Inbound FDI from tax havens shoot up in FY18

Equity investments from Cayman Islands rise by 1600%, even as inflows from traditional sources fall

Foreign direct investment (FDI) from nations widely regarded as tax havens such as Cayman Islands and Hong Kong jumped in 2017-18, even as overall India-bound investments showed a slower rise, year-on-year (YoY).

Latest government statistics provided by the commerce and industry ministry to Parliament show that the majority of nations from which equity inflows rose at the fastest pace have a curious similarity. They are all small-sized tax jurisdictions with low corporate tax rates preferred by major corporations and individuals alike to park their earnings. 

These include the sunny Cayman Islands and Bahamas, as well as European principalities such as Liechtenstein and