“We play on words. “It’s smoke and mirrors”: the Caisse’s $2.5 billion investment in the Jebel Ali free zone criticized

“We play on words. It’s smoke and mirrors,” denounces tax haven expert Franck Jovanovic, who has difficulty seeing how the Caisse can both encourage “best tax practices” and invest US$2.5 billion in the Jebel free zone. Ali.

Last Wednesday, the Caisse de dépôt et placement du Québec published a report in which it reiterates its “commitment to encouraging best tax practices within its portfolio companies, including compliance with a minimum tax rate of 15 %”.

However, the Caisse announced an investment of US$2.5 billion in 2022 to purchase 22% of the port, the Jebel Ali free zone and its industrial park, in the United Arab Emirates (UAE), which seeks to attract foreign investments by offering “0% corporate tax to pay for 50 years”.

Taken from the Jebel Ali website

Asked by The newspaper Last year, the CEO of the Caisse, Charles Emond, retorted that “a free zone is not the same thing as a tax haven”.

However, if experts like Julien Frédéric Martin, professor in the Department of Economic Sciences at ESG-UQAM, tend to agree with the Caisse that a free zone “is not a conduit for avoiding tax” and that “there are the equivalent of these zones in the United States and that they are not considered tax havens”, others do not share this opinion.

“It’s smoke”

This is the case of Franck Jovanovic, professor at the TÉLUQ School of Administration Sciences and expert in tax havens, who believes, on the contrary, that the Caisse is wrong here.

“We play on words. It’s smoke and mirrors. We are running away from the real debate. A free zone is a jurisdiction of convenience through which capital passes. We give advantages to activities that do not take place there,” he analyzes.


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Photo Chantal Poirier

“It’s a jurisdiction offshore. We offer tools to transform the legal characteristics of financial flows,” adds the author of Offshore finance and tax havens.

For Marc Tassé, professor at the Faculty of Law at the University of Ottawa and in the executive MBA program at the Telfer School of Management, questions arise.

“Nothing shows us that it is not legal, but is it ethical?” he wonders out loud.

“What is ethical? This is what is done based on your mission, your values ​​and your declarations,” he notes.


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Ministers and representatives of the Fund have visited the port in recent months.

Taken from LinkedIn

The Fund defends itself

On Wednesday, the Caisse once again defended itself by saying that there are free zones in several countries, including Canada, “to promote international trade and the development of industries linked to logistics.”

Its spokesperson Kate Monfette indicated that “the Jebel Ali free zone is a commercial trade hub (import/export)”.

She said that “the United Arab Emirates has announced its intention to impose a corporate tax of 15%, with a view to aligning with the new OECD provisions [Organisation de coopération et de développement économiques] on tax rates”, and that this would apply to its joint venture with DP World.

“This is commendable from the Caisse, but it has no effect on the application of global taxation,” concluded Jean-Pierre Vidal, full professor in the Department of Accounting Sciences at HEC Montréal, in taking a step back.

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