Foreign direct investment (FDI) is supposed to stimulate productivity and growth in other countries by transferring skills, technology and capital. But a large percentage of the world's total FDI isn't doing that, according to a study by the International Monetary Fund and the University of Copenhagen. Around $15trn, or 40% of the global total, is "phantom" investment, with money coming in, but not stimulating business activity. Multinational companies are channelling cash through "empty corporate shells" in other jurisdictions to minimise their tax bill. Luxembourg and the Netherlands account for half the phantom FDI. In Malta, Ireland and Switzerland less than 50% of FDI is real.
Viewpoint
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Inheritance tax home loan scheme beats HMRC but lawyers warn of the risksSchemes widely sold to the middle classes in the early 2000s to avoid inheritance tax are now finding their way to the courts as the tax office disputes their legality
-
How high earners could boost their pension by thousands and cut childcare costsSalary sacrifice could boost your pension by thousands, while also helping you save on childcare costs. We delve into the numbers.
-
The charts that matter: bond yields and US dollar continue to climbCharts The US dollar and government bond yields around the world continued to climb. Here’s what happened to the charts that matter most to the global economy.
-
The charts that matter: markets start the year with a crashCharts As markets start 2022 with a big selloff, here’s what happened to the charts that matter most to the global economy.
-
The charts that matter: Fed becomes more hawkishCharts Gold rose meanwhile the US dollar fell after a key Fed meeting. Here’s what else happened to the charts that matter most to the global economy.
-
The charts that matter: a tough week for bitcoinCharts Cryptocurrency bitcoin slid by some 20% this week. Here’s what else happened to the charts that matter most to the global economy.
-
The charts that matter: omicron rattles marketsCharts Markets were rattled by the emergence of a new strain of Covid-19. Here’s how it has affected the charts that matter most to the global economy.
-
The charts that matter: the US dollar keeps on strengtheningCharts The US dollar saw further rises this week as gold and cryptocurrencies sold off. Here’s how that has affected the charts that matter most to the global economy.
-
The charts that matter: gold hangs on to gains while the dollar continues higherCharts The gold price continued to hang on to last week’s gains, even as the US dollar powered higher this week. Here’s how that has affected the charts that matter most to the global economy.
-
The charts that matter: inflation fears give gold a much needed boostCharts US inflation hit its highest in 30 years this week, driving gold and bitcoin to new highs. Here’s how that has affected the charts that matter most to the global economy.
