LSE data also shows that, at the end of December 2014, there were 54 Isle of Man-incorporated companies listed on AIM, putting the island in third place behind Guernsey and Jersey.
A recent study by Capital Economics found that Jersey alone channels approximately GBP118bn (USD170bn) of investment into the UK every year. The UK Government, an eager participant in the BEPS project, might therefore want to think very carefully before doing anything that might shut off this supply line of finance.
For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look