The British Virgin Islands (BVI) is a British overseas territory located in the Eastern Caribbean, about 80 kms to the east of Puerto Rico. It consists of the main islands of Tortola, Virgin Gorda, Anegada, and Jost Van Dyke, along with over 50 other smaller islands and cays. Only 15 of the islands are inhabited. Road Town, the BVI’s capital, is situated on the largest island, Tortola, which is approximately 20 kms long and 5 kms wide. The BVI has a population of about 28,000, of which around 23,500 live on Tortola.
The British captured Tortola from the Dutch in 1672 and annexed Anegada and Virgin Gorda in 1680. The BVI was administered variously as part of the British Leeward Islands or with St. Kitts and Nevis, before gaining separate colony status in 1960 and becoming a self-governing territory in 1967. Since that time, the BVI has diversified away from agriculture towards tourism and financial services, becoming one of the wealthiest areas in the Caribbean.
The BVI operates as a parliamentary democracy. Ultimate executive authority is vested in The Queen and exercised on her behalf by a Governor. Under the 2007 constitution, the head of government is the Premier, who is elected in a general election along with the other members of a unicameral House of Assembly made up of 13 elected members. Elections are held roughly every four years. Defence and most foreign affairs remain the responsibility of the UK.
The BVI legal system is based upon English common law. It is part of the Eastern Caribbean Supreme Court (ECSC) region. A specialist Commercial Court was established in 2009 to hear commercial and finance matters from the BVI. Appeals are to the Eastern Caribbean Court of Appeal, with a further right of appeal to the Privy Council in England.
English is the official language and official currency is the United States Dollar. There are no exchange controls. The BVI has no capital gains or capital transfer tax, no inheritance tax, and no sales tax or VAT. There are stamp duties on certain transactions, and property taxes. Personal and corporate income tax was abolished in 2004. A payroll tax is now levied on local employees. There are no withholding taxes in the BVI.
BVI became the market leader for corporate services following the introduction of the International Business Companies Act in 1984, which created the International Business Company (IBC). This became the industry’s preferred offshore vehicle and was particularly popular in the Far East. BVI Business Companies Act 2004 superseded the IBC Act and the IBC has now been replaced by the BC (Business Company). The BVI is home to over 450,000 active business companies.
There is a good commercial and professional infrastructure and the government actively promotes the development of the finance services sector. In addition to being the world’s pre-eminent corporate domicile, the BVI is the second largest hedge fund domicile in the world and the fourth largest captive domicile for insurance products and services.
Financial services activities are regulated by the Financial Services Commission (FSC) to ensure compliance with relevant international standards and conduct of business practices. The FSC’s mandate includes banking and fiduciary business, investment business, insolvency services, insurance business, company management, company registration and intellectual property.
BVI Financial Services Commission – www.bvifsc.vg
BVI Finance – www.bvifinance.vg