A Long and Eventful History
The British Virgin Islands are well known in historical terms, both as a stop-over point for ships on their way to and from Europe and ‘The New World’ and as a haven for pirates, preying on those same ships throughout the latter half of the 17th century and the early part of the 18th century. The multitude of small cays and hidden coves scattered about a jewel-like sea made the islands an ideal base for those intent on mischief.
Perhaps the most famous, many would say infamous, of those pirates was the British renegade Sir Henry Morgan, well known for hating not only the Spanish but the sight of both taxes and tax collectors. Maybe we can thank Sir Henry after all, could it be that the origins of the BVI’s present day ‘offshore’ status lie back with him?
Not only did those pirates give the islands such a colorful past, they were also responsible for some of today’s tourists, hopefully seeking out those long-lost treasure troves and diving to the many wrecked galleons which litter the seabed.
A Secure and Stable Territory
Politically the British Virgin Islands enjoy the best of both worlds, having the ideal combination of responsibility for its internal self-government and being a dependent territory of the United Kingdom. The islands are headed by a British Crown appointed Governor.
The BVI Government has a long-standing tradition of handling its internal affairs in a responsible and progressive manner. There are no significant social, racial or political tensions in the country.
The BVI system of government is bicameral, consisting of an elected Parliament, called The Legislative Council, and a Cabinet, called The Executive Council. It is a vibrant democracy, and both enjoys and encourages the free flow of ideas from all sides. Elections are held at least once every four years to ensure that those ideas are freely expressed.
There is a B national consensus on a number of fundamental objectives including the development of the jurisdiction as a high-quality financial center and the expansion of the territory’s partnership with the international financial community.
The BVI’s system of government is complemented by an independent legal and judicial system, which is based on English Common Law and locally enacted statutes, and provides for a final right of appeal to the Privy Council in London.
The United Kingdom remains responsible for the territory’s external affairs, defense, internal security and the administration of the courts.
It must be emphasized however that the administration of BVI Offshore Companies and Trusts and any legal matters so arising, such as claims against island based entities by foreign tax authorities, is solely within the jurisdiction of the BVI courts. The UK has no control over such matters whatsoever.
A Well-Regulated Jurisdiction
The government and financial service sector in the BVI are united in their commitment to maintain and enhance the territory’s reputation as a responsible and reputable financial center, recognizing that this represents an essential asset for the jurisdiction’s continued growth.
In close consultation with the private sector, the government has established a sophisticated and efficient regime of supervision and regulation to safeguard the integrity of the jurisdiction without imposing undue or unnecessary restrictions on qualified participants. It consistently ensures that all its policies and practices are fully in line with internationally accepted standards.
The Government has charged the Financial Services Department with responsibility for the due diligence and approved processes for applicant licenses and the maintenance of prudential supervisory practices. The Department follows a consistent policy of selective licensing, focusing on encouraging only service providers of undoubted and untainted stature to operate within the jurisdiction.
For its part, the Association of Registered Agents, which includes almost all members of the BVI’s financial community, has adopted a code of conduct and professional ethics. This code is designed to maintain and enhance the BVI’s reputation as a financial center, to prevent the use of BVI entities for criminal purposes and to ensure adherence to the principles of confidentiality and due diligence embodied in BVI laws and policies.
A Reliable Legal Framework
The BVI’s regulatory systems are supported by a comprehensive legal framework that includes legislation covering a wide range of financial services, such as insurance, trusts, corporate and banking operations.
This legislation has been carefully designed so that, without prejudice to the government’s commitments to minimize conditions on the transaction of legitimate business and to protect privacy and client confidentiality, it provides the government with the authority to:
The BVI’s well-earned reputation for integrity, prudence and vigilance is reflected in the fact that it is the only British Dependent Territory in the Caribbean to which the British Government has devolved overall responsibility for developing and managing its financial services industry.
Relevant to the ‘offshore’ industry, the BVI operates under the framework of the following Acts:
A Strong Service Infrastructure
The BVI’s development as a financial centre has led to a dramatic expansion in the quality, range and size of the local financial services community.
Many leading international service firms – including the “Big Six” accountancy firms – are now well represented in the BVI, offering a wide range of high-quality services in the international banking, financial, legal, accounting, trust, company, management and other fields.
These firms are well-served by a strong and well-educated local workforce.
The BVI recognizes that foreign expertise has a critical role to play in its development as a world-class financial centre. The government therefore takes a very accommodating approach to the issue of work permits to ensure that the financial community can rely on the availability of high class and expert service and not be constrained by a ‘nationals only’ attitude.
As well as welcoming skilled expatriates, successive BVI governments have allocated a high priority to the education of their own people so that the territory now enjoys one of the world’s highest literacy rates, now over 98%.
In partnership with the private sector, the government has also devoted a special effort to training its own people in financial service skills, by establishing a wide range of courses to develop these skills in the BVI and by funding overseas study and work experience in the financial services business for many of its young people.
The expansion of the financial community in the BVI has generated rapid development in other service sectors – including world-class hotels, conference and seminar facilities – that are geared to meeting the needs of the financial services industry.
A Strategic Location
By location and time-zone, the BVI is strategically placed to serve – and provide a bridge between – the global financial markets of the Americas, Europe and Asia.
The BVI serves as the telecommunications gateway to the Caribbean and offers state-of-the-art facilities. These facilities include fibre optic communications, video conferencing and broad-band internet/e-mail access as well as the ‘standard’ telephone, fax and telex services. Cable television is available throughout the main islands and satellite television is available elsewhere.
The territory is easily accessible by both sea and air and all of the major courier services offer “next day” service between the BVI and major business centers in the USA and usually within 2 days to Europe and the rest of the world.
Lifestyle and Environment
The BVI is located in the Lesser Antilles region of the Caribbean, some 95 kilometers east of Puerto Rico, and has magnificent landscapes and seascapes, a balmy sub-tropical weather system and a wealth of sporting and leisure activities.
The BVI comprises of over 50 islands and cays, totaling 155 square kilometers in area with a permanent population approaching 20,000. The main island is Tortola, its capital and main business center being Road Town, with a population of some 13,500. Only 16 islands in the group are inhabited, apart from Tortola the other main ones being Virgin Gorda, Anegada and Jost Van Dyke.
The islands are recognized as the “sailing capital” of the Caribbean, and the surrounding waters, especially the Sir Francis Drake Channel, are widely regarded as the most scenic sailing waters in the world. There are also outstanding opportunities for scuba diving, snorkeling, wind surfing, fishing, horse riding, hiking and tennis. Many of the major hotels have their own associated leisure centres and activities, most of which are available for all to enjoy. Both top class and ethnic restaurants and bars abound.
A Public/Private Sector Partnership
In addition to the integrity of a British Dependent Territory, the BVI offers a wide range of other competitive assets that collectively give the islands a unique advantage.
These competitive assets all have their roots in the close partnership that has been established between the public and private sectors in the BVI.
The BVI demonstrated its ability to tailor its offerings to the needs and interests of the financial sector with its adoption and implementation of the International Business Companies (IBC) Act of 1984. The adoption of this legislation was preceded by extensive consultation with the private sector.
Since then, the government has followed a consistent policy of undertaking extensive consultations with the private sector before initiating any major legislative or policy changes. A true demonstration of working democracy.
Through this consultative process, the BVI is able to frame its legislation, policies and programs in such a way that they provide attractive and appropriate conditions and incentives for the conduct of legitimate business, including:
The government and private sector are committed to continuing to work closely together to foster this atmosphere and to promote their shared objectives. It is this solidarity of purpose and action that represents the essential BVI Advantage.
Summary – The BVI Advantage
As an international financial centre, the British Virgin Islands offers a wide range of competitive assets that collectively represent The BVI Advantage.