Wealth Offshore: Indians leave Swiss Banks for Asian countries

Indians seem to prefer Asian tax havens and not Switzerland, according to the bilateral foreign holdings data released by the Bank of International Settlements (BIS), says an article in the Times of India.

Switzerland has always been infamous for storing most of the black money which is generated by evading tax. However, data suggests otherwise. About 53 percent of the offshore Indian wealth is kept in places within Asia such as Hong Kong, Macau, Singapore, Bahrain and Malaysia and only 31 percent of the Indians have their wealth stored in Swiss banks.

The wealth stored outside India rose to USD 62.9 billion in 2015, which is 90 percent more since 2007. The amount stated in the data is about 3.1 percent of India's GDP in 2015.

This was released for the first time by BIS. Until last year, the body had tracked the data on the international financial activities but did not disclose the country of origin. The data does not include non-financial assets like real estate.

Total offshore wealth in the world was $8.6 trillion, which is about 11.6% of world GDP. This data was estimated by the economist Gabriel Zucman of UCLA and his colleagues of the Norwegian University of Life Sciences and Niels Johannesen of the University of Copenhagen. However, data related to non-financial assets such as art or real estate is not included in these figures.

The plausible reasons for people to turn towards Singapore and Hong Kong could be because the offshore wealth in Switzerland has become more transparent than before and the Panama Papers leaks which exposed other tax havens.

"Among countries with a large stock of offshore assets, one finds autocracies (Saudi Arabia and Russia), countries with a recent history of autocratic rule (Argentina and Greece), alongside old democracies (United Kingdom and France). Among those with the lowest stock of offshore assets, one finds relatively low-tax countries (Korea and Japan) alongside the world's highest tax countries (Denmark, Norway)," Zucman was quoted.