BVI Business: Versatility and Innovation
As a financial centre of major importance to the global financial system, the British Virgin Islands has always set the highest standards of transparency, regulation, collaboration, enforcement and cooperation.
As an International Finance Centre (IFC), our reputation, the way we do business and meeting international standards has always been a key part of our strategy for keeping our competitive edge.
This approach continues to give the BVI a number of clear advantages for the international business community, including:
- enduring political and economic stability
- a business-friendly operating environment
- efficient company formation and administration processes
- a pool of knowledgeable and qualified business/legal professionals
- a well-developed infrastructure, including excellent telecommunication service
- no currency exchange controls and the use of the U.S. Dollar as the official currency
- a commitment to enact legislation that meets business needs and protects the integrity of the BVI and a strong partnership between the public and private sectors
Regulation & Collaboration
The BVI is widely acknowledged as having a robust regulatory system that has been recognised by international bodies, including the Caribbean Financial Action Task Force (CFATF), the International Organisation of Securities Commissions (IOSCO) and the OECD.
In addition, we have implemented a mixture of innovative and relevant legislation that, when combined with regulators and practitioners who are committed to remaining at the forefront of the industry, will serve to keep the BVI at the cutting edge of financial services.
The Securities and Investment Business Act (SIBA), which was enacted earlier this year, responds to the requirements of IOSCO and enhances the BVI’s attractiveness by establishing the right legal and regulatory framework for institutions, managers and investors. Also, the new Insurance Act ensures full compliance with the International Association of Insurance Supervisors’ Core Principles; it simplifies the BVI’s insurance regime and makes it even more transparent. Both new laws are aimed at strengthening our regulatory regime and ensuring we continue to be a jurisdiction of choice for doing business.
The BVI is also committed to the OECD’s principles for effective exchange of information and transparency, having already signed 17 Tax Information Exchange Agreements (TIEAs), with countries such as the United Kingdom, Australia, the United States, China, France, Ireland and the Netherlands. We are also fully committed to signing further TIEAs as well as ensuring that those already signed with our OECD partners are effectively implemented.
The quality of its regulation is a key reason why the BVI plays host to so many fund managers and administrators, as the Caribbean’s second largest hedge fund domicile with clients from the United States, United Kingdom, continental Europe, the Middle East and Asia. Nearly 3,000 funds are currently registered with more than US$100 billion in assets under management.
Funds incorporated in the BVI now have further legal and regulatory support following the enactment of the SIBA as it codifies some of the practices already undertaken by funds domiciled in the BVI and introduces laws to regulate investment business, public issues of securities and market abuse. Fund managers already find the legal and regulatory system in the BVI familiar and easy to use as the Mutual Funds Act, 1996 has been in place for well over 10 years.
The BVI Business Companies Act, 2004 (the "Act") has received positive reviews for its flexibility from legal practitioners around the world. Five different types of companies can be incorporated under the Act. In particular, many investors welcomed the introduction of segregated portfolio companies (SPCs), as these allow umbrella funds to be set up with limited liability between share classes (which was not permitted under the former regime) thus avoiding potential cross-class liability issues. The Act also includes statutory merger and consolidation provisions, making it possible for two entities (only one of which need be a BVI entity provided certain conditions exist) to merge with all the assets of both entities consolidated into the surviving entity. This has made the BVI more attractive for joint venture vehicles and for restructuring companies and funds. BVI companies can also list on worldwide stock exchanges, including LSE, AIM, NYSE, NASDAQ, ISE, TSX, BOVESPA and HKSE.
Through the Virgin Islands Special Trust Act, 2003 (VISTA), the BVI has consolidated its position as the location of choice for international trust settlements and operations. VISTA has been acknowledged by trust and estate practitioners and other international experts to be a pioneering piece of legislation that provides a world-leading regime for the trusts and estates industry. The implementation of the Financial Services (Exemptions) Regulations in August 2007 has clarified the circumstances under which a BVI private trust company must be licensed. The recent Private Trust Company (PTC) legislation has also further enhanced the BVI’s international reputation for trusts and estate planning products, with VISTA purpose or charitable trusts being ideally suited to holding shares in PTCs.
Captive Insurance Management
The BVI has developed into a major international insurance centre. This growth has been aided by the strong presence of complementary service providers such as internationally renowned law firms and accountancy practices.
The BVI Insurance Act came into force on Feb. 1, 2010. It provides a new, more transparent and cost-effective framework for the jurisdiction's growing insurance industry, simplifying the current governing statute and supporting the existing robust regulations. The Act will open the door to the future development of additional and more sophisticated types of insurance companies.
Accounting and Legal Services
The world’s foremost accountancy firms all have a presence in the BVI and there are clear signs of a growing demand for their services, particularly in the areas of mutual funds audit and insolvency practice. In addition, legal services are growing with the recent influx of several prominent law firms, including Withers Worldwide (in 2009), which chose the BVI as the location for its first foray into the offshore legal sphere. BVI lawyers are widely respected throughout the financial services sector and several BVI-based firms have opened offices in London and Hong Kong.
The BVI is an acknowledged Category 1 Red Ensign register, which means that it is one of only 10 centres around the world where mega and superyachts of up to 3,000 gross tonnage and general cargo ships of unlimited tonnage can be registered. The BVI Shipping Registry offers the highest practical standards in technical expertise, safety management and quality assurance, compatible with the Red Ensign Group (REG), to assure first-class services. The island’s facilitates include registration of ships, mortgages, discharge of mortgages, change/transfer of ownership and full corporate, legal, telecommunications and courier services. Ships flying the BVI Red Ensign flag are British ships and are entitled to British Diplomatic and Consular support and Royal Navy Protection. In addition, the BVI has access to the range of technical expertise of the UK Maritime and Coastguard Agency.
The Role of BVI International Finance Centre
The BVI IFC has played a pivotal role in the promotion and marketing of the BVI as a leading financial centre. Established in 2002 as part of the government’s growing commitment to the financial services industry, the aim of the IFC is to give a voice to the BVI’s financial sector.
The launch of the IFC marked the final stage in the government’s plans to separate the marketing/promotional and regulatory/supervisory functions. Regulation is now the sole responsibility of the BVI Financial Services Commission (FSC), which was also established in 2002.
As the BVI continues to play an important role within the global financial system, the IFC remains committed to promoting the jurisdiction and its financial services while also maintaining the highest standards of transparency, regulation, collaboration, enforcement and cooperation.
The BVI International Finance Centre
Government of the British Virgin Islands
Haycraft Building, 1 Pasea Estate, Road Town, Tortola
Tel: 468-4335 • Fax: 468-1002; 494-1260
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