By Andrei Skvarsky.
A “unique” relationship to the United Kingdom makes Guernsey, a UK dependency and an international financial centre, an effective channel for foreign direct investment (FDI) into the UK, which is “ever more vital” for its economy but declining, according to a Guernsey-based financier.
Guernsey “channels investment into the UK that other international finance centres wouldn’t be able to do”, Rupert Pleasant, chief executive of Guernsey Finance, a financial centre promotion group, says in an article.
This is down to the nature of geographical, historical and cultural ties between Guernsey and the UK and overlaps between their regulatory frameworks, he argues.
Guernsey-based funds currently hold investments in the UK worth 57bn British pounds ($71.4bn), according to a report by the Frontier Economics consultancy cited by Pleasant.
But according to a British Parliament report, which is also cited by Pleasant, FDI into the UK has been dwindling year by year after peaking in 2016.
The UK is facing “stiff competition” as an FDI recipient “from the likes of countries including the US, France, Ireland and Singapore”, Pleasant says in his article, published in the Financial Times.
Pleasant cites a UK Department for International Trade estimate that an amount of foreign capital worth one million pounds ($1.25m) that is put into the UK economy produces a net increase of 98,000 pounds ($122,750) in national levels of gross value added (GVA).
Among other things there are good facilities in Guernsey for sustainable investing., according to Pleasant, who points out the Guernsey Green Fund.
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