BVI Delegation Visited Business Conferences in Dubai

In March, the British Virgin Islands delegation visited the two conferences in Dubai, with the purpose to discuss potential co-operation in the sphere of financial services, and attract funds and business to the BVI.

The Hedge Funds World Conference at the Jumeirah Beach Hotel in Dubai and the Society of Trust and Estate Practioners' "Opportunities for the Flow of New Wealth Conference" were organized to discuss business and investment possibilities in Dubai, particularly from tax-free Dubai International Financial Center.

Elise Donovan, the Executive Director of the BVI International Finance Center, commented on the events: “We were given a very warm welcome on our return to the United Arab Emirates and it is clear that many investors from across the region recognize the advantages of using BVI structures and services for conducting international business.”

She also said that the British Virgin Islands is an “attractive option to investors from the Gulf States looking to acquire BVI company structures for a multiplicity of investing and other cross-border transactions. BVI’s structures are easy to use, flexible, widely accepted and cost-competitive compared to other products being offered in the region."

Brian Obvi,
Offshore Analyst

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BVI Named a Major Financial Centre by The Economist

In a special report by The Economist, a well known weekly news magazine publishing reports on politics, economics, business and finance, BVI has been recognized as a major financial centre playing a strong role in the global economy. It is stated in the report that offshore financial centres have recently been under attack but have been resilient to it, and the future of respected international finance centres like the British Virgin Islands and their staying in business is guaranteed.

The report, named “Storm survivors”, also acknowledges the importance of Asia to the BVI jurisdiction, as the BVI companies are used for initial public offerings and international investments. Among the reasons why investors are using the BVI for international arbitrage, there are highlighted the ease of raising funds, cheaper access to capital markets, speed of setting up a company (or investment vehicle) and access to reliable courts. 

The executive director of the BVI International Finance Centre Elise Donovan commented on the report, saying that “The Economist has highlighted some positive attributes about the BVI. It has shown us in a true light as a stable, well regulated and neutral jurisdiction which makes a significant contribution to the liquidity of the global economy.”

She also said some words on the role of Asian market for the BVI: “Asia is of the utmost importance to us. In less than 10 years, China will be the largest economy in the world. We have built a strong relationship with China and we must continue to build on those foundations and ensure the BVI remains an attractive proposition for Asian businesses.”

Brian Obvi,
Offshore Analyst

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Financial Services Day Held by BVI International Finance Centre

Last week, the BVI International Finance Centre hosted Financial Services Day, as part of the BVI Senior Students Career Expo which took place on February 11-14 at the Multipurpose Sports Complex. Financial Services Day has the aim to educate secondary school students on the importance of the BVI financial services industry and its many career opportunities.

The Exhibitors of the Financial Services Day included key industry players – the Financial Services Commission, BVI Bank Association, BVI Association of Professional Accountants, BVI Bar Association, Virgin Islands Shipping Registry, Financial Investigation Agency, BVI Airports Authority, Restructuring and Insolvency Specialists Association, Association of Registered Agents, the Society of Trust and Estate Practitioners, and insurance companies.

IFC Executive Director Ms. Elise Donovan in her introductory remarks spoke about the contribution of the financial industry to the economy of the Territory, stating that “more than 60 percent of the revenues that goes into the Government’s Treasury come from financial services.”She encouraged students to consider careers in the financial services sector, which is so important to the British Virgin Islands.

The BVI IFC hosted the BVI Senior Students Career Expo beginning from 2007, in previous years this was held only for students of the Elmore Stoutt High School (ESHS).

Brian Obvi,
Offshore Analyst

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BVI Premier Speaks on the Development of Financial Services Industry

The Premier and Minister for Finance of the British Virgin Islands Orlando Smith had discussed the future of the BVI as a financial centre with business leaders. He said that the BVI government has the aim to strengthen the position of the territory as a leading offshore financial centre that adheres to international standards, and to set the BVI apart from its competitors by developing innovative new offerings.

The Premier and Minister for Finance noted that the BVI, which once had unique position in the world of financial services, now has a community of competitors in this niche, as well as in tourism sector. He said that the territory must “rise to the challenges of keeping the twin pillars of economy not only sturdy but resilient.” By words of the Premier, the BVI should review its business models, and to improve or increase the products offered, because what once was an “extraordinary idea,” has now become “the new normal.”

Orlando Smith pointed to changing international standards on tax transparency and information exchange. He stressed that the BVI government must increase its efforts to inform the international community on all the steps taken by the jurisdiction to adopt leading international standards and improve co-operation with tax authorities of other countries. Also, he said that particularly close attention should be focused on the “correctly themed marketing of our tourism and financial services products, and currently efforts are fully underway to rebrand the BVI product."

To boost the ties of the BVI territory with emerging markets, particularly Asian, the BVI government plans to establish a representative office in Hong Kong.

Brian Obvi,
Offshore Analyst

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BVI Government Signed Contract with LGS and Associates

The Government of the British Virgin Islands signed a contract worth US$100,000 with a financial industry consultancy firm LGS and Associates, which is headed by the financial industry expert Mrs. Lorna Smith. 

The information about the signing of the contract in December 2012 was confirmed by the Financial Secretary Mr. Neil Smith and by Mrs. Smith herself, who stated that the contract is not a new assignment since she has been providing services to the BVI governments, including under the Virgin Islands Party administration. 

Mrs. Smith recently attended the OECD Global Forum on Transparency and Exchange of Information. She also took part in the negotiations concerning tax treaties between OECD countries and OECS countries, all of which have been put on the OECD ‘white list’. She also takes the post of Chairperson of the Financial Services Business Development Committee, whose task is to maintain the image of the British Virgin Islands as a top international finance centre, identifying new and emerging markets and recommending legislation for introduction and support of new and existing products and services.

Mrs. Smith assisted in the BVI passing phase I review process on global transparency and exchange of information for tax purposes, and, in her own words, continues to work to ensure that the BVI moves phase II of the review process.

Brian Obvi,
Offshore Analyst

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BVI FSC Updated Public Statements Issued By FATF

The Financial Action Task Force (FATF) issued public statement reaffirming its blacklisting of Iran and the Democratic People’s Republic of Korea. The public statement reproduced in original form on the website of the British Virgin Islands Financial Services Commission was issued as an update for the previous FATF statements.

The updated statement also identified jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies that have not made sufficient progress in combating them: Bolivia, Cuba, Ecuador, Ethiopia, Indonesia, Kenya, Myanmar, Nigeria, Pakistan, Sao Tome and Principe, Sri Lanka, Syria, Tanzania, Thailand, Turkey, Vietnam, and Yemen.

In the currently listed public statement, the BVI FSC advised the general public of the Anti-Money Laundering Regulations and the Anti-Money Laundering and Terrorist Financing Code of Practice to note the concerns expressed by the FATF with respect to the named jurisdictions, when dealing with customers or transactions involving any of the jurisdictions identified by the FATF public statement.

There is also a separate statement issued on the same date and named “Improving Global AML/CFT Compliance: On-Going Process”, where the FATF organization updated statements on some countries that have committed to working with it to improve their AML/CFT frameworks. 

Brian Obvi,
Offshore Analyst

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BVI Premier Announced New Budget Format and Fiscal Strategies

In his 2013 Budget Address to the BVI territory, the Premier and Minister of Finance Dr Orlando Smith named the increase of revenue from tourism, increased market share in the financial services industry, and renewed activity in the other components of the economy as the main factors for achieving positive economic growth in the British Virgin Islands.

The Premier explained that this budget is made over a rolling three-year period, for the first time in the history of the British Virgin Islands. This method will assist the government in the planning for a longer term, and allow for the better management. The new budget format is built upon a new chart of accounts that is based on the International Monetary Fund’s government finance statistics (GFS) format. 

The fundamental principles of the government’s fiscal strategy include: increasing the recurrent budget surplus over the medium term through the enhancement of the revenue stream, a reduction in recurrent revenue growth, reducing the fiscal deficit by 2015, meeting the borrowing limit ratios stated in the protocols for effective financial management, and enhancing the financial management structure and practices within the government.

Brian Obvi,
Offshore Analyst

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Premier Speaking on BVI Tourist Board Activities

BVI Premier and Minister for Finance having responsibility for the tourism sector, Hon. Dr. D. Orlando Smith, said that the first one hundred days have been an intense listening period for members of newly appointed BVI Tourist Board.

The Premier said that in the very beginning of the year the Tourist Board organized a formal Tourism Stakeholders consultation to get information from the tourism industry on a number of topics ranging from the “BVI Brand” to infrastructural development, marketing collaboration, investment in new and existing product offerings and how the Board could be more responsive to stakeholders. Subsequent to that meeting, the Tourist Board have been in contact with the airlines, ferry operators, with the Dive Association, and other organizations. Hon. Orlando Smith stated that the consultations will continue in order to find workable solutions to attract visitors to the British Virgin Islands.

According to the Premier, the BVI Tourist Board continues its partnership with the International Finance Centre and Shipping Registry, concentrating on obtaining the benefits of synergy in brand and target markets.

Brian Obvi,
Offshore Analyst

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BVI FSC Informs on New FATF Public Statement

The British Virgin Islands Financial Services Commission has published on the home page a Public Statement of the Financial Action Task Force (FATF), which was issued as an update to the FATF statements previously issued in October, 2010, and in February, 2011. The updated statement identified jurisdictions with strategic anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies that have not made sufficient progress in addressing these issues. These are Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria and Turkey.

The Commission advised the public to note the concerns expressed by the FATF with respect to the named jurisdictions, and consider the money laundering and/or terrorist financing risks associated and apply appropriate due diligence measures when dealing with customers or transactions involving any of these jurisdictions.

There was also a separate document published by the FATF and named “Improving Global AML/CFT Compliance: On-Going Process”, with the updated statements regarding certain jurisdictions that have committed to improve their AML/CFT frameworks. Among other jurisdictions, the statement identifies Greece as having made significant progress in improving its AML/CFT regime.

Brian Obvi,
Offshore Analyst

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BVI rating raised in Global Financial Centres Index

The jurisdiction of the British Virgin Islands has become the only offshore financial centre the rating of which improved in the latest edition of Global Financial Centres Index (GFCI 9), while other jurisdictions, including Bahamas, showed decline that had started with the beginning of the global financial crisis in 2008. GFTI rating of the BVI raised by two points and achieved 40th place in the ranking. Executive Director of the BVI International Finance Centre Sheri Ortiz considers that the BVI's boost in the ninth edition of the GFCI is for the centre's ongoing commitment to regulation, transparency and continued growth in the financial services offering of the jurisdiction.

Brian Obvi,
Offshore Analyst

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NY Funds Conference Proved to be Successful

The New York funds conference, which was hosted on September 23 by the International Finance Centre (IFC) and the BVI Investment Funds Association, was named a “great success” by the Executive Director of IFC Sherri Ortiz. According to one of conference participants, the event was well organized, and information was interesting and well presented.

On the conference the following presentations were provided by representatives of Conyers Dill & Pearman, Maples and Calder, Walkers, Harney´s and Ogier: State of the Funds Market, A Regulatory Approach, Litigate with Confidence and Lessons learnt for the Funds Industry from the Financial Crisis. The British Virgin Islands Financial Services Commission provided updates on the territory's regulatory regime and recent legislation initiatives.

Sherri Ortiz commented that the conference was also a “clear demonstration of how far the Territory has progressed in this sector and the extent to which our funds business has grown. There is an increasing appetite from global practitioners to understand more about the Virgin Islands, as evidenced by the call for more events of this kind.”

Brian Obvi,
Offshore Analyst

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BVI IFC Hosts New York Funds Conference

On September 23, the British Virgin Islands International Finance Centre (IFC) and the BVI Investment Funds Association will host a conference in New York under the title "A New Era in Funds Domiciliation," where Domiciliation refers to the fixed location of a fund.

By words of the Executive Director of the BVI IFC Ms. Sherri Ortiz, the conference is a great demonstration of Territory's progress in this sector, and the extent to which BVI businesses in funds have grown. She noted that this is an excellent opportunity for them to showcase their funds expertise to international practitioners who want to know more about the British Virgin Islands.

The Executive Director said that the NY conference “promises to provide a quality programme of discussions and keynote speakers. It will provide a unique platform for an exchange of views, sharing best practice and formulation of strategies to best deal with opportunities in 2010 and 2011." She added that the event, which will be attended by leading hedge fund providers in the U.S., will include presentations from leading private sector practitioners on the following topics: State of the Funds Market, A Regulatory Approach, Litigate with Confidence and Lessons learned for the Funds Industry from the Financial Crisis.

The Conference is part of the BVI IFC's work on marketing the BVI financial services industry and promotion of the jurisdiction's reputation as a reliable financial services centre. The event will be visited by the representatives from the BVI FSC, such reputable offshore law firms as Conyers Dill & Pearman, Maples and Calder, Walkers, Harney´s and Ogier.

Brian Obvi,
Offshore Analyst

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OECD Highly Appreciated BVI Role in Transparency Standards Implementation

BVI played a key role in promoting the international standards on tax transparency, being a member of the Peer Review Group of the Global Forum on Transparency and Exchange of Information. This was recognized in the OECD briefing entitled “Promoting Transparency and Exchange of Information for Tax Purposes”. The jurisdiction was also praised for following the guidelines for the signing of Tax Information Exchange Agreements (TIEAs).

The Executive Director of the BVI International Finance Centre in comments on the report said that in addition to 17 TIEAs already signed the jurisdiction expects to conclude further negotiations in the coming months.

The territory welcomed OECD's Peer Review process which is to start for BVI in the beginning of 2011, believing it is well placed to meet the requirements. All members of the Global Forum, and jurisdictions relevant to it, are to undergo reviews of the implementation of their systems for the exchange of information in tax matters. The review will be made in two phases, and the first phase is to be completed before June 2012.

Peer reviews are part of a three-year process approved by the Global Forum in February 2010, in response to the G20 requirement for higher standards of tax transparency and exchange of information. The first set consisting of 18 reviews is to be discussed at the next Peer Review Meeting which will take place on July 20-22, 2010.

Brian Obvi,
Offshore Analyst

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BVI Executives Discuss Cuts in Funding of Financial Services Sector

The Executive Director of the International Finance Centre (IFC) Sherri Ortiz, in her speech before the Standing Finance Committee, stated that, while being responsible for promotion and development of the financial services industry, they are not able to get the funding, and this can disturb the growth of the financial services sector of the BVI economy. The IFC Director said that, because of the significant cut in the IFC budget, the Commission cannot develop any programmes, especially taking into account the extremely competitive environment.

Also, Territorial Member Hon. Vernon Malone expressed his concerns about cutting the budget for the marketing of the financial and tourism sectors - the two pillars of country's economy.

The committee was asked to look at the marketing for financial services and tourism and ensure sufficient funding to keep the jurisdiction competitive.

Financial Secretary Neil Smith said that, while they spoke about the financial constraints of the BVI territory in order to promote financial services and tourism, they must also increase efforts to maintain their position in these areas, because competition is very high and for other jurisdictions these are also the most important sectors of economy.

Brian Obvi,
Offshore Analyst

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Director of BVI European Office Returns to Conyers Dill & Pearman

Practicing lawyer Dawn Smith, which was appointed as the Director of the BVI London Office, has returned to the British Virgin Islands to rejoin the offshore law firm of Conyers Dill & Pearman. Before her appointment in August 2006, she was engaged in Conyers Dill as an associate attorney specialising in advising clients on the issues of commercial litigation and corporate law.

Dawn Smith graduated from Middlebury College, also she holds an LLB from the University of the West Indies in Barbados, a Certificate of Legal Education from Norman Manley Law School in Jamaica. She has the experience of work in various committees within the financial services industry.

In the post of Director of the BVI London Office, Smith served as the official representative of the British Virgin Islands in the UK and the whole European community, supporting the interests of the jurisdiction with various government agencies, departments, parliament and in diplomatic circles. In co-operation with the BVI International Finance Centre and Financial Services Commission, Dawn Smith worked on promotion of the jurisdiction's financial services industry.

According to press release issued by the Conyers Dill & Pearman, Dawn Smith was included into its BVI Litigation practice, along with Tameka Davis who specialises in commercial and corporate litigation and earlier worked with Anguilla law firm. Mark Forté, Head of Litigation in Conyers’ BVI office, in his comments on the new hires, noted that they have doubled their litigation team in BVI in the past months, and the return of Dawn Smith to the BVI legal community will add to the BVI high reputation in dispute resolutions.

Brian Obvi,
Offshore Analyst

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BVI Financial Services Statistics for Q4 2008

In the end of May 2009, the Commission issued the thirteenth volume of Quarterly Statistical Bulletin, describing the situation in the financial services industry of the British Virgin Islands in the fourth quarter of 2008 and covering changes and progress in its different sectors.

The Registry of Corporate Affairs provided following statistical data for this period:
9,000 new companies were incorporated in the fourth quarter of 2008 – a decrease compared to 16,133 in Quarter 3 2008, and 17,513 in the fourth quarter of 2007. Cumulative amount of companies by the end of December 2008 was 414,620. In the reported period, 30 new Limited Partnerships were established – that is more than in Quarter 3 2008. Cumulative number of Limited Partnerships made 558.

If we have a look at the chart of company incorporations in the years 2005-2008, where statistical data are divided by quarters of the year, we can see that the most effective year by number of new incorporations was 2007, while this year was not so effective. This decline is certainly connected with global tendencies and the impact of financial crisis on the financial services industry of the British Virgin Islands.

Concerning the Banking & Fiduciary Services, 1 class I Trust licence was issued, bringing the cumulative number of this category of trust licences to 98 by the end of 2008. The Banking sector reported total assets of $2,363,702,000, total investments of $4,681. By commercial banks statistics, liquid assets made 46.48% of total deposits, return on assets made 2.16%, and average risk asset ratio was 27.82%.

Also, in the fourth quarter of 2008 11 new licenses were issued to investment managers and administrators, bringing the total number of licenses to 581.The number of professional mutual fund entities registered has grown to 1,894, compared to the same period of 2007. There were 831 private mutual funds and 228 public funds newly registered in the BVI.

The Insurance statistics showed that there were 11 new captive insurers licenses issued (4 in Q3 2008), 308 renewed and 68 cancelled. The reported insurance post licensing transactions: 6 directors appointments, 6 cases of shareholding change, 5 mergers and 5 liquidations. Also, 5 captive insurers and 1 domestic insurer received approvals for licensing.

In the sphere of Legal and International Co-operation, it was stated that just 12 co-operation matters were started – compared to 26 in the previous quarter; there were 12 onsite inspections held on trust companies and 4 inspections of investment businesses.

Brian Obvi,
Offshore Analyst

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BVI International Finance Centre Welcomes IMF's Decision to Halt Tax Haven Discrimination

The BVI Government welcomed recent decision of the International Monetary Fund (IMF) to stop discrimination between onshore and offshore financial centres. Last month, the IMF has combined its assessment programs for OFCs and FSAP program. In the announcement of this decision, the IMF acknowledged that globalisation has "increased the range of cross-border transactions and intermediation in many countries, as well as by the active efforts of a number of countries to build or promote offshore business."

The British Virgin Islands International Finance Centre, the organization responsible for the marketing and promotion of the BVI financial services industry, welcomed this decision, as creating more level playing field on which financial centres will be judged, based on their regulatory standards rather than geographic location or size.

Information Service of the BVI Government commented that the traditional distinction between onshore and offshore financial centres meant that territories such as the BVI, with significant offshore financial activities, were often regarded as tax havens that support tax evasion, money laundering and other illicit financial activities.

Executive Director of the BVI IFC Mrs. Lorna Smith said: "We have long made the point that it is not a question of onshore or offshore, it is a question of sound or weak regulation and we are delighted that the IMF has recognised this." She also assured that there are strict regulations concerning the operation of the financial sector in the BVI territory.

The BVI IFC is hoping that other international bodies and regulatory organizations will follow the example of the IMF and end this distinction between onshore and offshore jurisdictions.

The IMF also announced about its plans to adopt a more standardised surveillance of the financial sector of economy.

Brian Obvi,
Offshore Analyst

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BVI files evidence to UK Offshore Inquiry

In the beginning of July, the BVI government has submitted evidence to the United Kingdom's parliamentary committee's offshore inquiry. With this move, the jurisdiction became the latest offshore financial center in a growing list to have this done.

With the submission, the territory's government made an attempt to convey the message that the British Virgin Islands is widely recognized as a jurisdiction operating a robust regulatory and supervisory regime in financial services, and that it has a well-established system of international cooperation. Its system of international cooperation has been recognized by such international organizations as the Financial Action Task Force (FATF) and the International Monetary Fund (IMF).

According to Lorna Smith, Executive Director of the BVI International Finance Centre, this is the strong message to have been processed to the Inquiry into Offshore Financial Centres by the UK Parliament's Treasury Select Committee. She also explained that BVI has proved that “it is up to the task of maintaining a high quality of regulation as it grows and develops".

Besides BVI, evidence has been submitted to the inquiry by the authorities in the Cayman Islands, Jersey, Guernsey and Bermuda.

Brian Obvi,
Offshore Analyst

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BVI Delegation Undertakes Acquaintance Visit to the Gulf Region

A delegation from the BVI FSC and territory's autonomous financial regulatory agency met Qatar Financial Centre Authority, QFC Regulatory Authority and Qatar Financial Centre to talk on BVI's regulations, private wealth management and corporate activities. During its visit to Doha in April 2 and 3, the British Virgin Islands delegation met with QFC director-general Stuart Pearce and a senior executive of QIA, and held a seminar on ‘Opportunities for Growth in Financial Services’ in BVI.

This was the first visit of a group from the BVI to the Gulf region, and the delegation was keen to catch the experience of Qatar's development as one of the leading financial centres in the Middle East, and to share its own experience of an established offshore financial centre.

The delegation was leaded by Robert Mathavious, managing director and CEO of BVI FSC, and by Lorna Smith, executive director of International Finance Centre; both of them expressed optimism concerning long-term relationship between the financial systems of Qatar and BVI. Lorna Smith said that since Qatar was home to many luxury yachts, their owners would have the opportunity to get their vessels registered in BVI, after the jurisdiction will receive the Category 1 status for shipping. Smith also said that high net worth individuals in Qatar could seek BVI's expertise in wealth management and tax planning among other portfolios. In her words, BVI is also the fourth largest domicile for captive insurance, and there are a number of opportunities for tax management.

Robert Mathavious also welcomed the recent ranking of the BVI on the 27th place in the list of London's Global Financial Centres Index. It was also placed among the world's “most stable” financial centres.

As part of a fact-finding mission to the Gulf, a delegation of Government and private sector officials from the BVI visited Dubai on March 30 – April 1, the BVI Seminar was held on 31 March 2008 at the Burj Al Arab. The focus of discussion was corporate and investment business and trusts and estate planning.

Brian Obvi,
Offshore Analyst

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BVI IFC Hosts Roadshow in London

This month, the BVI International Finance Centre hosted a roadshow in the city of London to demonstrate its commitment to what is widely recognised as the world's financial capital. The BVI IFC has informed about its plans to visit London, Dubai and Qatar and some regions of Asia, in February 2007, when CEO of BVI IFC Mr.Humphry Leue reported about selecting the roadshow destinations and other marketing initiatives in 2007.

Hosting roadshows in different parts of the world is one of the ways how the BVI territory is popularized by the BVI IFC, and the Financial Services Commission. The event in London that lasted for three days, followed the London Presentation organized by the BVI International Finance Centre in October; this time, it included a series of business development meetings with senior figures at London's leading private banks and law firms. Also, the BVI side organized evening receptions during which more than a hundred delegates were briefly informed on the new developments and opportunities in the BVI's Trust and Corporate business sectors.

Delegates were addressed by the Deputy Premier of the BVI, The Hon. Dancia Penn OBE, the Executive Director of the BVI International Finance Centre Lorna Smith, and the Deputy Managing Director of Regulation at the Financial Services Commission, Kenneth Baker. Some of the BVI's leading financial services practitioners also made their presentations. On the whole, the roadshow delegates were provided with an update on the regulatory environment, legislation, and current trends in trust and corporate business.

Sherri Ortiz, Chief Operating Operator of the BVI IFC, has concluded, - "We were pleased that the Roadshow attracted such interest and delegate feedback suggests that the bond between the BVI and the London financial community will continue to strengthen in the months and years ahead."

Brian Obvi,
Offshore Analyst

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