The Model 1B intergovernmental agreement (IGA) was signed by the government of the BVI at the Department of Treasury in Washington, DC. According to BVI Premier Dr Orlando Smith who signed the IGA, this is the final step in the current phase of Foreign Account Tax Compliance Act (FATCA) implementation in the British Virgin Islands. Next phase will be creation and issuance of guidance notes that assist financial institutions and other parties in the jurisdiction to determine their requirements under the agreement.
BVI Financial Secretary Neil Smith stated among the key benefits of the IGA that BVI financial institutions have until the end of 2014 to obtain a global intermediary identification number (GIIN).
The BVI government will issue a draft of the territory’s guidance notes to receive comments from members of the financial services industry. It will be possible to give feedback on the guidance notes also through participating in workshops that will be provided for the industry specialists by KPMG (BVI) Limited. After making sure that the guidance notes will adequately address any BVI-specific situations, they will be updated and amended.
FATCA was enacted in 2010 by the US Government, with the main purpose to combat tax evasion by some US citizens holding their investments in accounts outside of the United States, and requires foreign financial institutions to report to the IRS information on assets of US$50,000 or more held by US taxpayers.
Wednesday, July 09, 2014
Monday, July 07, 2014
In June, the BVI government announced the signing of tax information exchange agreement (TIEA) with Japan. The new TIEA, which became 26th tax agreement for the jurisdiction, will come into force on the thirtieth day after completion of the domestic implementation procedures by both parties. In the British Virgin Islands, TIEAs are implemented through subsidiary legislation under the Mutual Legal Assistance (Tax Matters) Act, 2003.
The BVI-Japan TIEA complies with OECD standards for these agreements, providing for assistance through the exchange of information concerning taxes covered by the TIEA. For BVI, the competent authority is the Financial Secretary or an authority designated by him in writing, for example, the International Tax Authority, and for Japan the competent authority is the Minister of Finance or his authorized representative.
Monday, June 30, 2014
In the South China Morning Post publication, BVI and Cayman Islands were named the main offshore hubs for China, which get the largest part of Chinese investments in the Caribbean region. The US government body informs that of US$62.1 billion in outward direct investment flows by 2012, all but US$282 million went to these two jurisdictions, while all the other Caribbean countries received only US$31 million.
By the scale of the fund flows, the British Virgin Islands has become the second-largest destination for mainland Chinese overseas direct investment after Hong Kong, being the preferred offshore tool for structuring investments into and out of Asia.
According to the report published by the US-China Economic and Security Review Commission, in 2010, British Virgin Islands companies were responsible for US$111 billion, or 10 per cent, of foreign direct investment in China. Chinese companies invested US$69 billion overseas, of which 75% was handled by companies domiciled in the British Virgin Islands, Cayman Islands and Hong Kong. In 2012, FDI flows to the British Virgin Islands reached US$2.24 billion, while the stock of these investments amounted to US$30.85 billion.
Last year’s opening of BVI House Asia in Hong Kong facilitated the increase in fund flows. The review commission stated that China's ties with the Caribbean had strengthened over the decade, and are likely to continue expansion.
Monday, June 23, 2014
Last week, the thirty-fourth volume of the BVI FSC Quarterly Statistical Bulletin was issued by the Commission, providing statistics and analysis about financial services industry in the BVI jurisdiction for the first quarter of 2014. According to the Registry of Corporate Affairs, the number of companies incorporated in this period increased to 14,062, from 11, 376 in the fourth quarter of 2013, the number of Private Trusts was 54 in the first quarter of 2014 (48 in Q4 2013 and 30 in Q1 2013), and there were 28 Limited Partnerships registered (24 in Q4 2013 and 15 in Q1 2013). At March 31, 2014, cumulative number of incorporations was 482,087, including all active companies.
According to the statistics provided by Investment Business industry, in this period 3 new Investment Business licences and 9 Approved Investment Managers licences were granted. In the Mutual Funds sector, 21 professional and 4 private licences were granted in the first quarter of 2014 (33 and 5 licences, respectively, in the previous quarter).
In Insurance industry, 3 new licences were granted to captive insurers in the first quarter; cumulatively there were 143 captive insurers and 37 domestic insurers as at 31 March 2014.
By Legal and Enforcement and International Co-operation statistics, in the reported period there were 24 International Co-operation Matters requiring the disclosure of non-public information, 10 International Co-operation Matters requiring the disclosure of public information, and 32 Enforcement Matters. Among the ongoing Supervision Matters Referred to Licensing and Supervisory Committee in Q1 2014, there were 96 Banking and Fiduciary Services matters, 191 Investment Business matters, 99 related to Insurance, and 3 to Insolvency Services industry.
Saturday, June 14, 2014
BVI House Asia made the presentation named ‘BVI 2.0 – Taking it to the Next Level’, during the China Offshore Summit which was held in Beijing from May 28 to 29, and was visited by more than 300 financial intermediaries, corporate service providers, international trust companies, bankers and lawyers from China. During the presentation, the director of BVI House Asia Elise Donovan spoke about the BVI companies’ use in China and their role today in facilitating cross-border transactions in the market.
British Virgin Islands, as one of the leading financial centres for international investments, remains the top jurisdiction for inward and outward FDI flows in China. It is a connecting link for East and West markets, assisting Chinese companies to access Western capital or technology through acquisitions and listings on foreign stock exchanges.
Another presentation was made by Harney Westwood & Riegels’ Asia managing partner Jonathan Culshaw, under the name ‘Same same… but Different, Differences between BVI and Cayman Companies’. He outlined advantages of both offshore jurisdictions, among them flexibility in structuring, neutrality, and legal and professional competence in the China/Asia market, but noted that “the BVI is better value for money.”
Thursday, June 05, 2014
Last week, BVI Opposition leader Ralph O'Neal announced that he is going to retire from public service and political life. He is the longest serving elected politician in BVI history, with more than 38 years of working in the House of Assembly and Legislative Council. Also, he has been the head of the elected government for combined 12 years, which is the second longest period in the jurisdiction, following Lavity Stout whom he succeeded in 1995.
Ralph O’Neal was the first person to be appointed to the newly titled Premier office in 2007, under the newly adopted constitution. He left the post in November 2011, after the Virgin Islands Party lost its majority after the general elections. At present, he is the leader of the opposition already in the third time – a record among BVI politicians.
BVI Premier Dr Orlando Smith made a statement following the opposition leader’s announcement, where he recognized on behalf of the government and people of the BVI the invaluable contributions O’Neal has made to the development of the territory.
Tuesday, May 27, 2014
BVI Premier and Minister of Finance, Dr Orlando Smith, has returned from the meeting of the Caribbean Overseas Countries and Territories Council (COCTC) which took place in Montserrat from May 15-16 and had the purpose to discuss the regional programming for the 11th European Development Fund (EDF).
On the meeting, the BVI Premier encouraged members of the Council, which included officials from the Caribbean British and Dutch Overseas Territories of Anguilla, Turks and Caicos Islands, St Maarten, Curacao, Montserrat, and the British Virgin Islands, to strengthen the level of cooperation, and to assess jointly the political, economic and social situations in the Caribbean region.
The Caribbean Overseas Countries and Territories Council was established in April 2012 for discussions aimed at strengthening regional cooperation, enhancing international cooperation, sharing resources and addressing issues of mutual interest and concern among Caribbean Overseas Territories.
Friday, May 16, 2014
During the meeting of government officials of the British Virgin Islands and United States Virgin Islands on the sixth Inter-Virgin Islands Council on May 8, the areas of shared interests were discussed by the parties, as well as initiatives to strengthen ties between the jurisdictions. The council launched updates and developments on law enforcement, tourism, in the sphere of education, and many others.
The BVI delegation included permanent secretaries and relevant senior officers and was headed by the Premier and minister of finance, Dr Orlando Smith. Representation of the British Virgin Islands government at the Inter-Virgin Islands Council meeting reaffirmed its commitment to strengthen regional and international relations, and maintain close ties with the United States Virgin Islands.
The Inter-Virgin Islands Council was established in 2004, by signing the memorandum of understanding by BVI Chief Minister Dr Orlando Smith and former USVI Governor Dr Charles Turnbull. The first meeting of the Council was held in April 2005, on St Croix.
Monday, May 05, 2014
The UK Member of Parliament and Under Secretary of State for Foreign and Commonwealth Affairs Hon. Mark Simmonds visited the BVI House Asia, Hong Kong, with a fact-finding trip. Mr Simmonds confirmed his support for the BVI, and stated that the financial services industry was a ‘fundamental pillar for the future of the BVI’.
During his visit, Mr. Simmonds received presentations from Director of BVI House Asia Ms. Elise Donovan, Deputy Managing Director of the BVI FSC, Mr. Kenneth Baker, as well as presentations from some other members of the BVI financial services industry in Asia, which gave an overview of how BVI companies are used across the region. According to the Premier’s Office, the presentations outlined the advantages of doing business in the BVI, the flexibility of its corporate structures, legal system, and strong BVI legal expertise.
The BVI practitioners told the UK Minister for Overseas Territories that the BVI was still the most important jurisdiction in the Asian market, and they were pleased that the BVI Government had established BVI House Asia to provide support for their work in Asia. They also stated that taxation was not a primary reason for using BVI corporate structures, and the most important reasons for use currently and in future are asset protection, wealth management, funds management, investment holdings and trading.
Tuesday, April 22, 2014
14 BVI agencies signed memorandum of understanding with the Inter-Governmental Committee on Anti Money Laundering (AML) and Countering the Financing of Terrorism (CFT), during the opening ceremony to launch the British Virgin Islands’ National Risk Assessment Council (NRAC). Signatories to the MoU included the Attorney General’s Chambers, the Virgin Islands Shipping Registry, the BVI Post Office, the BVI Ports Authority, Her Majesty’s Customs, the Financial Investigations Agency, Financial Services Commission, the Department of Trade and Consumer Affairs, the Immigration Department, BVI Airports Authority, International Tax Authority, Non-Profit Organisation Registration Board, Office of the Director of Public Prosecution and the Royal Virgin Islands Police Force. Signing of the memorandum was witnessed by many top government and private sector officials.
The signing of this MoU means that the jurisdiction is ready to international co-operation in combating money laundering and terrorism financing, and continues to comply with global financial standards, including information exchange on tax matters. It is designed to foster cooperation between the relevant authorities to enable them to carry out their administrative and statutory obligations, and to assemble and analyze information concerning activities related to money laundering, combating financing of terrorism, financing of proliferation of weapons of mass destruction, corruption, and other serious crimes.
Tuesday, April 15, 2014
In the beginning of April, British Virgin Islands Premier and Minister of Finance, Dr Orlando Smith, made an official visit to Brussels, during which he had meetings with European Union (EU) officials and discussed partnerships and programs for the benefit of the 26 Overseas Countries and Territories (OCTs) associated with EU. At the European Commission, the Premier discussed plans for the 13th OCT-EU Forum which will be held in the British Virgin Islands. Also, BVI Premier met with United Kingdom Member of European Parliament (MEP) Ashley Fox.
On behalf of the Premier, BVI London Office director Kedrick Malone and deputy director Benito Wheatley met the secretary general of the African, Caribbean and Pacific Group of Countries (ACP) Secretariat, and discussed economic cooperation and programming between the OCTs and ACP countries in the regions where they are located.
Dr Orlando Smith launched himself as chairman of the Overseas Countries and Territories Association (OCTA). He was introduced to OCTA partners, among them representatives of the Greek Presidency of EU, Caribbean ambassadors to the EU, the director of the OCT Task Force at the European Commission, representatives of an environmental non-governmental organisation (NGO) and representatives of the OCTA Executive Committee (ExCo).
Monday, April 07, 2014
In the end of March, BVI House Asia held seminar on Funds and Investment Business: BVI Options in Hong Kong, which was attended by more than 40 practitioners, among them lawyers, accountants and corporate service providers. Themes covered at the funds seminar included the reasons why BVI is used for funds and investment services, as well as an overview of private, professional and public fund options and balancing regulation with commercial dynamics.
By words of director of BVI House Asia, Elise Donovan, the seminar is “part of BVI House Asia’s series to educate stakeholders about the financial services and products offered by the jurisdiction.” She said: “The BVI is well-known in this region for business companies, but we also offer funds, trusts and estate planning, ship and aircraft registration, captive insurance and more.”
BVI House Asia was officially launched in Hong Kong in September 2013 to expand and strengthen ties with the financial community in the Asian region and provide educational platform for the BVI financial services.
Friday, March 28, 2014
The 15th edition of the Global Financial Centres Index (GFCI) has named the BVI as a top five offshore finance centre. In total, among financial centres, it is in the 44th place, followed by 39 other countries. In GFCI15 report, 29 financial centres got higher positions in the ranking, 47 countries lost their positions, and 4 remained in the same place.
The GFCI report appears two times a year, providing profiles and rankings for global financial centres based on instrumental factors and the online survey results. It is an influential report in the financial world.
Premier and minister of finance of the British Virgin Islands, Dr Orlando Smith commented on the results of the report: “This rating is testament to the comprehensive legislative and world class regime for financial services business that exists in the BVI today… The strong performance of the BVI can also be attributed to the strength of our independent regulator. This has been acknowledged and endorsed by several independent supranational standard setters and underpins my government’s belief that good regulation is good for business.”
Monday, March 17, 2014
The BVI and the US government concluded negotiations on the inter-governmental agreement (IGA) concerning the US Foreign Accounts Tax Compliance Act (FATCA). The initialling of the final text of the agreement now can be followed by its implementation in the British Virgin Islands.
Upon signing of the agreement, foreign financial institutions in the jurisdiction that are required to comply with US FATCA, will be able to report certain information on US account holders to the BVI International Tax Authority who would automatically exchange information with the US government.
By words of BVI Premier and minister of finance, Dr Orlando Smith, “The initialling of the FATCA IGA is another important signal of BVIs commitment to global standards on transparency.”
The conclusion of negotiations on the agreement was preceded by long lasting dialogue with the US Treasury in which the BVI government negotiated and received some exceptions for relevant entities such as non-profit organizations and pension plans and their accounts. Now the BVI is to put into place shortly the final legal and administrative procedures to facilitate the implementation of the agreement.
Saturday, March 08, 2014
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.
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.