Over a third of foreign investment is multinationals cutting their tax bills

Here are news that travel the world these days: Nearly 40 per cent of worldwide FDI — worth a total of US$15tn — "passes through empty corporate shells" with "no real business activities", the study by the IMF and the University of Copenhagen found.

Instead, they are a vehicle for financial engineering, "often to minimise multinationals' global tax bill", said researchers Jannick Damgaard, Thomas Elkjaer, and Niels Johannesen, who carried out the study.

The Rise of Phantom Investments. FINANCE & DEVELOPMENT, SEPTEMBER 2019, VOL. 56, NO. 3

Financial Times brings the story on the front page in their hard copy paper and electronically behind paywall. We give you a sneak peek of our FT reading this morning:

Read more about the results at the IMF webpage.