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Jersey Outlines Plans To Target BRIC Economies

by Jason Gorringe, Tax-News.com, London

27 September 2012


Speaking at a recent conference, Jersey's Chief Minister, Ian Gorst outlined the government's strategy for targeting investment from Brazil, Russia, India and China, collectively known as the 'BRIC' countries.

Gorst highlighted that the BRIC economies have become a markedly more important market for Jersey in recent years, and consequently the island's promotional efforts have been targeted at securing increased market share in these regions.

He noted that from 2000 to 2008, the BRIC countries' combined share of total world economic output rose from 16% to 22%, and these four nations accounted for 30% of the increase in global output during the period. In addition, expenditure by these nations in research and development activities doubled from 2002 through 2007, which combined with increases domestic wealth, has opened up new opportunities for the island's financial services industry amid lacklustre growth in Europe.

A recent London Business School report, entitled “The Future of Finance 2015” summarized the position stating: “London continues to remain the most important strategic relationship for Jersey - however, markets in the Far East, Middle East, and South East Asia will play a much more prominent role than today in Jersey’s future growth and success”.

Outlining government efforts to target the BRIC countries to date, Gorst said measures had been focused on three areas:

"We have effected a step change in international relations in recent years, with a particular emphasis on emerging markets. We have signed tax information exchange agreements with 29 nations, and we have an expanding list of double taxation agreements, most notably with Hong Kong, China. This activity has been complemented by an increase in diplomatic visits to China and India. In the UK, the Assistant Chief Minister with responsibility for International Affairs, Philip Bailhache is in regular dialogue with Ambassadors to the Court of St. James to increase their understanding of Jersey, in particular of our financial services sector. In many cases, including Russia and China, this contact has resulted in a visit by ambassadors to Jersey."

"We have bolstered our resources by appointing a Jersey-based Director of International Finance - a single point of responsibility within government for our most important sector. One of the tasks I will be asking the new director to undertake is the coordination of the process of developing new laws. I say this because I have no doubt that, as we seek to increase market share in the BRICs, we will need to respond quickly with new products, some of which may require legislation before they can be brought to market. I see no reason why the pace of legislation cannot support “early mover advantage” in new markets and I am determined that all parts of government that can improve performance in this area, play their part."

"Through the Medium-Term Financial Plan, which will be debated by the States at the end of the year, we are proposing to increase the resources available to Jersey Finance - the promotional agency for the island's financial services industry, from GBP2.7m (USD4.4m) in 2012 to GBP4.6m by 2015. This additional investment will fund increased levels of promotional and inward investment activity in traditional and emerging markets, with the emphasis on the latter."

"Our existing offices in India, Hong Kong, China and the GCC will see higher levels of activity and expenditure," he said, announcing also that new offices are to be opened in South America and the Middle East. "This investment is vital if we are to realise the potential of the BRICs to Jersey. Increasing investment in promoting this key sector will help diversify and stimulate our economy and create employment opportunities for Jersey residents."

In his concluding remarks, he stated: "We are building on our strengths and will pursue opportunities to foster success in existing businesses and attract more financial services institutions to the island. We must do this if we are to inspire confidence in Jersey’s future through a strong and sustainable economy, and government will do everything in its power to ensure we succeed."

TAGS: Russia | Finance | tax | investment | business | India | banking | international financial centres (IFC) | China | Jersey | offshore | agreements | offshore banking | Brazil | Hong Kong | services | research and development

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