IMF's 'Phantom FDI' destinations and the India connection

IMF study says investments in empty corporate shells in these nations by companies' hints at tax evasion

In a recently released paper, the International Monetary Fund (IMF) has drawn the world’s attention to the rising menace of ‘Phantom foreign direct investment (FDI)’, defined as investment flows that pass through empty corporate shells that have no real business activity, with the intention to avoid paying taxes in their host countries. IMF’s paper states that just two tax havens – Luxembourg and the Netherlands – host more than half of the world’s $15 trillion phantom FDI. Global FDI is estimated to be around $40 trillion in 2017. 

The paper states, “Interestingly, a few well-known tax havens host the vast