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Ms. Elise Donovan, Director, BVI House Asia, outlined the role of the British Virgin Islands (BVI) and other international financial centers (IFCs) in the global economy, in a speech she delivered at the Malaysian Wealth Management Forum held at the Hilton Kuala Lumpur.
“What is not often understood is the central role played by the BVI and other IFCs in this global economy,” Ms. Donovan said. “Across the globe, these clusters of specialist centres serve the demands of cross-border financial activity. IFCs meet the needs of global businesses, investors, and internationally mobile individuals.”
Ms. Donovan continued: “We live in a world of uncertainty and unpredictability including nuclear threats, terrorism, migration, poverty, hunger, and epidemics. Some are blaming it all on globalization and calling for more protectionism, but let’s take a look at the facts.”
She cited statistics from the recently released report, “Creating Value: BVI’s Global Contribution,” produced by Capital Economics, an independent economics consultancy, which shows that the Asian middle class and the richest one percent have seen their real incomes rise by over 60 percent between 1988 and 2008. This is in stark contrast to the meager gains of the Western middle class during the same period.
“This helps explain why some of the political and social discontent we see today is blamed on globalization, particularly among developed countries in the West,” Ms. Donovan said. However, ”ASEAN leaders have affirmed, and I quote, ‘Globalization is the way to progress.’ In addition, Brazil, Russia, India, China and South Africa – the BRICS nations – would not be what they are today without new markets for their exports.
As stated in the Capital Economics report, BVI companies offer a number of advantages that distinguish them from models offered in other jurisdictions, including cost-effectiveness, flexible incorporation structures, efficient financial reporting requirements, and a register of securities. Over the past three decades BVI companies have mediated investments of US$1.5 trillion, which produced 2.2 million jobs globally and provided net benefits to governments in terms of tax revenues worldwide.
“Wealth planning is the main driver for using offshore finance centres and it is projected to fuel growth of the industry well beyond 2020. And it is not just to reduce taxes, it’s about geographical diversity, high-quality services, political stability, and most importantly, security,” Ms. Donovan said.
BVI House Asia was a lead sponsor of the one-day forum.