The budget approved by the House of Assembly by the end of the budget process was US$302,306,000, while previously it had been US$301, 746,000, being announced in January by the British Virgin Islands Premier and Minister of Finance, Hon. Dr. Orlando Smith. Projected taxes, as part of revenue, make US$282,659,000, and other fees are planned to account US$19,091,000.
Also, for 2014 the presented operating expenditure was US$248,349,500, US$180,730,100 of them for wages and salaries. BVI Government is also planning to place some US$15.5 million into the Reserve Fund.
According to the approved expenditure by the House of Assembly, the BVI Government committed to undertake US$26,986,000 in capital works disbursed as the Deputy Governor, US$215,000; Premier, US$800,000; Ministry of Finance, US$200,000; Ministry of Natural Resources and Labour, US$4,150,000; Ministry of Education and Culture, US$3,300,000; Ministry of Health and Social Development, US$4,375,000; and Ministry of Communications and Works, US$11,350,000.
Saturday, March 08, 2014
Friday, February 28, 2014
In the beginning of this week, the British Virgin Islands Financial Services Commission published the thirty-third volume of Quarterly Statistical Bulletin, providing information on financial services industry in the jurisdiction during the last quarter of 2013. According to the statistics of incorporations and registrations, 11,376 new companies (as compared to 12,809 in the third quarter of 2013 and 14,783 in the fourth quarter of the previous year), as well as 24 limited partnerships and 48 private trust companies were registered in this period. Cumulative number of business companies in BVI as at 31 December 2013 was 459,882.
According to the bar graph included in the Statistical Bulletin and reflecting dynamics of business company incorporations in the jurisdiction during the years 2009-2013, there is a decline in the number of new companies in 2013, especially as compared to the years 2011 and 2012, when the peak amount of incorporations could be observed. In 2013, the number of newly incorporated companies is still higher than in 2009.
By the Banking and Fiduciary Services statistics, four entities were licensed in the fourth quarter of 2013, and total number of licensed entities achieved 235 as at 31 December 2013. In Investment Business, 43 new licenses were granted in the reported period, of which 33 were issued to professional mutual funds, and 8 were investment business licenses. Four licenses were granted in Insurance industry sector.
In the sphere of Legal and Enforcement and International Cooperation, there were 16 international cooperation matters with formal requests, requiring the disclosure of non-public information, and 35 enforcement matters. Also, in the fourth quarter of 2013, 132 ongoing supervision matters were registered in Banking and Fiduciary Services sector, 161 in Investment Business, and 32 in Insurance.
Further information, statistics and analysis of BVI financial services industry in Q4 2013 can be found on the home page of the Commission.
Monday, February 17, 2014
Last week, a bill was introduced in the British Virgin Islands House of Assembly named The Computer Misuse and Cybercrime Act. This legislation document provides for fines of up to US$1 million or prison sentences of up to 20 years for individuals that illegally leak confidential information, and sentences of up to 15 years and/or fines of US$500,000 for anyone publishing such data, and applies to any person of any nationality. Actually, the law followed the global leak of information in the last year, published by the International Consortium of Investigative Journalists (ICIJ), and revealing private information on BVI companies contained in the secret files.
According to the survey of the industry, conducted by Offshore Incorporations Limited, the ICIJ’s reports had caused a “crisis of confidence” in the offshore industry and decline in offshore company incorporations, and particularly in the British Virgin Islands jurisdiction. Most offshore professionals stated that the disclosures have reduced demand for offshore financial vehicles or, in other cases, prompted clients to move their business from one financial centre to another.
Press freedom manager of the International Press Institute (IPI) Barbara Trionfi said that "It is vital that the House of Assembly amend the Computer Misuse and Cybercrime Bill to include a clear exception for information in the public interest, as journalists must be free to report on issues that affect democratic accountability." She added: "We are also concerned that the disproportionately harsh punishments foreseen by this bill, as well as a lack of specificity as to which information is protected, will contribute to a dangerous chilling effect on the media."
Thursday, February 06, 2014
According to the survey conducted by the United Nations, the British Virgin Islands has been at the top of countries for foreign direct investments in the past five years. Last year, it received US$92 billion of foreign investment – more than the growing economies of Brazil and India together, with US$63 billion and US$28 billion respectively. Thus, the BVI became the fourth biggest investment destination in the world, in this ranking it follows the United States with US$159 billion, China with US$127 billion, and Russia, with just US$2 billion more than the British Virgin Islands.
The annual inflow of foreign investment of the jurisdiction in 2013 was 40% higher than last year, and continues a trend that took off after the economic crisis. However, governments are trying to tighten up their tax regulatory framework both at the national and international level.
While for most countries, foreign direct investment consists of companies spending on corporate acquisitions and new overseas projects, for the BVI jurisdiction most of investment money goes quickly in and out of the country or cash moved through the treasury accounts of large companies, which UNCTAD defines as "transnational corporations".
Monday, January 27, 2014
During the visit of the delegation from Qianhai Special Economic Zone and officials of the municipality of Shenzhen, there were signed memoranda of understanding (MoUs) to signal the beginning of the mutual relationship between the jurisdictions. The MoU signed between the British Virgin Islands government and the City of Shenzhen sets out the parties’ intentions to further increase bilateral cultural exchanges, to expand exchange and cooperation in areas of tourism, economy, culture, sports and other areas. The Memorandum signed between the BVI government and the Qianhai Authority sets out parties’ intentions to promote exchange and cooperation in the sphere of financial industry.
According to BVI Premier Orlando Smith, “This is a historic occasion, in that while we have had visits from Chinese delegations in the past, this is the first time that we are having such a significant delegation to forge a closer relationship.” Also, speaking about the establishment of BVI House Asia in September 2013, Smith noted that a major component of his government’s strategy is to expand and deepen the commercial footprint of the territory in Asia as one of the most important global markets.
The member of the Standing Committee of the CPC Guangdong Provincial Committee and party chief of the CPC Shenzhen Municipal Committee, Dr Wang Rong said about the opening of BVI House Asia: “We warmly welcome BVI companies and institutions to strengthen overall and multi-layered cooperation with Shenzhen in various fields, and to share development opportunities with us for a better future.”
Monday, January 20, 2014
The Premier of the British Virgin Islands, Dr Orlando Smith, was speaking on the economy of the jurisdiction, during the 2014 Budget Address last week. He said that, despite the global financial crisis and tremendous fiscal pressure, his government has done very well in safeguarding BVI’s economy and building territory’s economic sectors and reserve fund.
Among this year’s accomplishments named by the Premier, there were improvements in the sector of tourism, including partnership with the airlines serving the BVI territory, and providing incentives for new airlines, as well as BVI presence in the Asia/Pacific region which was enforced with the opening of BVI House Asia in Hong Kong – the most active partner of the jurisdiction for financial services business.
This year’s budget announced by the Premier is US$301,746,000. Smith expressed his confidence that it will help to continue territory’s progress towards stability and growth. The vision of the British Virgin Islands government is to create “a prosperous Virgin Islands, that is ideal to live, work, visit, and do business.”
Wednesday, January 08, 2014
The delegation from Qianhai Special Economic Zone and senior officials of the municipality of Shenzhen in the province of Guangdong, China, will visit the British Virgin Islands on January 9- 12 of 2014. The Qianhai/Shenzhen visit to the BVI will be headed by party chief of the Shenzhen Municipal Committee Dr Wang Rong.
During these days the six members of the delegation will meet with various stakeholders in the BVI to discuss the issues of cooperation in financial services, BVI economy, education and culture. They will have meetings with the governor, ministers and other senior government officials, among them the BVI FSC and the Tourist Board. The aim of the meetings is to discuss possible areas of understanding and cooperation between the BVI government and the Qianhai Authority, which is the modern service industry cooperation zone for the Municipality of Shenzhen - one of the wealthiest cities in China, ranked second in Forbes’ 2012 list of innovative mainland cities and eighth in the world in terms of its economic vitality.
Monday, December 30, 2013
The British Virgin Islands House of Assembly had the final reading of the new Arbitration Act 2013, which was part of the work produced by the Arbitration Focus Group – a committee comprised of public and private sector representatives. In modernising BVI arbitration framework, the Arbitration Focus Group focused on updating the Territory’s arbitration legislation, as well as procuring the extension of the New York Convention to the BVI, and creating an administrative body to facilitate arbitration in the jurisdiction.
The new Act incorporates the UNCITRAL model law on arbitration, as amended in July 2006, into the British Virgin Islands domestic law. Also, the new legislation modernizes the provisions for the enforcement of foreign arbitration awards in the BVI, and provides for the creation of a new statutory body: the BVI International Arbitration Centre. It includes changes providing arbitration awards to be exempt from local stamp duty and from any charges under the Income Tax Act or the Payroll Taxes Act.
The new Arbitration Act also grants various additional powers to the British Virgin Islands courts to support and assist the conduct of arbitration proceedings.
The previous arbitration legislation in the jurisdiction was the Arbitration Act - a synthesis of the English Arbitration Acts of 1950 and 1975, regarded as unsuitable for modern cross-border arbitration.
Friday, December 20, 2013
In addressing the House of Assembly on December 17, BVI Premier and Minister of Finance Dr. D. Orlando Smith was talking about the Medium Term Fiscal Plan of the BVI Government. By his words, the strategies and initiatives included on the plan over the next three years would have the purpose to ensure the fiscal sustainability of the British Virgin Islands, fostering economic growth, social development and investments into infrastructure. The Premier said that the strategic undertakings include channeling resources to health, social development, education, business and entrepreneurship development.
The Premier told the House: “The approach that we have taken is to first clearly articulate a development strategy which embraces Social, Economic, Environmental and Direction/Governance (S.E.E.D) themes and which provides the platform for advancing the promises we made to the people of this Territory…We have identified areas where we can make simple, but effective changes to the way Government conducts its fiscal affairs.”
The BVI Government will continue to enhance its provision of services to the public, and at the same time improve the public finance management system.
Saturday, December 07, 2013
In the end of November, UK ministers and leaders of UK Overseas territories including BVI participated at the annual Overseas Territories Joint Ministerial Council which took place in London.
During the event, the UK and Overseas territories’ governments agreed on setting out further steps to promote business, trade and investment opportunities. They also agreed to co-operate in the spheres of education, environment and energy, as well as governance and security issues and international financial services regulations.
The UK Minister for Overseas Territories Mark Simmonds commented on the meeting: “I was delighted to host this year’s Joint Ministerial Council and greatly valued my discussions with the leaders of the overseas territory governments. There was a real sense of progress towards our shared ambition for the Territories as vibrant and flourishing communities. We are working together to support economic growth and job creation and to demonstrate that the territories are among the best places in the world to do business.”
Friday, November 29, 2013
BVI Financial Services Commission has published the thirty-second volume of its Quarterly Statistical Bulletin, comprising statistics and other important information on financial services industry in the British Virgin Islands during the three months period ended September 2013. In the reported period, 12,809 Business Companies were incorporated in the jurisdiction, an increase if compared to 12,478 companies in the second quarter of 2013, and less than 16,251 companies incorporated in the same quarter of 2012. Cumulative number of companies registered in the BVI as at 30 September 2013 was 480,072. Also, there were 16 Limited Partnerships and 23 Private Trust Companies registered in BVI in Q3 2013, as compared to 33 and 16, respectively, in the previous quarter of this year. There were 908 Limited Partnerships and 556 Private Trust Companies registered in the jurisdiction at the end of this quarter.
In the sector of Banking and Fiduciary Services, there were 2 entities (trusts) licensed in the third quarter of 2013. In Investment Business, 39 new licenses were granted, as compared to 30 in the second quarter of 2013, and 29 in the third quarter of 2012. In Insolvency Services industry, there were 25 Insolvency Practitioners.
In the sphere of Legal and Enforcement and International Cooperation, there were 16 Formal and 4 Informal Requests for International Co-operation, and 44 Enforcement Matters registered. There were also 94 Ongoing Supervision Matters referred to the Licensing and Supervisory Committee and related to Banking and Fiduciary Services; also, 299 related to Investment Business, 47 related to Insurance, and 2 related to Insolvency Services. There were 3 Onsite Inspections in Q3 2013, all of them related to Trust Companies.
Saturday, November 23, 2013
Martin Crawford, chief executive of Offshore Incorporations Ltd, has referred to the status of the British Virgin Islands jurisdiction as the leading one for Chinese investors and entrepreneurs, during the China Offshore Summit recently held in Shanghai and attended by more than 350 Chinese wealth planners, bankers, lawyers, and offshore professionals.
In his presentation he named the reasons why the BVI is the most complete jurisdiction for the needs of Chinese investors, among them opportunities for non tax-driven structures such as asset protection, wealth management, funds management, investment holdings, trading, special purpose vehicles, and listing vehicles for IPOs. It was stated by him as an example that 60 per cent of the multi-million dollar London properties, owned by Chinese citizens, were purchased through BVI entities.
The chief executive of one of offshore industry leaders made his presentation on behalf of the BVI International Finance Centre (BVI IFC), platinum sponsor of the summit. Christopher McKenzie, representative of BVI law firm O'Neal Webster, promoted BVI trusts on a panel discussion titled Strategies for Family Business Succession, while Janice Skelton of Newhaven Corporate Services described the benefits of the BVI on a panel on Selecting Jurisdictions for Chinese Private Wealth Management. Barry Mitchell and Charlie Sparrow of law firm Maples and Calder presented on the benefits of BVI Trusts for Asian IPOs. On the second day, there was a two-hour special feature on the BVI jurisdiction, which included presentations and panel discussions under the theme BVI: The Complete Offshore Solution. There was also an update on BVI House Asia, established in Hong Kong this year.
Wednesday, November 13, 2013
BVI House Asia, which was opened in Hong Kong by the British Virgin Islands in September this year, launched a series of seminars focused on the financial services products of the offshore jurisdiction.
The first seminar was devoted to BVI trust and estate law, and was led by Christopher McKenzie - a partner from O'Neal Webster law firm, who has chaired the STEP (Society of Trust and Estate Practitioners) committee responsible for making the proposals to the BVI government to make trust innovations of 2003 and 2013. Case studies on BVI trusts in practice were also presented by Maples and Calder’s lawyers.
The seminar focused on the unique features of BVI trust legislation, including VISTA (Virgin Islands Special Trusts Act) that creates a special trust regime and is very popular in Asia and particularly in Hong Kong. Another focus of the presentations was the PTC Regulations, enabling unlicensed BVI companies to be set up as a confidential way of holding trust assets.
According to the director of BVI House Asia, Lorna Smith, this seminar is a precursor to the type of activities that will be put on by BVI House Asia in Hong Kong and Asia to provide updates and education on BVI's financial services products to the practitioners in the region.
Wednesday, November 06, 2013
British Virgin Islands Premier and Minister of tourism, Dr Orlando Smith made visit to Brazil to introduce the territory to the leading tour operators, travel agents and media. During the week’s time, together with BVI Tourist Board representatives the premier visited Sao Paolo and Rio de Janeiro, had meetings with more than 200 travel agents and presented the BVI destination, sharing the ideas of what makes it unique and attractive as a choice holiday vacation.
The BVI delegation also hosted a dinner for owners of ten major tour operators, a cocktail presentation evening for Travel Week Rio, a lunch for editors and journalists of top media houses in Sao Paolo.
By words of director of tourism, Sharon Flax-Mars, “This is an opportune time for the British Virgin Islands to be promoted in South America… Our presence will enable us to increase awareness of the BVI and our visibility between Brazil, Argentina and Mexico which will ultimately lead to more arrivals from these countries.”
Friday, November 01, 2013
Mark Simmonds, the UK Minister for Overseas Territories, in his comments in response to a question from MP Martin Horwood on the issue of international standards endorsed the strength of the BVI independent regulator, the Financial Services Commission (FSC). He named it “an extremely impressive regulator who wants to ensure that the British Virgin Islands has the highest possible international reputation.” He also said: “The (BVI) regulator wants it to be seen as a well regulated jurisdiction in order to encourage, rather than inhibit or hinder, further investment.”
Mark Simmonds also mentioned the “extremely positive” engagement by the Overseas Territories on the issue of tax transparency. His statement actually followed David Cameron’s praise of the UK Overseas Territories for the actions taken to ensure the highest standards of tax transparency. Cameron said that it was no longer fair to refer to the BVI and other similar jurisdictions as ‘tax havens’.
Monday, October 21, 2013
Sir Richard Branson, British entrepreneur and investor, named by Forbes as Britain’s sixth richest resident this year, and best known as the founder of Virgin Group which includes more than 400 companies, has revealed that he had been a tax exile to the BVI for the last years.
Branson moved his main residence to the private island in the British Virgin Islands. This island, named Necker, was bought by the businessman in 1979, and has become his tax base. Now he can spend in the United Kingdom only 46 to 183 days a year. As a non-resident, he must pay tax on UK income but not on any personal earnings outside of Britain. His companies are paying corporation tax.
Branson commented on his decision to move to the Caribbean island, saying it is done for the sake of his health rather than for tax reasons.
Branson’s fortune is estimated at £3.5bn, now he earns about US$11m a year, and donates much of his income to the Virgin Unite charity, which supports entrepreneurs around the world. He does not take dividends from Virgin Group Holdings, which owns his stakes in the Virgin operating companies and is registered in the British Virgin Islands.
Friday, October 11, 2013
The BVI Financial Services Commission has published the 31st volume of its Quarterly Statistical Bulletin, informing about financial services activities in the Territory in the second quarter of 2013. In the period ended June 30, 2013, 12,478 new companies were formed, compared to 16,666 in the previous quarter of this year, and to 15,200 incorporations in the second quarter of 2012. Cumulative number of active business companies at the end of Q2 2013 was 457,151. Also, the Registry of Corporate Affairs reported of 16 Limited Partnerships and 33 Private Trust Companies formed in the second quarter of 2013.
According to Banking and Fiduciary Sector statistics, 2 entities were licensed in the BVI jurisdiction in the three months period, both of them trusts, and the total number of licensed entities was 234 as at 30 June 2013. Banking sector also reported the following fiscal results for commercial banks in the second quarter of the year (in US$ thousands): total assets - $2,470,458, deposits - $1,871,986, total shareholders’ equity was $372,570, operating income - $45,799, and net income - $24,663.
In Investment Business Sector, 4 new Investment Business Licences were granted and 6 Investment Managers approved in the three months period. Also, 30 new Mutual Funds were licensed (21 of them Professional, and 9 Private), as compared to 39 newly licensed Mutual funds in the first quarter of 2013, and 22 funds in the second quarter of the previous year. Cumulative number of Mutual Funds as at 30 June 2013 was 2,277.
In the second quarter of the year, there were 24 Formal Requests in the sphere of International Cooperation, as well as 4 formal, and 51 Enforcement Matters. In Investment Business sector, 280 Ongoing Supervision Matters were reviewed by the Licensing and Supervisory Committee; 94 Matters referred to LSC related to Banking and Fiduciary Services, 28 related to Insurance, and 4 – to Insolvency Services.
Monday, September 30, 2013
Last week, BVI FSC published a document named ‘Guidelines for Authorised Representatives Under the Securities and Investment Business Act (September 2013)’, where provided information and guidelines about functions of Authorised Representatives, their qualifying procedure, reporting requirements, and other issues. The document, published on the home page of the Commission, was approved by the Board of Commissioners on 27 August, and issued by the FSC on 10 September, 2013.
In accordance with the Securities and Investment Business Act, 2010 (“SIBA”), every licensee and public, private, professional or recognized foreign fund is required to appoint an Authorised Representative, who will act as the main intermediary between the licensee or fund and the BVI FSC. The issued Guidelines define the procedures and the proper criteria for qualifying to act as an Authorised Representative, how an application to act as an Authorised Representative must be made, and submitted to the Commission. They also inform about the beneficial ownership structure of an Authorised Representative to be certified and properly supervised by the Commission.
It is provided by the Guidelines that a person certified as an Authorised Representative must be independent, meaning, for example, that it may not carry out any other services except for those associated with the provision of services as an Authorised Representative. Also, an Authorised Representative must be based in the British Virgin Islands, and everyday functions of the Authorised Representative must be carried out by individuals resident in the Territory.
The Guidelines state the functions and responsibilities of an Authorised Representative, as outlined in SIBA, human resource requirements, and those concerning general reporting and financial statements.
Thursday, September 19, 2013
The British Virgin Islands jurisdiction has invited a specialist in the United States Foreign Accounts Tax Compliance Act (FATCA), which is now being discussed by the U.S. and BVI governments. The specialist will make special presentations to individuals affected by the US law. Financial Secretary Mr Neil Smith stated in his comments that specialist’s visit has the purpose of informing residents on their individual obligations under FATCA. He said: "What is important to note, is that FATCA gives the Internal Revenue Service (IRS) a new mechanism to collect information on US citizens that are not properly filing US income tax returns and reporting their bank accounts. The government really wants to ensure US citizens in the BVI are aware of their general US tax filing requirements."
A few months ago, the BVI government commissioned professional services firm KPMG to carry out a study on FATCA, to highlight the persons who may be exempt from reporting under the law, and for better comprehension of obligations of individuals who are not exempt from compliance with the law.
Friday, September 13, 2013
The jurisdiction of the British Virgin Islands has launched Hong Kong office, which will have the functions of representing BVI in mainland China and the entire Asia Pacific region. The official opening of “BVI House Asia” was hosted by the British Consul General to Hong Kong and Macau Caroline Wilson, and took place on September 5 at the British Consulate. The event was attended by up to 100 HK professionals, as well as by leading financial services practitioners and representatives of several governments, including Hong Kong, the United States, European Union, Switzerland and Ireland.
BVI House Asia will facilitate a smooth interface between the industry in Asia and the BVI; it will allow responding to enquiries of a social, political or economic nature from the region, and promoting China’s and HK investments into the BVI economy. Other functions of the BVI office in Hong Kong will be to provide quick access for certain information services to users of BVI business companies, and to develop the relationship of the BVI with mainland China not only in financial areas but also in the spheres of education and culture.
Through the BVI Financial Services Commission (BVI FSC), BVI House will help strengthen ties with regional government authorities. In the next few months, the Commission will also provide resources for the House, including staff, which currently includes of the interim director and a chief operating officer Heather Tang.
Thursday, September 05, 2013
In the end of August, international accounting and financial consulting firm Deloitte announced the merger of its BVI, USVI, and Bermuda practices. It is said to bring enhanced services to clients and greater access to Deloitte professionals who provide insights and solutions to complex business challenges.
The company also informed that the practices will continue to operate as Deloitte & Touche Services Ltd, from the current offices in the British Virgin Islands and US Virgin Islands, providing tax, consulting, financial advisory and audit services. The company does not plan to close offices, and each of them will have local leadership.
The merger combination, effective from August 26, coincides with the retirement of BVI/USVI office managing partner Mark Chapman, who will continue as a consultant to the company through the end of October. Mark Chapman joined Deloitte BVI in 1995, and focused on offshore enterprises in the financial services sector. Now the British Virgin Islands and US Virgin Islands offices will be operated by Carlene Romney, who is specialist in financial services audits, and Richard White, an experienced professional with over 13 years of working in practice and industry as a chartered accountant.
Speaking about the merger of practices, Carlene Romney stated that Deloitte’s clients, communities and professionals will benefit from it, as the company will be able “to deliver additional services, especially in areas such as tax, restructuring, and risk management.”