NEW DELHI:Investment made by individuals or other entities may not have broken the law or acted improperly to hide details, details of investments made in famous tax haven countries or countries with little to offer besides registration of mail box entities are indeed intriguing.
For example, total investment to Switzerland in 2012-2013 was $513.82 million (Rs 3,269 crore). Known as Mecca of black money, the country witnessed another $414 (Rs 2,638 crore) million investment from India in 2013-14. Similarly, $138.9 million (Rs 879 crore) was moved as investment to Bermuda, whose economy is based on offshore insurance, registration of mailbox companies and tourism. This offshore financial centre with no corporate income tax is considered to be a popular tax avoidance location for multi-national companies. The highest capital investment by Indians in 2012-13 was made in Mauritius. $1,763 million (Rs 11,234 crore) was invested while $1,294 million (Rs 8,246 crore) was moved in 2013-14. In the current fiscal, $580 million (Rs 3,696 crore) has been invested in the country, known to be providing the safest route to wire ill-gotten proceeds. Mauritius popped up in several past scams, including VVIP choppers, Aircel-Maxis and Antrix-Devas. Singapore witnessed huge and steady investments by Indians. Since 2012-13, $4,818 million (Rs 30,703 crore) has been invested by Indians in Singapore.
Netherlands appears to be the favourite destination of the Indian biz community. While $1,050.67 million (Rs 6,691 crore) was invested in 2012-13, a whopping $1,778.33 million (Rs 11,330 crore) capital investment was made in 2013-14. In the current fiscal, $723.32 million (Rs 4,607 crore) investment has already been made. Another surprise destination for huge capital investment is the Bahamas, where $54.67 million was invested in 2012-13 followed by $17.1 million in 2013-14 and $32.76 in 2014-15. Southeast African country, Mozambique which in 2012 discovered large natural gas reserve, witnessed a sudden investment of $2,643 million (Rs 16, 842 crore) in 2013-14. In 2012-13, the total investment was only $0.47 million. After a sudden spurt in investment in 2013-14, there was sharp decline in the current fiscal: only $3.68 million. British Virgin Islands, which earns its 60 per cent revenue by registration of covert entities, has nothing substantial to offer to the Richie Rich looking to invest. With an export revenue of an average $40 million and imports worth $400 million, the country has tourism as the main business besides providing mailbox companies to shadowy operators.
The finance ministry said that on March 5, 2013, resident individuals were permitted to undertake ODI in the equity of overseas joint ventures/wholly owned subsidiaries under the automatic route within the overall ceiling under Liberalized Remittance Scheme (LRS) subject to the compliance with certain conditions. The ceiling was increased from $75,000 to $125,000 per financial year per head for any permitted capital or current account transaction or a combination of both through a notification on June 3, 2014.
In June-July 2014, The International Consortium of Investigative Journalists revealed a list of covert firms using complex offshore structures in the British Virgin Islands and other offshore hideaways famous for providing shelters to money-launderers. It disclosed names of 665 Indian businessmen and entities registered in these tax havens. The leak raised suspicions on investment in a country with a labour force of just 12,000 people. It also raises questions whether these entities were registered as a front to park black money in offshore accounts.