Positive offshore report ‘challenges’ perception
Following an independent report which ranked the British Virgin Islands (BVI) as the most important offshore jurisdiction for the sixth consecutive year, local stakeholders are singing the territory’s praises, with one going as far as to claim that the report has challenged the common perception that the BVI is being used for ‘tax driven’ purposes.
Director of BVI House Asia Elise Donovan, in welcoming the findings of the report, said: “We are pleased to receive such recognition once again from industry practitioners around the world. This is clear recognition of the depth and breadth of our offering, and most importantly, this report challenges the common perception that the BVI is being used for tax-driven purposes.”
Donovan further stated that the territory’s strong performance in this year’s report highlights that the financial services industry is ‘not in demise’, but is in demand and is expected to continue growing.
She noted the BVI is an early adopter of the Organisation of Economic Cooperation and Development’s (OECD) Common Reporting Standard. The OECD has rated the territory as a “largely compliant” jurisdiction.
“We are a well-respected, robustly regulated, cooperative jurisdiction with the highest offshore ranking in the Global Financial Centres Index,” Donovan further said.
Many go away, but return to the BVI
Meanwhile, one of the private stakeholders in the local industry has claimed that persons who sometimes opt to use other jurisdictions end up coming back to the BVI.
“The BVI experience is seamless and, in many cases, those who have chosen to use other weaker jurisdictions have returned to use BVI structures because it is the best in the market,” according to Richard Hall, partner at Conyers Dill and Pearman.
He added, “Looking ahead, we expect to see the use of BVI structures increase, with BVI companies increasingly used as listing vehicles.”
Another private stakeholder in the industry, Alan Collins, who is the executive director of Newhaven, noted that the BVI has managed to perform well despite challenges.
“Despite the challenges the offshore industry has faced, it continues to be a favourite because people know the BVI. They know the level of support they will get, and they know the strength of its infrastructure,” he said.
In the meantime, regarding the independent report, the BVI government stated that more than 300 global financial services industry participants contributed to it.
It stated that the BVI offers a well-entrenched conduit for corporate vehicles and funds, and it expects that positive trajectory to continue into 2020. This underscores a major trend from last year’s report, which was that the demise of offshore had been predicted every year but, despite that, the BVI as a jurisdiction continues to lead the way.
The report also highlighted that the BVI has been used for asset protection, investment holdings for corporates and wealth management, special purpose vehicles and listing vehicles for initial public offerings, as well as individual and corporate tax planning.
