As published on world.kbs.co.kr, Tuesday 16 August, 2022.
The Cayman Islands, a popular tax haven, was responsible for the second-largest amount of foreign direct investment(FDI) in South Korea after the United States during the first half of this year.
According to the Ministry of Trade, Industry and Energy on Tuesday, FDI into the country stood at nearly eleven-point-09 billion dollars in the January-to-June period, of which two-point-95 billion came from the U.S.
Just over one-point-55 billion dollars, or 13-point-nine percent of the total, came from Cayman Islands in the western Caribbean Sea. Singapore came third with one-point-39 billion dollars and Japan at 893 million dollars.
The Central American country of Guatemala, the Mediterranean country of Malta and the Virgin Islands in the Carribbean also ranked among the top ten in investment volume.
While possessing small trade relations with South Korea, the Cayman Islands, Guatemala, Malta and the Virgin Islands are tax havens that impose very low or no income, corporate and inheritance taxes, with few corporate regulations.
Although a ministry official said most of the funds coming into the country through such tax havens are for mergers and acquisitions, there are concerns that some of the money is being sent through paper companies for the purpose of tax evasion.