Top Sectors in Falkland Islands (Malvinas)

Banking in Falkland Islands (Malvinas)

The Falkland Islands do not have a central bank but the Standard Chartered Bank has a single branch in Stanley that offers retail, commercial and wholesale banking facilities.

Agriculture in Falkland Islands (Malvinas)

Farmland accounts for a little over 80% of the Falklands land area and a sheep appears on the islands' coat of arms, but agriculture is now less than 2% of the economy. As of 2007, 670,000 sheep resided on the islands; a 2011 report estimated the sheep population at over one million. Roughly 40% of the national flock are on West Falkland and 60% on East Falkland. The base flock are Corriedale and Polwarth breeds with Dohne Merino, South African Meat Merinos, Afrinos and other breeds having been introduced to improve the fineness of wool and meat characteristics. The wool price suffered a slump in 2005/6 and a peak in 2008. Since 2003 the relative premium commanded by higher quality wool has increased with coarser wool missing out on the high prices in 2008.<br>Although the production of wool is spread across the islands, the breeding of animals for slaughter is concentrated on East Falkland where the EU accredited Send Bay abattoir is situated. An additional cost borne by producers on West Falklands is the fare charged for crossing the Falklands Sound. As of 2010, the ferry company making the crossing charged commercial vehicles Â£30 per metre for a single trip plus Â£2 per head of sheep. Wool on the other hand is charged "Â£45 per tonne delivered to Stanley

Fishing in Falkland Islands (Malvinas)

Fishing is the largest part of the economy. Although Lord Shackleton's Report (1982) recommended the setting up of a 200-nautical-mile (370 km; 230 mi) fisheries limit which gave an impetus to the fishing industry, the report did not go into much detail regarding the expansion of the industry. The Falkland Islands Development Corporation which formed as a result of the Shackleton Report provided the impetus for the Falkland Islands to exploit their marine environment.

Tourism in Falkland Islands (Malvinas)

Tourism is the second-largest part of the economy. In 1982, an average of only 500 tourists visited the Falklands per annum but by 2007, this figure had grown to 55,000 and the Falkland Islands Tourist Board hired its first tourism director that year. In 2010, the transport and hospitality sector was expected to contribute Â£7.8 million or 7.7% of the island's GDP. Tourism forms a significant part of this figure with land-based visitors expected to contribute Â£2.7 million to the Islands' economy in 2010. The islands have become a regular port of call for the growing market of cruise ships to Antarctica and elsewhere in the South Atlantic. Attractions include the scenery and wildlife conservation including 1,000,000 penguins, seabirds, seals, and sea lions, as well as visits to battlefields, golf, fishing and wreck diving. In addition to accommodation in Stanley, there are tourist lodges at Port Howard, Darwin, Pebble Island, Carcass Island, and Sea Lion Island. Self-catering accommodation at holiday cottages on island farms the total contribution of tourism to the Islands' is expected to reach Â£5.4 million in 2010.

Falkland Islands (Malvinas) - Key Economic Indicators

Exports and Imports

The Falkland Islands primarily export fish and wool, with fishing being the largest sector of the economy. Wool production also contributes significantly to exports. Imports mainly consist of foodstuffs, fuel, machinery, and manufactured goods. The exact figures for exports and imports fluctuate annually but generally reflect the islands' reliance on fishing and agricultural products for export, while necessitating imports for daily consumption and infrastructure development.

Infrastructure

Infrastructure in the Falkland Islands is relatively basic but crucial for supporting economic activities. The road network spans approximately 440 kilometers, with most roads unpaved. Stanley, the capital, has the most developed infrastructure, including a port and an airport (RAF Mount Pleasant) that serves as a hub for both civilian and military flights. There have been ongoing efforts to improve road conditions and expand telecommunications to enhance connectivity across the islands.

Balance of Trade

The Falkland Islands typically maintain a trade surplus due to their exports of fish and wool. While exact annual figures vary, the islands benefit from the value of their fisheries and agricultural products in international markets. This surplus helps offset the costs of imports, including necessary goods and services not produced locally, thus supporting the islands' economic stability and development.

Fiscal Policy

Fiscal policy in the Falkland Islands focuses on prudent management of public finances and sustainable economic growth. Government spending is primarily directed towards essential services, infrastructure development, education, and healthcare. Taxation plays a crucial role in revenue generation, with various taxes imposed on income, property, and goods. The government aims to maintain a balanced budget and manage debt responsibly to support long-term economic stability.

Monetary Policy

Monetary policy in the Falkland Islands is influenced by the British Pound Sterling (GBP), which serves as the official currency. The islands do not have an independent central bank; instead, monetary policy decisions are largely coordinated with the UK's monetary policy set by the Bank of England. This arrangement ensures currency stability and financial oversight aligned with broader UK economic objectives.

Trade Agreements

The Falkland Islands benefit from trade agreements facilitated through the United Kingdom, including agreements within the European Union framework (prior to Brexit). These agreements provide preferential access to European markets for Falkland Islands exports, particularly fish products and wool. The islands also participate in regional fisheries agreements that regulate fishing activities in their waters, supporting sustainable fishing practices and international trade relations.

Environmental Regulations

Environmental conservation is a significant focus in the Falkland Islands due to their rich biodiversity and sensitive ecosystems. The government has implemented strict regulations to protect marine and terrestrial environments, including sustainable fishing practices and wildlife conservation measures. Environmental impact assessments are required for development projects, ensuring that economic activities are conducted in an environmentally responsible manner. Renewable energy initiatives, such as wind and solar power, are also being explored to reduce dependence on imported fuels and mitigate environmental impacts.

Tax System in Falkland Islands (Malvinas)

Capital Gains Tax: The Falkland Islands do not impose a specific capital gains tax on profits from investments. Capital gains are generally not subject to separate taxation but may be considered as part of income tax calculations.
Corporate Tax Rate: The corporate tax rate in the Falkland Islands is 26%. This rate applies to the profits earned by businesses operating within the territory. The government may provide certain incentives or deductions to promote economic activities, although specific details on these incentives may vary.
Sales Tax: The Falkland Islands do not currently impose a general sales tax (Value Added Tax or VAT) on goods and services. However, certain specific duties and charges may apply to imported goods and alcohol.
Property Tax: Property tax in the Falkland Islands is levied on real estate based on the assessed value of the property. Rates vary depending on the location and type of property, with the revenue collected contributing to local government funding and services.
Payroll Tax: There is no separate payroll tax in the Falkland Islands. Social security contributions are deducted from employees' wages to fund pension and other social security benefits. Employers also contribute to these funds based on employees' earnings.
Tax Deductions and Credits: The Falkland Islands offer various tax deductions and credits to reduce the tax liability of individuals and businesses. These incentives may include deductions for business expenses, charitable donations, and certain investments. Tax credits may be available for activities that contribute to local economic development or environmental conservation efforts.
Tax Compliance: Tax compliance in the Falkland Islands is generally efficient, supported by modern administrative systems and procedures. The Falkland Islands Government (FIG) Revenue Service oversees tax collection and enforcement, ensuring that taxpayers meet their obligations promptly and accurately. Compliance rates are typically high due to the small, tightly regulated economy.Tax Burden: The overall tax burden in the Falkland Islands is moderate compared to larger jurisdictions, reflecting the limited scope of direct taxation and the reliance on indirect revenue sources like customs duties and fees. Tax revenue contributes to funding essential public services, infrastructure projects, and social welfare programs, ensuring the islands' economic sustainability and development.

Economy of Falkland Islands (Malvinas)