Discovering the UK Overseas Territories – Trade
The Overseas Territories are world leaders in a range of sectors: from insurance, gaming, finance, law and tourism to the export of high-quality lobster and squid. The majority of Overseas Territories are financially self-reliant, with increasing wealth being devoted to environmental protection, education and health care.
The trading partnership between the UK and the Overseas Territories was worth approximately £15.5 billion in 2022.
Bermuda was the UK’s 53rd largest trading partner in the four quarters to the end of Q3 2022 accounting for 0.2% of total UK trade, with total trade in goods and services between the UK and Bermuda amounting to £3.9 billion in this time.
The financial services industry accounts for 85% of Bermuda’s GDP, and makes the island one of the world’s leading International Financial Centres. Bermuda plays a unique and essential role in the global economy, providing re-insurance services to markets around the world and reducing risk and the cost of capital in both developed and developing economies. Members of the Association of Bermuda Insurers and Reinsurers (ABIR) also provide 35% of terrorism reinsurance capacity to the UK, and supply nearly half (£314.9 billion) of the capacity for Lloyds of London, representing 42% of Lloyds syndicate. Furthermore, Bermuda has robust economic substance laws, which aim to ensure that they do not facilitate the use of structures that attract profits but do not reflect real economic activity being undertaken in Bermuda.
As a well-regulated, international financial centre with world-class infrastructure and political stability, the Cayman Islands has the ideal environment in which business can flourish. The Cayman Islands continues to maintain its dominant position as a leading global financial hub, efficiently connecting law abiding users with providers of investment capital and financing worldwide, benefiting both developed and developing countries. The tight regulatory framework ensures that the jurisdiction remains aligned with international standards and expectations.
The Cayman Islands has a strong, long standing record of excellence with respect to anti money laundering and countering the financing of terrorism. For more than two decades, they have collected beneficial ownership on a verified basis and have had a central register of beneficial ownership information since 2017, with a 24-hour response time to requests for information from law enforcement.
The Cayman Islands Government is committed to the development of progressive policy and transparent business practices in a manner that is growth-driven and forward-looking while upholding global responsibilities. With a historical record of early adoption, they believe that Cayman’s bold approach of being at the forefront of cooperation with relevant international standards and industry best practices is not only beneficial for the Cayman Islands economy but good for the global economy as well. The Cayman Islands Government proactively works to ensure that the Cayman Islands remains at the fore of international regulatory initiatives, cementing their position as a leading international financial centre.
The British Virgin Islands (BVI) punches well above its weight with a strong and balanced economy, sound public finances, and a world-class cluster of specialist finance, law, and business services firms. The Islands are home to a globally respected, unique international business and finance centre which generates US$469 million of gross value added for the domestic economy and accounts for two-thirds of all government revenues. The BVI are an attractive location in which to conduct cross-border investment and trade thanks to its robust legal framework, its regulation and compliance in line with international directives, and its cohesive and cost-effective administration. The international business and finance centre support substantial global flows of investment that support jobs throughout the world. The international business and finance centre is well-positioned to serve new and developing digital asset and sustainable finance markets. The total addressable market of digital assets is expected to be worth between US$8 trillion and US$13 trillion by 2030, while the value of the global sustainable fund market could be near 50 times greater by the end of the decade.
The BVI Business Company is a widely used, respected and dependable legal vehicle to facilitate cross-border trade and investment. There are currently just over 375,000 active BVI Business Companies holding assets with a combined estimated value of US$1.4 trillion. Like other Overseas Territories in the region, the BVI is a constructive, responsive, and innovative jurisdiction that supports growth across the world and helps to resolve challenges facing the global economy. Investment mediated by BVI Business Companies supports around 2.3 million jobs globally and generates an estimated US$14 billion each year in taxes for governments worldwide. Investment activity mediated by the BVI sustains significant economic growth. We estimate that assets held in BVI Business Companies are equivalent to 1.5% of annual global gross domestic product and 4% of all sectors’ total cross-border banking liabilities. More than two million jobs worldwide are supported by the mediated assets, contributing over US$14 billion a year to public sector revenues.
Financial services, specifically insurance and banking, is a key element of the economy of Gibraltar; but the most important economic sector on the Rock is Tourism, with 12 million tourists visiting each year. Tourism is a significant contributor to most Overseas Territories, particularly cruise ship tourism. In 2019 over 70,000 cruise ship tourists visited the Falkland Islands, and South Georgia has an average of 15,000 cruise ship tourists annually.
Total UK Imports from Gibraltar amounted to £2 billion in the last 12 months and 30% of all motor insurance in the UK is underwritten by brokers in Gibraltar.
Food and drink are also a major export, particularly for Overseas Territories in the South Atlantic. Tristan Rock Lobster, for example, is in demand as a premium product in Tokyo, Paris and Hawaii. Squid and wider fisheries exports make up about 60% of the GDP of the Falkland Islands.
Did you know that a third of all the squid imported by Europe actually comes from the Falkland Islands?
Saint Helena coffee is one of the most highly-valued coffees in the world. The green-tipped bourbon Arabica strain has remained free from cross-breeding since its importation in the 1700s, it is currently sold in Fortnum & Mason in the UK. In the Pacific, the Pitcairn Islands are famous for the purity of their honey.
Quiz answer: A. South Georgia & the South Sandwich Islands
Bermuda Financial Services
Cruise Ship and Gentoo Penguins in British Antarctic Territory
(Photo Credit: Polar Regions Department, FCDO)
Tourism in the Cayman Islands
(Photo Credit: Cayman Islands Department of Tourism)