Monday, January 07, 2019

BVI Passes The Economic Substance (Companies and Limited Partnerships) Act

According to the announcement of BVI Premier and minister of finance, Dr Orlando Smith, the territory has passed The Economic Substance (Companies and Limited Partnerships) Act, 2018, which came into force on January 1, 2019. This is an important legislation addressing the EU’s concerns over “economic substance”, ahead of the December 31 deadline set by the European union for the British Virgin Islands and other financial centres.

In his comments BVI Premier said: “The government has engaged closely with EU officials over the last 18 months to understand and address the concerns that have been raised and has consulted on a regular basis with representatives of the financial services industry. Dialogue with the industry will continue to ensure smooth implementation of the new requirements and the International Tax Authority is issuing a guidance note to accompany the new Act.” 

Also, the BVI government admitted that the legislation will create challenges for some companies and limited partnerships, mostly due to the compressed timeline. It is expected that the formal response of the European Union will be given after some months.

Monday, December 10, 2018

BVI Government Approved Bill on the Issue of Economic Substance

BVI Premier and Minister of Finance Dr Orlando Smith announced that the BVI Government has taken measures to respond to the EU’s listing of non-cooperative jurisdictions, and will take reasonable steps to address EU economic concerns. The government approved the Bill , which is planned to be considered in the House of Assembly on December 13, and to come into effect by December 31, 2018, which is the EU deadline.

The new legislation will provide further assurance which was required from the BVI on the issue of ‘economic substance’. It is to introduce economic substance requirements for all business companies and LPs which are registered and tax resident in the British Virgin Islands.

Every corporate service provider will have to know where the company or limited partnership is tax resident and must be ready to provide that information to the BVI’s competent authorities. If tax resident in the BVI, they must show ‘economic substance’. Companies or LPs must, in relation to any relevant activity, carry out core income generating activities in BVI. Among them are: banking business, insurance business, fund management business, finance and leasing business, headquarters business, shipping business, holding business, intellectual property business, and distribution and service centre business.

For the last months, the BVI government had regular consultations with representatives of financial services industry, to address the concerns, and will continue dialogue for smooth implementation of the new requirements.

Saturday, November 24, 2018

Premier Announced New Ministerial Appointments in BVI Government

This week, BVI Premier Dr Orlando Smith appointed honourable Marlon Penn as the new Minister of Health and Social Development, and Honourable Hubert O’Neal as the new Junior Minister of Tourism. This happened after Ronnie Skelton was revoked from his post as Minister of Health and Social Development, and Archibald Christian lost his post of Junior Minister of Tourism.

Ronnie Skelton was terminated in his post after he reportedly told to local media that his was the leader of the breakaway political party known as the Progressive Virgin Islands Movement. This was named by Premier as a ‘clear conflict of interest’, as it is impossible to stay a member of Cabinet and form own party at the same time. The similar reason was for firing Archibald Christian from his post. 

Also, Second District Representative Melvin Turnbull, who wrote to the Speaker of the House of Assembly last week requesting to be seated on the Opposition side of parliament, left the NDP government. Christian and Turnbull have already announced their alliance with Progressive Virgin Islands Movement.

Monday, November 12, 2018

Director for Overseas Territories Paying Visit to BVI

The director for Overseas Territories in Britain’s Foreign and Commonwealth Office Ben Merrick made a four day visit to the British Virgin Islands, during which he was focusing on governance, financial services of the territory, and the post-hurricane recovery. He was talking with the BVI Premier and Minister of Finance Dr Orlando Smith, the Cabinet, the leader of the opposition and representatives of the financial services industry.

One of the main purposes of the visit is to evaluate the influence of financial and technical support from the UK to the BVI after hurricanes, and to discuss further funding and loan guarantees for BVI recovery and development. Government departments and agencies visited by Merrick include the Royal Virgin Islands Police Force, the Department of Disaster Management, the BVI Ports Authority, the BVI Airports Authority and the Recovery and Development Agency.

Friday, October 26, 2018

BVI Offshore Law Firm Launched New York City Office

O-Neal Webster, full-service law firm headquartered in Tortola, BVI, in October announced its expansion to New York City, New York. It became the first BVI law firm to establish physical presence in the city; it also has an office in London, UK.

The newly established office in NY is headed by Kerry Anderson, former O’Neal Webster Managing Partner and the head of law firm’s Investment Funds and Regulatory Department. The office will provide advice on BVI law in investment funds and finance, corporate and commercial, property, business, trusts and estates, insolvency and restructuring. By words of the head of NY office, seminars and events will be regularly hosted there, to highlight the benefits of doing business with and in the BVI, the world’s leading jurisdiction for company incorporations.

The office will serve both US and global clients; US client base of the BVI firm includes major law and accounting firms, fund managers, family offices and many others.

BVI Finance Executive Director Lorna G. Smith commented: “O’Neal Webster’s opening of an office in New York, the global hub of international finance, is a significant milestone for the firm and the entire BVI jurisdictionFor the first time, clients will receive advice on BVI funds and private client activities directly within the U.S., thereby facilitating the speed and effectiveness for entering global capital markets. We are very proud of our member firm’s accomplishment.” 

Tuesday, October 09, 2018

BVI FSC Published New Amendment Order to BVI Business Companies Act

The BVI Financial Services Commission has published BVI Business Companies Act Amendment Order, which came into force on 1 September 2018, and which reduced maximum penalty for late filing of Registers of Directors from US$8,000 to US$5,000. Also, the Order provided for the issue of refund in cases where penalty over US$5,000 was previously applied, and the refund process was already started.

BVI Business Companies that were incorporated before 1 April 2016 were given time until 31 March 2017 to file Registers of Directors at the Registry of Corporate Affairs, and prior to the amendment BVI BCs that failed to file them were subjected to escalating penalty fees.

The registrar is authorized by this Amendment Order to strike existing companies from the Register if they fail to file RODs by the deadline of 31 December 2018, and the companies will need to pay all penalties and fees in order to be restored.

Friday, September 21, 2018

First BVI Africa Trade Mission to be Held in November 2018

BVI Premier and Minister of finance, Dr Orlando Smith, will be leading BVI Africa Trade Mission which will take place for two weeks from November 5 to 16 of 2018, and will include South Africa, Kenya and Nigeria as the largest business centres in the region. The BVI has a considerable stock of direct investments on the continent, and it is expected that the visit will enhance and deepen business relationships between BVI and African countries.

Dr Smith will be the head of the delegation which includes BVI Finance team and the Africa Expert Network (AXN), BVI Finance’s consultants for the mission. The mission itself is similar to the Asia Trade Mission and consists of high-level meetings with government officials and private sector meetings

The BVI mission will also hold three mini conferences in Cape Town, Nairobi and Lagos, which will provide an opportunity for the delegation to promote the products and services of the BVI jurisdiction, such as private equity and venture capital offerings, investment funds and trusts, as well as time proven BVI business companies and recently unveiled micro business company.

Tuesday, July 24, 2018

BVI FSC Publishes AML Code and MBC Act Amendments

The British Virgin Islands Financial Services Commission issued two new additions to the regulatory and registration regime in the jurisdiction: An amendment to the Anti-Money Laundering and Terrorist Financing Code of Practice, 2008 (the “AML Code”) and the Micro Business Companies Act, 2017 (the “MBC Act”).

The first one focuses on supporting the use of digital services for customer identification and verification, which provides for global financial technology solutions. The amendment to the AML Code takes effect on 1 August 2018

For the Micro Business Companies Act, 2017, there is a new technology that focuses on easy and quick registration of MBCs. BVI FSC expanded its registration system VIRRGIN to provide a new MBC portal. It will be available to registered agents who can develop mobile applications and more efficiently manage and administer MBCs. The MBC Act has come into effect on 5 June 2018, and the registration regime is currently implemented.

Wednesday, July 11, 2018

Elise Donovan to Become Interim Director of BVI London Office

The Director of the BVI House Asia Elise Donovan has been appointed by the Government as Interim Director of the BVI London Office. She will change in this post Benito Wheatley, and will be transitioning there from August 20 to December 31. After this period, she will return to the BVI to the post of Chief Executive Officer of BVI Finance, which will be left by Lorna Smith.

The duties of the Director of BVI London Office include advising the Premier on matters for implementation and making recommendations to ministries, international agencies, the private sector and other agencies. She will be also responsible for “strengthening BVI’s voice with Her Majesty’s Government and the Foreign and Commonwealth Office”; monitoring political, legislative and diplomatic developments in the UK and EU, and providing timely analysis of those affecting or potentially impacting the BVI. 

Meanwhile, the BVI Government has already started to search for new and permanent directors of the BVI House Asia and the BVI London Office.

Saturday, June 30, 2018

BVI Provides Visa Exemption Policy for Chinese Nationals

Chinese nationals received the right to enter and remain in the British Virgin Islands without the need for a visa, for business and tourism only, for a period of less than 6 months. This continues the BVI visa exemption policy which went into effect on September 1, 2016, and through which foreign nationals, including Chinese people, were allowed to enter the jurisdiction without BVI visa if they held the UK, U.S. or Canadian visa.

The BVI government believes that the visa exemption will help with the country’s global marketability in tourism and financial services sector. Chinese nationals will have the right to visit the BVI for business matters related to the BVI incorporated companies, as well as litigations in the BVI courts

China is currently the largest tourism source market in the world, and the second largest economy. It has been the largest trading partner of the British Virgin Islands for more than 25 years. Chinese and Hong Kong companies comprise 41% of the US$1.5 trillion of assets going through the BVI.

Monday, June 18, 2018

BVI Premier on a Mission to Asia to Promote BVI Financial Services

From June 2 to 17, BVI Premier and Minister of Finance Orlando Smith was leading a delegation to a number of cities in Asia, to host mini-conferences to promote traditional and new business and financial services products of the British Virgin Islands. During his visit, he had meetings with main government and industry professionals in the Asian region.

During one of the conferences held on June 12, among the topics discussed there were BVI Advantage, the opening of Bank of Asia in BVI, new BVI products such as Micro Business Companies Act, Limited Partnership Act. This conference was attended by more than 100 practitioners from BVI and China private sector. 

The Premier commented on other meetings held: “I am pleased that we have also had productive meetings with the Ministry of Foreign Affairs, Ministry of Commerce and the China Friendship Association, all of whom welcomed the several developments in the BVI that will further the economic relationship between BVI and China.”

Thursday, June 07, 2018

BVI Government Appoints Legal Council to Advise on Public Register

In the press briefing held on May 30, BVI Premier and Minister of Finance, Dr Orlando Smith, announced that the government has appointed legal counsel to advise on potential legal issues related to the public register of beneficial ownership imposed by Britain. This appointment followed the UK Sanctions and Anti-Money Laundering Bill which requires Overseas Territories, including the BVI, to make public beneficial ownership of all registered companies. With this Bill, the UK receives the right to implement sanctions on individuals, companies and states, and address money-laundering after the Brexit.

BVI Premier said that the legal team “is confident that the imposition of a public register would raise serious constitutional and human rights issues and would be subject to constitutional challenge.” 

A week earlier, BVI diplomat Benito Wheatley has informed the British government that the UK decision to force public registers of beneficial ownership will negatively impact the jurisdiction’s financial services sector that makes more than 60 percent of government revenue.

Monday, May 21, 2018

BVI Premier and Opposition Speak about UK Amendments

After the discussions with the UK parliamentarians concerning the controversial amendments to the Sanctions and Anti-Money Laundering Bill, BVI Premier Dr Orlando Smith made the statement where he said: “Be in no doubt, that if the UK Parliament proceeds with seeking to impose public registers on the British Virgin Islands, this could fundamentally alter our relationship with the UK and we will take all necessary steps to protect our constitutional rights.”

In his turn, the Opposition Leader Andrew Fahie agreed that this is a “constitutional overreach”, and said that the Opposition and Premier “stand united on protecting the constitutional rights of the British Virgin Islands.” 

The UK amendments impose the requirement for its Overseas Territories including the British Virgin Islands to make public the names of beneficial owners of offshore companies incorporated in the jurisdictions. This could bring harm to the financial services sector which is so important to the BVI, comprising about 60 percent of its annual revenue.

In another press release, the BVI Premier noted that the BVI will not impose public registers unless they are a global standard.

Wednesday, May 09, 2018

BVI FSC Issued Financial Services Statistics for Q4 2017

The BVI Financial Services Commission has issued the forty-ninth volume of Quarterly Statistical Bulletin, providing information and analysis of financial services activities in the BVI in the fourth quarter of 2017. In this period, according to the Registry of Corporate Affairs the number of new company incorporations was 8,538 - an increase as compared to the third quarter of 2017 and also the fourth quarter of 2016. Cumulative number of companies as at 31 December 2017 was 389,459. The number of newly registered Private Trust Companies and Limited Partnerships also was higher in the reported period than in the previous quarter of the year, and their cumulative number was 1,089 and 812, respectively. Total number of BVI Business Companies registered in year 2017 was 32,493, which is an increase after the minimum of the previous year.

In Investment Business, there was also an increase in the last quarter of the year, with 30 total funds registered after 11 in the third quarter and 18 in the fourth quarter of 2016. Cumulative number of funds made 1,499 as at 31 December 2017. Total number of Insolvency Practitioners remained the same as in Q3 2017, as well as the total number of Licensed Insurers and Functionaries. 

In the sphere of International Co-operation, there were 18 Formal Incoming requests and 62 Enforcement Matters in the reported period, which is less than in the previous quarter of the year. Also, in Q4 2017 there were 111 ongoing supervision matters referred to the Licensing and Supervisory Committee and related to Banking, Insolvency and Fiduciary services, 50 related to Investment Business, and 19 related to Insurance.

Monday, April 30, 2018

BVI Eligible for Association Membership in the Caribbean Forum

CARIFORUM director has confirmed that the British Virgin Islands is eligible for associate membership in this regional organization which engages in policy dialogue with the European Union on behalf of a number of Caribbean states. Confirmation of BVI eligibility became part of a CARIFORUM regional consultation in Barbados in April, which focused on establishing an effective platform for dialogue between CARIFORUM and French Caribbean Outermost Regions and British and Dutch OCTs.

The BVI will no longer be treated as OCT after the UK exits the European Union in March 2019, so the government of the territory is seeking the way to continue BVI current relationship with the EU through CARIFORUM. Currently member states of CARIFORUM include Antigua and Barbuda, The Bahamas, Barbados, Belize, Cuba, Dominica, Dominican Republic, Grenada, Guyana, Haiti, Jamaica, St Kitts and Nevis, Saint Lucia, St Vincent and the Grenadines, Suriname and Trinidad and Tobago. 

The assistant secretary for external affairs in BVI Premier’s Office Christopher said in her comments: “We welcome that associate membership is open to the BVI. This status would give us a more meaningful status in CARIFORUM whereby we can participate in the Caribbean’s policy dialogue with the EU and regional coordination. At the moment we remain an observer.”

Thursday, March 29, 2018

BVI and EU co-chair Meeting to Discuss EU Tax List Issues

BVI and European Commission co-chaired the meeting of financial services partnership working party which was held in Belgium between the EU and a number of Overseas Countries and Territories. During the meeting, the EU list of non-cooperative jurisdictions for tax purposes was discussed. From OCT jurisdictions, there were representatives of Aruba, British Virgin Islands, Cayman Islands, Turks and Caicos Islands and some others, from EU, there were the officials from the Directorate General for Tax and Customs Union and Directorate General for International Development and Cooperation. 

Beside the listing process and ongoing procedures, the participants of the meeting also discussed beneficial ownership developments in the EU and OCTs and EU approach to taxation in the digital economy sector. 

BVI London Office director and UK and EU representative Benito Wheatley co-chaired the meeting on behalf of the BVI, and currently is co-chairing the OCT/EU financial services partnership working party. He said in his comments: “It is critical that the EU and OCTs maintain dialogue on tax and other financial services issues to gain a greater understanding of any concerns.”

Thursday, March 22, 2018

BVI Finance Hosting Expo for Job Seekers in Financial Services

This week, BVI Finance is hosting a Financial Services Opportunities Expo to give the possibility for job seekers to join the financial services industry of the jurisdiction. More than 75 job seekers are already considered to be hired. BVI Finance has said in the media release that participants will have opportunities to speak directly with financial services firms and be interviewed for available positions. Also, they can attend breakout sessions surrounding professional development in the financial industry, and participate in feedback sessions.

According to BVI Finance, “The Expo aims to help the islands rebuild by facilitating gainful employment. This initiative is from the Committee to Revitalize Financial Services of the Virgin Islands that was established last year. Later this year, similar expos will be planned for the tourism and general business industries.”

Monday, March 19, 2018

BVI FSC Announced Registration of Loss Adjusters

The Financial Services Commission issued a public notice advising insurance professionals and general public of the list of the Loss Adjusters, including Public Loss Adjusters registered under Section 9(6) of Financial Services (Continuity of Business) Act, 2017 (the “Continuity of Business Act”). The document provides for the registration of Loss Adjusters to assess insurance claims resulting from Hurricanes.

It is advised by the Commission that the Loss Adjusters named in the list have been registered pursuant to the Continuity of Business Act until 31 March 2018, when the Continuity of Business Act ceases to be in force.

Friday, March 16, 2018

BVI Gets New Status on EU Tax list

On March 13, 2018, the European Union has made changes to the list of non-cooperative tax jurisdictions: three countries were removed and further three were added to it. Bahrain, the Marshall Islands and Saint Lucia were said by the EU Council to have made commitments to answer the EU’s concerns about them, and the Bahamas, Saint Kitts and Nevis, and the US Virgin Islands were, in their turn, included in the list.

The British Virgin Islands, along with Anguilla, Antigua and Barbuda, and Dominica were added to annex II of the list, which includes territories that have made commitments to reform their tax policies. These jurisdictions are subject to close monitoring. The original list comprised 17 jurisdictions and was announced on December 5, 2017.

Monday, February 26, 2018

BVI Among Major FDI Sources for New Zealand

According to the information of New Zealand’s lobby group, foreign direct investment (ownership of companies) in the country increased by 653% from $15.7 billion in 1989 to $113 billion in 2017. Most assets are owned by businesses from Australia, and the British Virgin Islands also are among the major investors along with the US, Hong Kong, the UK, Japan, Singapore, Netherlands, Canada, Cayman Islands, and a number of other countries.

By words of Bill Rosenberg of the Campaign Against Foreign Control of Aotearoa (CAFCA), "All had over $100m in foreign direct investment in New Zealand. These accounted for 95 per cent of foreign direct investment in New Zealand and Australia alone accounts for 51 per cent. Luxembourg, British Virgin Islands and Cayman Islands are tax havens, and the Netherlands has been used to avoid tax.

He also said that foreign owned entities keep control of 38% of the share market of New Zealand in 2017, while in 1989 it was 19%. Last year, the Overseas Investment Office approved foreign investments in the country in the amount of $5.3 billion.

Tuesday, January 23, 2018

British House of Lords Voting Against Public Beneficial Owners Register

The amendment proposal for the Cayman Islands, British Virgin Islands and four other British Overseas Territories to implement public register of beneficial owners behind offshore companies registered in these jurisdiction was rejected in British House of Lords, by 211 to 201. The peers voted during the debate on the proposed Sanctions and Anti-Money Laundering Bill; the public register requirement was for the purposes of “preventing money-laundering”.

The amendment, if accepted, would allow the UK government to demand the offshore countries to provide details of companies’ owners. It was already the fourth time when the idea of public registers was discussed in the House of Lords.

In the opinion of the Conservative member of the Lords who argued against the proposal the law enforcement agencies do not support public registers as they actually don’t help law enforcement. He also noted that the UK overseas countries already shown themselves“extremely efficient in responding to the requests of policing and other agencies”.

Other concerns expressed included the potential identity theft that can be facilitated by the public register of beneficial ownership, as well as possible loss of business in favour of competitors. There were also warnings against legislating for self-governing overseas territories.