Friday, March 24, 2006

The British Virgin Islands impact on Hong Kong's gross national product

According to the Census & Statistics Department, Hong Kong's gross national product in the 4th quarter (2005) stood at $369.4 billion, which is 4.2% up as compared with a year earlier.

In the 4th quarter, the Mainland, accounting for 28.5%, remained the largest source of Hong Kong's external factor income inflow. The BVI followed, reflecting continued investment income inflow from this tax haven economy, at 20.1%. Should be noted that Hong Kong companies had set up really a considerable number of holding companies in the BVI. The US and the UK were other major source jurisdictions at only 10.5% and 7.5%.

The Mainland and the British Virgin Islands, accounting for 23.5% and 18.5% of the total outflow, continued to be the most important destinations for Hong Kong's external factor income outflow in the 4th quarter. Other major destinations were the Netherlands at 8.7% and the US at 8.2%.

It’s hard to neglect the effect of offshore business registered in the BVI on Hong Kong economy as well.

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