BVI Invest Agency to be Created in the British Virgin Islands

Junior Minister for Trade and Economic Development announced the launch of an investment promotions agency, which will work to attract foreign investment to the BVI territory. The agency called BVI Invest will be included in the Caribbean Association of Investment Promotion Agencies (CAIPA), a network of similar governmental departments across the region.

The establishment of the new agency was announced during a 5-day course held in the British Virgin Islands to train regional governments on methodologies for investment project formulation and appraisal, technical assistance, networking and making use of investment practices. The course was held in co-operation with CAIPA and the United Nations Industrial Development Organisation, and is focused on international accepted methodologies. 

Also, Minister was talking about the BVI efforts to diversify and digitise its economy and the need for investment in human resources. She said that the software would help the BVI to compute financial statements needed to appraise investment projects and their possible economic benefit to the BVI territory.

Premier Commented on the Impact of HK Protests on BVI Financial Services Industry

BVI Premier Andrew Fahie stated that the BVI financial services industry have had a minimal impact from the recent political protests in Hong Kong; answering the question from the Opposition in the House of Assembly, he stated that neither the financial industry itself nor the British Virgin Islands as a jurisdiction of choice were influenced significantly, due to the fact that most protests are announced ahead so that authorities and media know the potential obstacles in advance.

According to Premier, economic losses following those protests are minimal. Regarding BVI House Asia set up in HK with the purpose to promote jurisdiction’s financial services, he said that “most business entities in the financial sector have continued as usual, including BVI House Asia.” He acknowledged that the protests have created practical inconveniences locally for those working in the branch offices of BVI law firms and other corporate service providers, however, the government’s strategy will continue to be constant monitoring of the situation and any significant changes in the financial situation that could influence the usage of BVI financial services. The BVI House Asia is providing weekly updates on the situation to the International Affairs Secretariat, the Premier’s Office and BVI Finance.

China, Hong Kong and Macau invest more than 40 per cent of the US$1.5 trillion going through approximately 400,000 BVI-registered companies.

Final Economic Substance Requirements Issued by BVI International Tax Authority

The BVI International Tax Authority has finalized the regime of new economic substance rules. The new rules, effective from the beginning of 2019, are included in the Economic Substance (Companies and Limited Partnership) Act, 2018.

According to the new requirements, which are effective in the large part of the European Union, and which have been supported by OECD BEPS Inclusive Framework members, the companies tax resident in a low or no tax jurisdiction and engaged in key activities identified by the EU, in order to access the tax regimes of the territory are obliged to meet minimum substance requirements as part of their annual tax return. 

In some business sectors, activities generating income must be primarily conducted with qualified employees and operating expenditure in the jurisdiction. Among the main activities identified by the European Commission Code of Conduct Group there are banking, insurance, financing and leasing, fund management, shipping, intellectual property, and holding companies whose income is generated from any of the above activities.

For each of the core activities standards vary to reflect the different needs of the companies involved, and are to ensure that there are sufficient activities undertaken in the relevant jurisdiction to reflect the amount of profits accounted there. The substance requirements will include being able to demonstrate that the company is directed and managed from the relevant jurisdiction, has physical office and sufficient level of employees and annual expenditure.