Monday, October 29, 2007

Vietnam FDI Statistics Reported for 10 Months: BVI the second with US$1.73 billion

The Foreign Investment Department under the Ministry of Planning and Investment of Vietnam reported FDI figures for the ten months of 2007. From the time of the previous 9-month report, British Virgin Islands raised their positions, now they rank the second in the published top list of 50 foreign investors' countries, with the amount of invested registered capital of US$1.73 billion. The Republic of Korea, again, is the first place with registered capital of US$2.44 billion, and Singapore with US$1.37 billion is the third.

According to the Report of Foreign Investment Agency, there are 1,144 new projects on the whole, which brought in US$9.75 billion of foreign investments into Vietnam economy. The overall amount of foreign direct investment during the first ten months 2007 made US$11.26 – a 36% increase if compared to the same period of the previous year.

Vietnam now ranks the 6th among the top ten most attractive FDI destinations. These data were provided according to a survey by the United Nations Conference on Trade and Development.

Thursday, October 25, 2007

Mr Baker's Speaking on the BVI Private Trust Companies Regulations

Kenneth Baker of BVI FSC Speaks on Amendments to BVI Business Companies Act“ continued.

Speaking about the Private Trust Companies Regulations, the Deputy Managing Director of the Commission Mr Kenneth Baker said the following:

1) The Financial Services Commission recognizes it is appropriate for some companies that act as trustee or provide other trust related services, to be exempted from the licensing requirement under the British Virgin Islands Banks and Trust Companies Act, 1990.

2) The BVI has permitted the use of private trust companies since the Banks and Trust Companies (Application Procedures) Directions, 1991, but, after 15 years, these could not serve as the requirements and needed the update.

3) Some years ago, the BVI branch of STEP submitted a proposal for updating the 1991 exemptions, but it was decided by BVI FSC that the proposals did not fully address its regulatory concerns. However, last year the Commission reviewed its intention of establishing a new regime for private trust companies.

Further on, Mr Baker outlined the legal framework for the private trust companies, including Financial Services (Exemption) Regulations 2007, BVI Business Companies (Company Names) Regulations 2007, and BVI Business Companies (Amendment of Schedules) Order 2007.

Other presentation points are the definition of a Private Trust Company (PTC), what types of trust business can be conducted by a Private Trust Company, definition of trust, unremunerated and related business; obligations on PTC, role and duties of registered agent, records held by him, and the reasonable steps that must be taken by a PTC.

Mr Kenneth Baker concluded that the initial reports from the BVI private sector indicated that the private trust company exemption regime is proving to be very popular, and that this is a direct result of the hard work that has gone into marketing this product.

Monday, October 22, 2007

Kenneth Baker of BVI FSC Speaks on Amendments to BVI Business Companies Act

On October 16, the BVI Financial Services Commission published two presentations of Kenneth Baker, - the organization's Deputy Managing Director, working in the Regulation area. The remarks by Mr Baker dated October 2-4 contained some new information on the amendments to the BVI corporate legislation, and on the Private Trust Companies Regulations.

In his BVI Business Companies Amendment Act Speech, Mr Baker spoke about the amendments implemented by the BVI Government and the Financial Services Commission. He informed about the new section of the BVI Business Companies Act under which the Company Law Review Advisory committee will be established, with representation from the Government and the private sector. The main functions of the committee will be keeping BVI Business Companies Act under review, making recommendations to the Commissions on the possible changes, and on the development and reform of company law in the British Virgin Islands.

The BVI Business Companies Act, at the beginning of 2007, completely replaced the BVI IBC Act established as the principal corporate law in December 2004. Now the BVI BC Act is considered to stay in the forefront of BVI companies legislation, but to remain in this status it should be amended as necessary. In his presentation, Kenneth Baker named the last amendments to the Act as:

  • BVI Business Companies (Amendment) Act, 2006;
  • BVI Business Companies (Amendment of Schedules) Order, 2006; and
  • BVI Business Companies (Amendment of Schedules) Order, 2007.
In his presentation, Mr Baker gave brief summary of the effects of some of these amendments, and changes concerning Business Companies. In conclusion, he said that the Commission's last statistical bulletin maintains its popularity with 2007, which is expected to be a record year for incorporation.

The last amendments to the Business Companies Act announced by BVI FSC simplified the procedure of transfer from bearer share companies to non-bearer share companies. The current changes are made based on the feedback from the private sector, from international clients and professional intermediaries.

Friday, October 19, 2007

PricewaterhouseCoopers Opens its Office in BVI

This month, PricewaterhouseCoopers (PwC) has opened its office in the British Virgin Islands. The work of the BVI office will be concentrated on investigations, forensic accounting, insolvency, restructuring, solvent wind up of companies, schemes of arrangement and business continuity.

Senior Partner of PwC Cayman Nick Freeland explained that the firm's global client base will benefit from the firm's long presence in the market. He noted that the BVI market is evolving, with an increasing demand for experts that can effectively manage critical and complex business issues and crises. The partnership will initially focus on advisory services in BVI, and the PwC East Caribbean Partnership will continue to provide other Advisory services to Government, and select domestic clients from Barbados.

PwC's team at the BVI office will be lead by Nick Carter, BVI resident and licensed insolvency practitioner, who has much experience in both the accounting and legal aspects of corporate securities, turnarounds, restructuring and insolvency, being qualified as a lawyer and accountant, and has been involved in many assignments across the globe and in multiple industries.

Monday, October 15, 2007

Chinese FDI Reaches US$47.2, BVI Among the Most Active Investors in the first 9 Months

The Ministry of Commerce of China has released new figures for Chinese FDI during the first nine months of 2007. By the new information, Foreign Direct Investment level in China continued to rise, having reached US$47.2 billion, and increased by 10.87% if compared to the same period last year. During the first three quarters of 2007, about 28,206 foreign-funded companies were founded- just 6.05% less than the amount founded during 2006. However, in September Chinese FDI declined by 2.36% to US$5.27; in that period, 3,358 foreign-funded companies were established, decreasing by 11.49%.

The last FDI report published in September confirmed the leading positions of the British Virgin Islands among foreign direct investors in the economy of China. This month, British Virgin Islands, again, were among those countries that were most active in investments in China, - Hong Kong, Republic of Korea, Japan, Singapore, U.S., Cayman Islands, Samoa, Taiwan and Mauritius. During the first three quarters, the investment from these countries including BVI accounted 86.73% of the total FDI level in China.

Thursday, October 11, 2007

BVI Moves Towards Achieving Category 1 Registration Status

The British Virgin Islands will probably change its vessel registration status from Category 2 to Category 1 within the Red Ensign Group. At the current moment, British Virgin Islands have the status of tax neutral Category 2 Red Ensign port of British Registry operating under the authority of the Merchant Shipping Act, 2001. At the Red Ensign Group (REG) Conference that was held in Guernsey in summer it was announced that the Secretary of State for Transport has agreed to upgrade the British Virgin Islands Shipping Register (VISR) to Category 1 status limited to general cargo ships.

In 2006, the BVI government launched the VI (Virgin Islands) Shipping Registry, which was created out of a merger of the Shipping Registry Division of the BVI Financial Services Commission, with the Marine Services Unit of the Ministry of Communication and Works. Forming of the Registry, which falls administratively under the authority of the Chief Minister's office, means that one of the final conditions required for BVI to operate as Category 1 Shipping Registry is fulfilled.

A change of registration status would lift the current tonnage restrictions on vessels that may be registered under the BVI flag, and provide the new possibilities to the jurisdiction in the merchant shipping arena benefiting.

The BVI government is planning to find the resources needed to create the infrastructure required for the change in status during the period of 2003-2007. Probably, the new status will be formally received before the end of 2007, and then BVI will join the ranks of Bermuda, the Cayman Islands, Gibraltar, the Isle of Man and the United Kingdom.

Sunday, October 07, 2007

Premier Hon. Ralph T. O'Neal Summarizes Financial Situation in the Territory

Since the time when the Virgin Islands Party (VIP) defeated National Democratic Party (NDP) in general elections 2007, VIP continues to publish information about all the things which could be done better by NDP, which was the ruling party from 2003 till 2007, and which VIP is going to improve now. So far, VIP has touched upon spheres not connected directly to offshore financial industry (health, tourism, building industry), but some of future corrections may be related to the BVI financial services industry.

However, the ruling party is unlikely to criticize the BVI financial services industry, which was not less successful in the past 4 years as in the previous years, also the main regulator – BVI Financial Services Commission – was established in the previous period when VIP was the ruling party – in 2001. Anyhow, in this transitional period after the elections we will follow the process of the change of the ruling party, and how it can influence upon the Financial Services Industry. Now back to the Premier's address.

In his speech of September 19,2007, Premier Hon. Ralph T. O'Neal has addressed BVI community with information on some 'mysteries' that should be unraveled yet.

The main subject matter of Premier's talk was the situation around the project of the Virgin Islands Party Government - the Peebles Hospital. Premier explained that the work with this project came to a full stop after June 16, 2003. On May 2, 2006, the Minister of Finance, Health and Social Development was asked to inform the Honourable House of the names, scope of works and amounts of each contract that was stopped or not allowed to be performed by the Government of BVI.

Further on, the Premier in his speech got more in detail that the firm BCQS was contracted by the preceding Government in 2001, to provide project management services on the new Peebles Hospital Project. The project was placed on hold in order to conduct further financial studies; it was signed at a cost of $3.6 million to be spent over a three year period. At the time when the project was stopped, total amount of more than $1,4 million was already paid – about 50% of the amount of the contract, while only 20% of the actual work was completed. In addition to the sums expended, the closing cost was in the amount of more than $118,000, and the annual cost for services including management for all projects under the Ministry of Health and Welfare was $155,000.

The Virgin Islands Party Government negotiated with an architectural firm of Page Southerland and Page to design and produce the working drawings for the new Peebles Hospital. Hon.Ralph O'Neal noted in his speech that his National Democratic Party paid the same Architectural firm about $3,000,000 to re-design the hospital, while the Virgin Islands Party Government had designed for a total of $75,000,000.

The Premier is going to lay a copy of five development agreements of such a kind on the Table of the House of Assembly. He was informed that before signing these agreements, each prospective investor or developer was required to sign a contract to engage the services of a particular individual, for a fee of $7,500,00 a month.

Hon. Ralph O'Neal added some words about the financial situation concerning the BVI Tourist Board, and looked into the whole financial situation of the territory., saying about the possible deficit of 13,000,000 in 2007. The Premier informed on his intention to have a detailed report of the territory's finances.

Thursday, October 04, 2007

BVI the 3rd in 9 Months' Statistics for Vietnam FDI

The Foreign Investment Agency of Vietnam published FDI results for the first nine months of 2007. The amount is estimated at $9.6 billion, - that is 38% increase compared to the same period last year.

The official at the ministry's Foreign Investment Agency informed that, this year, Vietnam is expected to attract 12 billion USD in new foreign direct investment. The main FDI source during the first nine months was The Republic of Korea, with 311 newly approved projects worth more than 2.1 billion USD, the amount that makes 25.4% of the total. As in the FDI report published a month ago, British Virgin Islands is in the third place, with 39 projects valued at $1.23 billion. The second place in the ranking belongs to Singapore, with its 67 projects for 1.38 billion USD. The forth and the fifth positions, immediately after BVI, are taken by Taiwan with US$629.7 million, and India with US$623.1 million.

Tuesday, October 02, 2007

Hon. Ralph O'Neal Speaks About Financial Situation in the BVI Tourist Board

Hon. Ralph O’Neal, the new premier of the British Virgin Islands, which also holds responsibility for tourism, has temporarily banned traveling overseas by employees of the BVI Tourist Board. The purpose of this measure is to prevent further depletion of the statutory body's financial situation.

Addressing the territory's community, Premier O'Neal suggested that the BVI TB needs tighter fiscal management. He said: “There is no doubt, my dear people, that the financial situation with the Tourist Board is grim and in order to prevent the situation becoming worse I had to put a ban on traveling of the employees until I could get a clear picture of the whole situation, I am aware that some things are already paid for especially in the American and European markets and once proper representation is made I am prepared to allow that.”

Further he explained that the BVI Tourist Board, which was very important function of advertising and promoting these islands as a tourist paradise, in the year 2006 was instructed to spend $1,696,891 from their operating budget in capital works, such as the Queen Elizabeth Park, Gun Creek Project phase one, Architectural and management fees. Up to June 2007, the Tourist Board spent the amount of $730,222. These amounts were to be refunded by the Central Government.

It should be said that in the last years, a lot of work was done for popularization of the British Virgin Islands not only as business centre but also as the centre of tourism. It is not a secret that BVI economy depends to a large extent on touristic and financial services sectors, and expenses on marketing may be quite large.