Monday, March 31, 2008

BVI FSC Publishes Statistics on Financial Sector Activities in 2007

Last week, we discussed the new bulletin issued by the BVI FSC, including the analysis of financial services and convincing statistics on ever increasing number of offshore companies registered in the British Virgin Islands during the year 2007. The new record of 77,022 new companies registered in 2007 overpassed the record of the previous year.

Other statistics included in the report concerned banking & fiduciary services: in 2007, 3 licences were granted for Class I Trust (cumulative number is 98), 1 license for Class III Trust (3 in total), and 5 for Restricted Class II Trusts (107 in total).

The investment business industry statistics for the year 2007 has shown the record number of Professional annual licences and certificates granted- 317, compared to 282 licences granted in 2006. Also, 87 Private and 17 Public licences were granted in 2007; 64 new Managers were registered in the jurisdiction.

Legal & Enforcement Division Statistics includes also information for the last quarter of 2007, and cumulative figures for the years 2007 and 2006. The number of International Cooperation Matters in 2007, including formal and informal requests, was 69 (14 for Q4 2007), compared to 53 for the year 2006. There were 10 Enforcement Matters in 2007 (8 in Q4 2007), compared to 30 in 2006; and 1 Advisory Warning.

As regards the Insurance statistics for the year 2007, it was reported on 392 Captive Insurers, 31 Domestic Insurers and 20 Insurance Managers.

The BVI FSC published statistics on the Segregated Portfolio Companies registered in 2006 and 2007 years. In 2007, 27 professional mutual funds were registered in BVI, compared to 13 in the previous year. Also, there were 8 private and 9 public funds registered in 2007.

Wednesday, March 26, 2008

BVI company formation statistics sets new records: BVI FSC Publishes Statistics Bulletin for year 2007

BVI Financial Services Commission has published the ninth volume of its Quarterly Statistical Bulletin. The document provides figures, information, statistics and analysis of financial services activities in the year 2007.

In 2007, the record amount of 77,022 new companies was registered in the British Virgin Islands. Until now, the record years were 2006 with 65,284 companies, and the year 2000 with approximately 64,000 companies registered. By the amount of offshore companies registered, BVI confirmed its status of leading offshore jurisdiction.

By the estimation of BVI FSC, of 851,595 companies registered on the territory by the end of last year, 404,321 had the status of active company, - meaning that almost 50% of all the companies ever registered in the BVI are actively working until now. It is worth saying that BVI IBCs have been actively registered already for 23 years, starting from 1985, and actually there are not so many onshore companies successfully working for such a long time. In 2007, there were 53,988 dissolutions registered in the BVI, which means that the number of active BVI companies has increased by 23,034. 471 out of 404,321 active BVI companies are limited partnerships. The following table shows dynamics of BVI company formation in the BVI for last 5 years.

YearBVI companies incorporated in particular yearTotal number of BVI companies at the end of year
2002
535,178
200347,734582,986
200460,668643,718
200558,337707,392
200665,284774,573
200777,022851,595

Below, you can see the chart showing dynamics of BVI company formation in the years 2002-2007, and the total amount of entities registered in the offshore jurisdiction by the end of each of the years.





















In 2007, there were 18% more BVI companies registered as compared with 2006. BVI company formation statistics of previous year showed 12% year-to-year increase.

Thursday, March 20, 2008

BVI Offshore Service Providers Launching New Services and Adding Corporate Officers

Harneys Corporate Services Limited, a trust company based in the British Virgin Islands, and the largest provider of administration services to the BVI Business Companies, has announced on March 14 the launch of a new Share Trust service in BVI. The Share Trust is to enable a simple, modern and cost-saving solution to succession planning involving shares in the BVI Business Companies. Its main point is automatic succession to the shares of the company and appointment of replacement directors in the event of shareholder's death or early incapacity.

By words of Harney's senior associate Zac Lucas, "Succession planning involving shares in a BVI Business Company was usually a complex and costly affair, involving lengthy legal documents and significant delays. The Share Trust was specifically designed to remedy these problems."

Some days later, Walkers, one of the leading global offshore law firms and the second largest offshore law firm in the BVI, announced that it has added three corporate lawyers in its BVI office. The firm invited new staff to cope with the increased volume of work in the British Virgin Islands in the spheres of corporate finance, mergers & acquisitions, investment funds, and private equity work.

The new BVI legislation, allowing for quick and flexible merger arrangement and available for both domestic and international mergers, led to an increased amount of mergers & acquisitions. As to Walkers' BVI office, it has been involved in several corporate deals for major global companies. To manage this work, the firm has invited Matthew Cowman and Stuart Baldwin who specialize in project and acquisition finance and corporate transactions, and Phillip Sacks - an advisor on a variety of investment funds, private equity, and general corporate and commercial matters. All these lawyers have worked with corporate and law firms in the UK, Australia, Bahrain and the Caribbean for more than 20 years.

Another sphere that benefited from the flexibility of the provisions of the BVI Business Companies Act are BVI investment funds and private equity funds. In response to this, Walkers established an Investment Funds and Private Equity Department in its BVI office with the doubled number of funds lawyers.

Monday, March 17, 2008

BVI government announces transition to accrual accounting

BVI Financial Secretary Neil Smith said on March 16, 2008 that the territory is adopting accrual accounting policy, which determines revenues and expenses when a debt is incurred rather than after a payment is made. The switch from cash accounting to accrual accounting system will take two years.

Accrual accounting is preferred by the private sector, and is recommended by international accounting experts to ensure highest reliability. It is increasingly adopted by the world's governments.

Neil Smith said in his statement: “the government is the largest business in the territory, and it needs high quality financial information with which to manage itself ... Cash accounting is simply too poor a system to deliver that quality of information."

Tuesday, March 11, 2008

BVI Included in the List of Leading Financial Centres

Some days ago, the British Virgin Islands were for the first time included in the Global Financial Centres Index published by the City of London; thus, the status of the BVI as an international financial centre was confirmed.

The Global Financial Centres Index is based on about 19,000 assessments from business professionals worldwide, - including sensitivity to changes in people, business environment, market access, infrastructure and general competitiveness. The other important factor is how consistently different respondents think of one centre, also one of the most important criteria is the regulatory environment of the territory. The BVI is ranked 27th among 69 leading international finance centres. Respondents also noted the stability of the jurisdiction, having placed it by this factor just behind Zurich, Hong Kong and the Isle of Man.

Robert Mathavious, Managing Director / CEO of the British Virgin Islands Financial Services Commission, has positively evaluated the confirmation of BVI's status as a leading global finance centre by practitioners from across the world. He also said that the BVI has taken the necessary measures to protect its integrity and reputation as a well-regulated international finance centre, and to deter and confront financial crime.

Further on, Robert Mathavious talked about the enhancement of regulatory regime, by supplementing new anti-money laundering legislation “setting out procedures for identification, recording and reporting of transactions, and by publishing a detailed anti-money laundering and terrorist financing code of practice”. Also, he mentioned the extensive handbook on international co-operation and information exchange that was published for law enforcement officials and regulators, with the purpose to explain the statutory mandates and regulations established in the BVI to foster and improve international co-operation.