BVI holding companies boosting foreign investment to Hong Kong in the Q2-2006

I have already mentioned that the British Virgin Islands keep the 2nd largest foreign investor's position in China, the first one being Hong Kong - Special Administrative Region of the China. The 2nd quarter GDP and foreign investment data released yesterday by Hong Kong Census & Statistics Department, confirmed the similar situation in Hong Kong where the BVI has leading status among foreign investors.

According to the information provided, the direct investment income in Hong Kong grew 10.6%, compared to the same period last year.

Foreign investment share from the BVI is at impressive 18% placing it at the top of the investors' list. The British Virgin Islands provide continued inflow of direct investments into Hong Kong economy due to the large number of BVI holding companies which have been established in the BVI by Hong Kong residents. Other major investors are the US and UK at 10.1% and 6.9%, far behind BVI.

Above the level of BVI investments there are only investments received from Chinese companies and accounted for 31.4% of the total amount. As far as Hong Kong retains its status of Special Administrative Region of China, the Mainland is at all times the major source of Hong Kong's external factor income inflow.

Hong Kong GNP increased to $340.7 billion in the second quarter of this year, that means up 1.4% compared to the same period last year. The GDP increased even more and made $348.3 billion, up 5.1%.