BVI Highly Ranked in Vistra Report

In this year’s Vistra 2030 report, which is released every two years by the global corporate services company, the British Virgin Islands ranked highest among offshore financial centres, although it declined when compared to onshore jurisdictions, and achieved a rating of 2.94, down from 3.3 in the previous report in 2018.

The report is based on 620 interviews with industry experts, where they rated the importance of each jurisdiction. This year, forty-three percent of respondents expected offshore centres like the British Virgin Islands to continue declining as a result of reduction in demand for offshore financial services. The jurisdiction lost 1.1 points in this rating, since it was first ranked 10 years ago. 

However, it is noted by Vistra that the BVI has proven to be very resilient: “In the current climate, the BVI’s role as a neutral intermediary cannot be overstated. Clients can swiftly set up new BVI structures that are globally recognised and accepted for international business.. Many such clients are from emerging markets, and it can be helpful for them to use intermediary structures, particularly at a time of international tension.” According to the report, 75 per cent of HK’s Hang Seng Index consists of companies directly linked to the BVI.

The report states that “Jurisdictions such as BVI, Cayman, the Channel Islands and Bermuda will still be thriving 10 years from now.”

BVI Government Confirmed its commitment to Public Register of Beneficial Ownership

The government of the British Virgin Islands has approved the commitment to introduce public registers of beneficial ownership for BVI-incorporated companies. Andrew Fahie, the Premier and Minister of Finance of the jurisdiction, informed the House of Assembly that the government would work towards a publicly accessible register of beneficial ownership for companies.

The Premier also emphasized that the progress of this issue would be “in line with international standards and best practices as they develop globally” and would aspire to match the EU’s most recent anti-money-laundering directive. He also said: “In advancing this commitment, we will be informed at all times by global best practice at the time within a timeframe that we consider deliverable.”

According to the Foreign Office Minister for the Overseas Territories and Sustainable Development, the BVI would be adopting public registers by 2023.

BVI Appears on EU “White List” of Jurisdictions

The British Virgin Islands became one of 16 countries placed on EU white list, which was revealed in the last weeks of February. The jurisdiction was whitelisted partially due to economic substance legislation enacted at the end of 2018, which allowed the BVI to be placed on the EU’s “Annex II” of jurisdictions with “pending commitments.” The deadline extensions were granted to give time to the British Virgin Islands to pass the needed reforms to fully comply with co-operation standards. Thus, the country avoided being placed on “Annex I” (the blacklist).

BVI Premier Andrew Fahie welcomed the decision of the European Union, having said in his statement: “This is as a result of close cooperation and positive dialogue with the EU and demonstrates the BVI’s commitment to meeting and surpassing international standards.” He also added that he and his government “remain completely focused on ensuring the continued success of our international business and finance centre and its role in the global economy. We believe there will be significant opportunity for our territory and our people as we enhance our economic substance yet further.”

The 16 new whitelisted jurisdictions, along with the Virgin Islands, are Antigua and Barbuda, Armenia, the Bahamas, Barbados, Belize, Bermuda, Cabo Verde, Cook Islands, Curaçao, Marshall Islands, Montenegro, Nauru, Niue, St. Kitts and Nevis and Vietnam.

New Volume of Statistical Bulletin Published by the Commission

The BVI Financial Services Commission has issued the fifty-fourth volume of its Statistical Quarterly Bulletin, providing information about the financial services activities in the jurisdiction in the first quarter of 2019.

According to the Registry of Corporate Affairs, 7,214 new companies were incorporated in BVI in the first quarter of the year, which is 19.09% decrease compared to 8,916 in the fourth quarter of 2018 and 26.37% decrease compared to 9,798 in the first quarter of 2018. Total cumulative number of registered BCs as at 31 March 2019 was 408,838. Also, in the first quarter of 2019 there were 12 new Private Trust Companies, 1 Segregated Portfolio Company, 1 Foreign Company registered, along with 80 continuations. 

There were 56 new Limited Partnerships (LPs) formed in Q1 2019, which is a 80.65% increase when compared to 31 formed Q1 2018, and a 51.35% increase in the number of LPs formed in Q1 2019 when compared to 37 LPs formed in Q4 2018. Total cumulative number of active Limited Partnerships was 977 as at 31st March 2019.

In the first quarter of 2019, there were 57 new applications to register new Trade Mark, which is an increase by 21.28% when compared to Q1 2018, and a decrease by 1.72% when compared to Q4 2018. According to Banking, Insolvency and Fiduciary Services statistics, there were 6 new General Banking Licences and 1 Restricted Class 1 Banking Licence issued in the first quarter of 2019. The banking sector’s total asset size in this quarter at approximately US$2.43 billion is comparable to Q4 2018’s performance of US$2.37 billion. 

International Cooperation statistics records the number of incoming and outgoing requests for information, classified as formal or informal. In the first quarter of 2019, there were 15 formal and 5 informal incoming and no outgoing requests. Further information and statistics is available at the website of the Financial Services Commission.

First BVI Africa Trade Mission to be Held in November 2018

BVI Premier and Minister of finance, Dr Orlando Smith, will be leading BVI Africa Trade Mission which will take place for two weeks from November 5 to 16 of 2018, and will include South Africa, Kenya and Nigeria as the largest business centres in the region. The BVI has a considerable stock of direct investments on the continent, and it is expected that the visit will enhance and deepen business relationships between BVI and African countries.

Dr Smith will be the head of the delegation which includes BVI Finance team and the Africa Expert Network (AXN), BVI Finance’s consultants for the mission. The mission itself is similar to the Asia Trade Mission and consists of high-level meetings with government officials and private sector meetings. 

The BVI mission will also hold three mini conferences in Cape Town, Nairobi and Lagos, which will provide an opportunity for the delegation to promote the products and services of the BVI jurisdiction, such as private equity and venture capital offerings, investment funds and trusts, as well as time proven BVI business companies and recently unveiled micro business company.

BVI Financial Services Industry Continues Functioning

According to the leaders of the British Virgin Islands financial services industry, there is no loss of confidence in the businesses, despite the severe damages done to the territory by Hurricane Irma. Head of Business Development and Marketing department in BVI Finance, Gary Hales, said: “Generally, people are still comfortable using the BVI. By way of example, there are three potential funds which are still looking at the possibility of using BVI… There is no sense of loss of confidence or business, so the BVI is definitely proving that the financial services industry is robust.”

The director of BVI House Asia in Hong Kong, Elise Donovan, confirmed that the financial services industry there is appreciative of accessibility to services; also, the Cayman Islands where all the large companies operating in the BVI are now represented, note the seamless continuation of BVI services. 

It is also important that the premises of BVI Financial Services Commission, regulating the financial industry, survived the hurricane. So, they became operational in some days, and full functionality has been restored to the online company registration portal.

Interim Executive Director at BVI Finance, Lorna Smith, said that there was a keen determination among industry partners to ensure the survival of financial services as part of the overall recovery for the British Virgin Islands.

British Virgin Islands Among Top Destinations for Offshore Investments

The research was conducted in Netherlands looking at how particular countries and jurisdictions are used by corporations to minimize their tax liabilities. It was found that the Netherlands, the UK, Ireland, Singapore and Switzerland are the five large countries most popular as intermediate destinations for corporations to access low-tax financial centres. The British Virgin Islands, Hong Kong and Jersey are the largest offshore financial centres in terms of investment volume.

The report says: "Our results show that offshore finance is not the exclusive business of exotic small islands far away... Countries such as the Netherlands and the United Kingdom play a crucial yet previously hidden role as conduits of offshore finance on its way to 'tax havens.'"

BVI Finance Presented at Africa Financial Services Investment Conference

BVI Finance, which is responsible for marketing and promoting financial services industry of the jurisdiction, showcased BVI unique propositions for Africa at the Africa Financial Services Investment Conference (AFSIC) which was held in London on 3-5 May.

This year, BVI Finance was the gold sponsor of the Conference which is a leading investment event focused in Africa's financial services sector. BVI team comprised six members of BVI Finance who engaged with stakeholders from across the continent and positioned the BVI as a leading jurisdiction for chanelling investment in and from Africa. 

Interim executive director at BVI Finance, Lorna Smith, made a presentation during a panel session entitled "The BVI Advantage" where highlighted BVI advantages as a leading partner for the region, emphasized the quality of professionals working in the BVI international financial sector, and capital flows that already exist between the BVI and Africa.

In her comments on the conference Smith said:"AFSIC was a major success for BVI Finance. We educated many influential stakeholders about the BVI and its unique advantages and made some excellent connections which will put us in good stead for the future.”

New Vistra Report: BVI Ranked as Top Offshore Jurisdiction

The 2017 edition of Vistra 2020 report was launched in Hong Kong and Singapore, which ranked the British Virgin Islands as the top offshore jurisdiction in the world. The United Kingdom was ranked first as the onshore jurisdiction, followed by Hong Kong as midshore; the BVI is in the third place, followed by the United States in the onshore category.

The report named "Vistra 2020: The Uncertainty Principle: The State of the Trust, Fund and Corporate Services Industry 2017" examines trends and factors affecting global financial services industry, in the period since the last report published in 2015. 

The Asian growth drivers of the financial industry listed in the report are supporting the BVI position as Asia's number one international finance jurisdiction. Investors from China and other Asian countries make use of the trust-related offerings of the jurisdiction to develop succession planning and secure asset protection under Virgin Islands Special Trust Act (VISTA) trusts and Private Trust Companies (PTCs). BVI trusts and wealth-planning services provide privacy, since assets are held in the trustee’s name.

Elise Donovan, director, BVI House Asia, said: “The newly licensed Bank of Asia, the first online, cloud-based bank, will launch later this year. It is poised to drive banking costs lower while increasing the level of convenience and efficiency afforded to customers opening BVI accounts.”

IMF Issued Document on CARICOM Countries' Tax Reforms

The International Monetary Fund has issued the new paper where informed that CARICOM members including the British Virgin Islands need more tax reform while having benefited from introducing VAT. In the opinion of the IMF, zero-rating of domestic supplies, generous exemptions, low registration thresholds have negative effect on the performance of VAT in the CARICOM countries, which should enhance the efficiency of their regimes.

The IMF also asked CARICOM members to pay closer attention to other major taxes: to simplify personal income tax regimes to simplify compliance and improve compliant rates; to coordinate on the design of corporate income tax systems and to tackle international tax evasion and avoidance. It also urged member countries to implement programs to strengthen IT support, audit capacity and enforcement.

BVI on the List of Countries for AEOI Consultations with Switzerland

British Virgin Islands is included in the list of the countries with which the Swiss Federal Department of Finance has launched a consultation on the introduction of the automatic exchange of information in tax matters (AEOI). The consultation will be held until March 15, 2017, and the AEOI for the listed countries is expected to enter into force on January 1, 2018, with first exchanges to start in 2019.

According to the Federal Department of Finance, the introduction of the AEOI with the new countries will confirm international commitment of Switzerland to implement the AEOI standards. 

The FDF said that these countries, which along with the BVI include Andorra, Argentina, Barbados, Bermuda, Brazil, the Cayman Islands, Chile, India, Israel, Mauritius, Mexico, Monaco, New Zealand, the Seychelles, and some others, adhere to the principle of speciality and implement appropriate measures to safeguard the confidentiality of the data exchanged.

In 2017, Switzerland will introduce the AEOI with EU member states, Australia, Iceland, Norway, Japan, Canada, South Korea, Jersey, Guernsey, and the Isle of Man.

BVI Published Information on Beneficial Ownership Agreement with UK

BVI has published the notes and technical protocols related to the exchange of information on beneficial ownership of companies agreed with the United Kingdom. According to this agreement, the countries agreed to share beneficial ownership information, and also committed to ensuring relevancy, accuracy and security of this information.

In the British Virgin Islands, this information is to be held through the electronic portal which will be accessed by BVI authorities only. On request, it will be shared with UK law enforcement agencies. The BVI law enforcement authorities will be able to request from UK law enforcement all of its non-public information on beneficial ownership.

By words of BVI Premier Dr Orlando Smith, the agreement with UK will “further enhance the BVI regime which already surpasses that of many other jurisdictions in the world. It will also ensure that in order to protect our business and the interests of BVI, when it comes to transparency and information exchange, BVI’s rules and regulations are totally fit for purpose.”

BVI Presented as Top Financial Centre at China Offshore Summit

British Virgin Islands was named the most important and most preferred offshore jurisdiction in the Asia Pacific, already for the sixth year. The survey was conducted inside and outside the region, and in respondents’ opinion BVI remains the undisputed market leader in the financial services industry.

At the 2015 China Offshore Summit, which was held in Shanghai on November 4-5, CEO of Vistra Group Martin Crawford made a presentation on behalf of BVI Finance. He said that the BVI territory held about 50 percent of the market share of new offshore companies formed globally and, of the active companies on the BVI’s registry, about 60 percent were from Asian clients. He stated that in the Global Financial Centres Index the BVI is ranked at the top of the most competitive offshore financial centres, and named some factors that help BVI remain the leader, among them legal and commercial certainty, and robust regulatory standards, being focused on “value-added” rather than pure volume.

Additionally, Crawford said that the top ten listed companies on the Hong Kong Stock Exchange and the Shanghai Stock Exchange had BVI subsidiaries.

Presentations were also made for the BVI at the Summit by group legal counsel at AMS Financial Group, Barry Mitchell, director of BVI House Asia, Elise Donovan, and managing partner in China of Harney, Westwood and Riegels, Kristy Calvert. China Offshore Summit was attended by more than 500 Chinese business leaders.

Annual BVI Asia 2015 Business Conference Held Backed by BVI House Asia

The Business BVI ASIA 2015 annual regional conference which took place on September 23 attracted more than 100 offshore industry experts and leaders from the most progressive businesses in Asia and British Virgin Islands. The conference named "Pivoting to Asia - A View Beyond the Horizon" was sponsored by BVI House Asia already for the second year.

The conference presentations included "China's One Belt One Road Regional Development Strategy: Long Term Opportunities for the Offshore Sector," made by Dr Qian Liu, director of Economics Unit, The Economist Group, Beijing; "Future Disruption in the Offshore Space: Where will the next 'Uber' come from?"; and "Emerging Wealth in China: Millionaire Households and Ultra High-Net Worth Households."

It was stated by Dr.Qian Liu that, with outbound direct investment from China having increased 35% since 2005, "Chinese companies investing in international markets want the certainty that BVI structures, backed by BVI courts and English common law, provide, rather than relying on the courts of countries in emerging markets. Second, China's fast-rising middle class will want trust funds, private wealth management and other services that the BVI can arrange. Finally, the Chinese middle class wants to spend more on tourism, a trend that began in Southeast Asia and continues in Hawaii, Tahiti and the Caribbean. As a tourist destination, the BVI sits on the rising demand for tourism."

OECD Improved BVI Status as to Tax Transparency

The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes has issued review reports for 12 jurisdictions regarding their compliance to the global standards on taxation transparency and information exchange. Among the countries, there was the British Virgin Islands which was stated to have made improvements of its exchange of information practices under its Phase 2 review, and was moved from the status of “Non-Compliant” to “Largely Compliant” jurisdiction.

The OECD Global Forum is the world’s largest international tax group, including 127 members. The Forum has completed 198 peer reviews and assigned compliance ratings to 80 jurisdictions that have undergone Phase 2 reviews.

BVI and Qianhai Held Cooperative Development Forum

On May 26, the Qianhai-British Virgin Islands (BVI) Cooperative Development forum was held in Shenzhen, PRC, hosted by deputy-directors general of Qianhai Authority who provided latest information on Qianhai’s achievements and future plans. More than 200 financial practitioners and enterprise representatives took part in the forum.

Under the name “Development for cross-border finance under new economic circumstances”, the forum included discussions related to cooperation between BVI and Qianhai, BVI business opportunities and legislation. A panel discussion was held named “How to promote the interaction and development of Qianhai and BVI cross-border financial business.”

Director of BVI House Asia, Elise Donovan, represented the advantages of BVI financial services and company structures used for fund management and asset protection, and said that the territory is ready to deepen bilateral relations with China.

GFCI Ranks BVI First among Offshore Jurisdictions

According to the recently published Global Financial Centres Index (GFCI), BVI offshore jurisdiction is on the 34th position – 13 positions higher than in the previous list. British Virgin Islands has the highest rank among its competitors, including Cayman Islands, Channel Islands, the Bahamas and Bermuda.

Executive director of BVI Finance, Kedrick Malone, commented on the GFCI results, saying: "… The result of the index clearly shows that the BVI is an internationally respected, established and pioneering financial centre…The BVI's position as the leading offshore financial centre is testament to the strength and high standards of our multi-faceted financial services sector, the professional in its rank and the regulatory regime that it operates within."

The Index is based on the existing information and online survey results taking into account more than hundred different factors, including regulations, workforce, and companies operating in the financial centre and providing financial services.

BVI Maintains Leading Position as to Company Incorporations Activity

Global provider of offshore legal, fiduciary and administration services Appleby has published On the Register report, which provides information on company incorporations in offshore jurisdictions in the first half of 2014.

According to the report, total number of company registrations increased in offshore jurisdictions by 4%, compared to the previous six month period, and made 46,455 new companies. The British Virgin Islands remains dominating jurisdiction as to the volume of new company incorporations: in the first half of the year, 25,533 new companies were registered in the jurisdiction, which is a 6% increase on the previous six months. The BVI maintains far ahead of its follower – the Cayman Islands, which had the largest increase in new company incorporations in this period.

By words of Farah Ballands, Partner and Global Head of Fiduciary & Administration Services at Appleby, “This year is off to an encouraging start, with levels of active companies on the offshore company registers continuing to hold steady.”

BVI recognized as Major Offshore Centre in International Reports

The British Virgin Islands jurisdiction has been named the top offshore centre in the Global Financial Centres Index – the 16th survey of more than 3,500 international financial services professionals. Also, already for the fifth year, BVI became the most important offshore jurisdiction according to the Offshore 2020 report, which is a survey of 300 senior financial industry stakeholders from many countries. The BVI was ranked in the 47th place – the highest among offshore centres. Gibraltar is in the 53rd place, Cayman Islands and Bermuda are 54th and 58th, respectively.

The fifth Offshore 2020 report stated that offshore industry has emerged during this year, featuring better regulation, more transparency and higher degree of professionalism. It was noted in the report also that offshore centres continue to struggle with reputation and regulation, and for all of them, ratings lowered since the last Global Financial Centre Index 15. The report also highlights recognition of the offshore industry role in the global financial supply chain, including international trade, capital efficiency and asset management.

BVI and CI as Main Offshore Jurisdictions for Chinese Capital

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.