Friday, October 31, 2008

Two Tax Agreements signed by BVI and United Kingdom

During the OTCC Meeting held in London on October 28-29 the Premier of the BVI Ralph O'Neal and UK Foreign Office Minister Gillian Merron signed Tax and Information Exchange Agreement (TIEA). This document was signed, along with double taxation agreement with the United Kingdom, on October 29, just some days after similar agreement was signed by the governments of the British Virgin Islands and Australia.

The TIEA signed by the BVI and UK officials provides for exchange of information on request concerning tax matters under criminal or civil investigation. This is the third TIEA signed by the BVI, - after the agreements with the US (2002) and Australia.

Ralph O'Neal commented on the signing of the Agreement saying that “The conclusion of this TIEA demonstrates the commitment of both the BVI and the United Kingdom governments to international co-operation in transparency and exchange of information... The BVI will continue to foster and develop international best practice in all areas of financial regulation.”

Also, during the OTCC forum the British Virgin Islands and the United Kingdom have signed an agreement for the avoidance of double taxation with respect to income tax. The agreement will bring substantial benefits to the residents of both countries.

Both tax agreements will come into force as soon as both governments complete legislative procedures needed to give them effect.

Along with the BVI, the OTCC meeting is attended by goverment delegations from several other British offshore territories in the Caribbean region, and the UK is to sign tax agreements with some of them.

Wednesday, October 29, 2008

BVI and Australia Governments Sign Tax Information Exchange Agreement

The Premier of the British Virgin Islands (BVI) Hon. Ralph O’Neal and the Australian Assistant Treasurer and Minister for Competition Policy and Consumer Affairs Chris Bowen signed Tax Information Exchange Agreement (TIEA), which provides for full exchange of information on request in both criminal and civil tax matters.

The document is based on the existing legislation in both countries, already providing for mutual legal assistance in criminal matters. Now both governments will share information to eliminate harmful tax practices. The agreement reflects the commitment of the governments of Australia and BVI to implement OECD principles of transparency and effective information exchange, and international standards on anti-money laundering and counter-terrorism financing. The Australian Government has welcomed the BVI admission as a full member to the International Organisation of Securities Commissions, where it joins more than 100 jurisdictions with recognised high standards of regulation and compliance.

According to the TIEA, Australia and the BVI have agreed not to apply prejudicial or restrictive measures based on harmful tax practices to residents or nationals. Australia will not refer to the BVI as a 'tax haven' on the governmental level, and instead it will list the jurisdiction in the Taxation Administration Regulations 1976 as an 'information exchange country'. As a result of the changed status of the BVI, its residents will receive access to reduced withholding tax rates on distribution of certain income they may receive from Australian managed investment trusts.

This is the fourth Tax Information Exchange Agreement for Australia as one of the leading countries implementing international co-operation on tax matters, and the second for the BVI.

Also, Australia and the BVI have signed an agreement for the allocation of taxation rights with respect to certain income of individuals, which will provide benefits to Australian and BVI residents. Both countries also agreed to enter into discussions to develop further co-operation in areas of mutual interest.

Ralph O'Neal in his comments welcomed Australia's recognition of the high regulatory standards set by the BVI, and the continuing engagement of the financial centre in the OECD’s Global Forum on Taxation.

Monday, October 27, 2008

Tenth OTCC Meeting Hosted in London

Recently appointed Foreign Office Minister Gillian Merron hosts the 10th meeting of the Overseas Territories Consultative Council (OTCC) in London, on October 28 and 29. The OTCC is a key annual event in the British Government Overseas Territories calendar, which is held each year in London. During these meetings, the heads of Britain's Overseas Territories governments and their representatives are discussing policy issues with a team of British Government Ministers.

The issues that will be discussed on the agenda of this year's council cover a range of current economic issues and global crisis; financial services regulation; human rights, prospects for the relationship between the European Union and the Overseas Territories; the environment and disaster management.

Gillian Merron who leads the British Government team is joined by some other members of Parliament. Opening the OTCC, Gillian Merron said, “the forum is a critical part of debate and decision-making between the UK and the Overseas Territories. We've got a great deal to discuss – from financial services to human rights - I’m looking forward to getting down to the business of ensuring continuing close relations and the security and prosperity of the OTs."

The proceedings of this OTCC will include the signing of a new Tax Information Exchange Arrangement between the UK and the British Virgin Islands.

The Overseas Territories Consultative Council was established as a result of the 1999 White Paper Partnership for Progress and Prosperity on the UK's relationship with the Overseas Territories.

Friday, October 24, 2008

BVI Confirms Its Ranking Among Top Global Financial Centres

British Virgin Islands confirmed its presence in the list of the top 30 countries in the Global Financial Centres Index (GFCI), published by the City of London on September 25. The index is updated every six months, and it is the fourth time when it is published, based on fourteen factors of competitiveness grouped into five key areas – people, business environment, market access, infrastructure and general competitiveness. BVI was first time included in the list in March 2008, ranked in the 27th place among 69 leading international finance centres. The press release published by the BVI FSC on October 10, reaffirms BVI status as top global financial centre in the fourth GFCI, based on nearly 24,000 assessments from business professionals worldwide.

Since March, individual rating of the BVI has increased, going up from 574 in March to 584 in the September report, and showing the improved overall perception of the BVI. Now the jurisdiction ranks 29th among 59 centres.

It is noted in the press release by the FSC that this version goes into less detail than the last index published half a year ago, that placed BVI among the most stable offshore jurisdictions like Hong Kong, Zurich and the Isle of Man. The report cites published by the City of London stress the importance of the regulatory environment which includes taxation as the most important factor in the competitiveness of offshore centres.

Robert Mathavious, MD/CEO of the BVI FSC, said that “in these challenging times, it is good to know that practitioners across the world continue to view the BVI as a leading global finance centre.” By his words, he is also proud that the BVI FSC was “the first ever regulator to be accepted as an ordinary member of the International Organization of Securities Commissions (IOSCO).”

Tuesday, October 21, 2008

New Minister Appointed for UK Overseas Territories Including British Virgin Islands

The United Kingdom has appointed Gillian Merron as Parliamentary Undersecretary of State for the Foreign and Commonwealth Office, the appointment being effective October 5, 2008. Gillian Merron has succeeded in this post Meg Munn who quitted government service, and her responsibility will be the administration of the United Kingdom Overseas Territories - the Caribbean, including the British Virgin Islands, South America, Central America, Australasia and the Pacific region.

Previous post of Gillian Merron was Parliamentary Undersecretary of State for International Development. Merron has been the member of Parliament since 1997. In her new post, she has become one of the five members of ministerial team at the Foreign and Commonwealth Office, headed by Foreign Secretary David Miliband.

Saturday, October 18, 2008

BVI Ports Authority to be Managed by the New Team

The BVI Government has approved a seven-member board to manage the British Virgin Islands Ports Authority, Mr. Ronnie Lettsome being the new chairman for a three-year term. Other members of the BVI Ports Authority were appointed to the board with different terms: Mr. Franklin Walters will serve the same three-year term as the chairman, Mr. Gregory Adams and Mr. Maxwell Smith will serve for two years, Mr. Kent Bernier and Ms. Patricia Romney have been appointed for one year.

The Managing Director of the BVI Ports Authority Board, Permanent Secretary in the Ministry of Communications and Works, and the Financial Secretary were appointed ex-officio members of the board. All the appointments took effect on July 23.

The BVI Ports Authority was established in 1990 as a corporate entity, and began its operations in 1991. Its main purpose is to provide and maintain the required harbour and marine infrastructure and facilitate the safe, efficient and effective use of ports in the BVI Territory. Starting from July 2008, the BVI Ports Authority enforced harbor charges for vessels entering and staying in the territorial waters of the BVI.

Monday, October 13, 2008

BVI Government Lifts the Ban on Cell Towers Construction

Next day after the announcement by Minister of Communications and Works Hon. Julian Fraser that BVI government lifted the stop of cell sites construction in the territory, Digicel BVI Ltd began the process of relocating the first of several cellular site in the BVI in areas of concern identified by the BVI community.

The BVI government placed a stop order on any further construction of mobile towers on 26 June this year, and construction work was frozen for three months as government organized several meetings between all three licensed telecommunications operators - Cable & Wireless, CCT Global Communications and Digicel – to agree on a tower sharing strategy. The Ministry for Communications and Works and the Telecommunications Regulatory Commission from their side participated in the meetings.

The last meeting of the three mobile providers was held on 26 September, at the invitation of Hon. Julian Fraser who facilitated it with the purpose to review mobile operators' strategy and agreement on co-location of towers in the territory. The mobile operators have agreed on sharing approximately 20 cellular tower sites, and some additional locations are currently undergoing technical evaluation concerning their ability to support co-location.

So, following consideration of the progress made by BVI government and the commitment by the operators achieved in the series of meetings and negotiations, on Monday Minister Fraser announced the decision to lift the freeze. The approval of the mobile tower sharing strategy allowed the recommencement of the construction of mobile towers in BVI.

The benefits of the tower sharing strategy and implementing recently developed DRAFT planning guidelines are minimization of the proliferation of cell towers throughout the territory (which was the problem of the community), and providing mobile operators the ability to improve their coverage profiles.

Wednesday, October 08, 2008

New Yacht Storage System Introduced in the BVI

The largest full-service marina and boatyard in the British Virgin Islands has introduced a new yacht storage system for hurricane storage that will increase the safety of yachts stored. By this system, Nanny Cay Marina has received the status of an approved hurricane storage facility by one of the world's leading insurer of luxury yachts, Pantaenius.

Nanny Cay is the first boatyard in the Caribbean Windstorm Exclusion Area (CNWEA) with this yacht storage system for hurricane storage. The British Virgin Islands are in the middle of the CNWEA, and from 1 July to 15 November, in the season of hurricanes, yachts generally go south of latitude 12.4N to maintain insurance coverage.

Thursday, October 02, 2008

Premier Forecasts Long-Term Effects of US Financial Issues on BVI Economy

While the U.S. government tries to minimize the effects of large-scale financial crisis on its citizens, BVI proves to be one of the countries whose economy can also be affected by the problems in the U.S. financial system. However, by words of Hon. Ralph T. O’ Neal, Premier and Minister of Finance, the BVI has not yet been afftected because its commercial banks have not been involved to the sub-prime crisis and subsequent credit. Financial Services Commission has not reported any fallout because of the financial crisis in the U.S.

The Premier noted that BVI economy, based on tourism and financial services sectors, is highly dependent on the US and Europe. BVI tourism is more dependent sector, while financial services are dependent just to some extent, because largest part of BVI financial business comes from Asia, which is also the major market for incorporation of offshore business companies.

Ralph O'Neal said that the BVI government is concerned over the long term effects, because “given the depth of the financial crisis the BVI's financial services industry could also be affected.” He noted that the financial crisis has already resulted in the U.S. economy recession, and the recessions in the United Kingdom and Europe are very probable, followed by unemployment and inflation.

The recession can affect consumer and business confidence, spending and financing, which directly impact the economy of the BVI. Premier O'Neal also explained that “the global credit crunch could affect the Government's ability to secure overseas financing and borrowing locally could hamper private investment.”

In the beginning of this week, investors still expected larger bank turmoil, and banks continued to put aside cash. The Federal Reserve and other Central Banks of the U.S. are working on measures to make billions available to troubled banks, and solve the financial problem that continues to move ahead.