A Study On Offshore Tax Havens' FDI In China

According to the FDI statistics published by the National Bureau of Statistics of China, as offshore financial centers, several tax havens, represented by BVI, Cayman Islands and Samoa, have become very important FDI mother countries of China. On the one hand, due to the tax preferential policies and information exposure system, offshore tax havens are attracting more and more investors from all over the world. On the other hand, since our country's reform and opening-up policy, we have adopted a series of tax preferential policies to attract foreign capitals. Therefore, lots of investors from home and abroad registered offshore companies in offshore tax havens and made investments in China, which increased the total FDI volume from offshore tax havens.However, because strict secrecy and privacy are one of the great features for offshore incorporations, it is very difficult for us to acquire the real information of offshore companies, which leads to a series of problems. This paper collects the recent statistics of FDI from offshore tax havens, analyzes the reasons why FDI from tax havens increases and its impacts on China's economic, and put forward some policy proposals.This paper consists of five chapters. Chapter one includes a brief summary about the research background and status quo information and an explanation of the outline of this paper.Chapter two begins with an introduction of the theories of offshore financial centers, including the definition, classification, characteristics and its impacts on the world economy, based on which a further explanation about offshore tax haven is given. At last, this chapter reviews the current status of five offshore tax havens, including BVI, Cayman Islands, Samoa, Mauritius, and Bermuda, which are the main FDI mother countries of China.Chapter three and Chapter four are the most important part of this paper. Chapter three is structured as follows: a summary of the status of FDI from offshore tax havens is given in Section one; an analysis of the reasons why investors from home and abroad register offshore companies in offshore tax havens and make investment in China is given in Section two; an analysis of its positive and negative influences on China's Economy is presented in Section three. At last, in order to make our foreign investment policy more effective, some relative policy proposals are put forward in Chapter four.