BVI Dominates by Volume of New Offshore Company Incorporations

According to a report from Appleby Global, one of the world’s largest providers of offshore legal, fiduciary and administration services. the British Virgin Islands jurisdiction “continues to dominate” by the volume of new offshore company registrations, with a six-fold lead over the Cayman Islands, which is the nearest comparator of the BVI.

The Group’s latest On the Register Report is devoted to the analysis of company incorporations in the British Virgin Islands, Cayman Islands, Bermuda, the Crown Dependencies, Mauritius and Seychelles, and how activity in these offshore jurisdictions compares to financial centres such as the UK and Hong Kong. 

Appleby stated in the release that the number of new offshore company registrations decreased both in the BVI and the Cayman Islands in the second half of 2012, with a 12% drop to 29,225 new company registrations in the British Virgin Islands, and 13% drop to 4,176 new registrations in the Cayman Islands. Appleby reported an overall decrease of 3.6% in company incorporation activity in the major offshore markets in the second half of 2012, indicating the impact of uncertain global economic conditions on the majority of the offshore markets.

By words of Farah Ballands, the partner and global head of fiduciary & administration services at Appleby, “There are signs that 2013 will be a watershed year in terms of seeing a universal return to pre-2009 activity levels across the offshore jurisdictions.”

Brian Obvi,
Offshore Analyst

Article any source

BVI Premier Confirms Support of G8 Tax Decisions

Last week, Premier and Minister of Finance of the British Virgin Islands Orlando Smith returned from London and gave his comments on G8 Tax Statement, confirming his support of the UK government’s global agenda on tax, transparency and trade, and his agreement to take an active part in the new initiative of multilateral automatic tax information exchange agreed upon by the UK, Germany, France, Spain and Italy. The BVI Premier also confirmed the plans to prepare national actions to meet the FATF standards on beneficial ownership, and to join the Multilateral Convention on Mutual Assistance on Tax Matters.

Orlando Smith noted in his comments: “In the debate about tax and transparency the fact that the BVI already has stronger financial regulation for trust and corporate service providers, as well as rules regarding beneficial ownership than many countries in the G8 itself, has not been adequately appreciated… For many years we have implemented the highest international standards on transparency, accountability and information exchange on tax matters, as set out by the OECD. The BVI will continue to be a constructive partner in evolving and setting the highest standards of regulation.”

Brian Obvi,
Offshore Analyst

Article any source

BVI Premier Takes Part in Pre-G8 Meetings with UK Prime Minister

Premier and Minister of Finance of the British Virgin Islands, Orlando Smith, has accepted the invitation to attend two meetings in London on June 15.

These meetings are hosted by UK Prime Minister David Cameron before the G8 meeting. During the first meeting, the BVI Premier is having an open consultation with the UK Prime Minister, together with leaders from all UK Overseas Territories and Crown Dependencies, while the second meeting is the discussion on the key issues of the G8 summit, including tax, trade and transparency, and involves a range of stakeholders, including representatives from Overseas Territories and Crown Dependencies.

The BVI Premier said in a letter sent to David Cameron that the jurisdiction will in principle commit to joining the Multilateral Convention on Mutual Assistance on Tax Matters - a multilateral agreement having the aim to promote international cooperation to combat tax evasion and aggressive tax avoidance.

Speaking about the meeting, the BVI Premier Dr Orlando Smith welcomed the invitation from David Cameron for consultation, and expressed Government’s support for the G8 agenda on tax, trade and transparency and trust that the G8 members will see the value of, and accept the need for, establishing global standards."

Brian Obvi,
Offshore Analyst

Article any source

BVI Signed TIEA with Canada

Last week, the British Virgin Islands government has signed TIEA with Canada. This tax information exchange agreement became the 24th for the BVI territory, allowing for the exchange of information by request on criminal and other tax matters in accordance with the procedures.

The TIEA was signed by the BVI Premier and Minister of finance, Dr Orlando Smith, and by the High Commissioner for Canada, Gordon Campbell from the Canadian side.

The Premier Dr Orlando Smith welcomed the agreement, and also, during his speech at the signing ceremony, which coincided with the Caribbean Council Reception, stated that the British Virgin Islands is unequivocally against tax evasion, fraud, money laundering and any forms of illegal activity, and supports UK strategy and UK Prime Minister’s agenda for the G8 summit. The Premier took the opportunity to reinforce the association the BVI has with the UK and welcome the spirit of cooperation between the countries.

Brian Obvi,
Offshore Analyst

Article any source

BVI and Other Financial Centres Sign Up for UK Strategy to Enhance Tax Transparency

UK Chancellor of the Exchequer George Osborne welcomed the news that British Overseas Territories with significant financial industry sector, among them the Cayman Islands, the British Virgin Islands, Anguilla, Bermuda, Montserrat and the Turks and Caicos Islands, signed up for the UK government’s strategy on global tax transparency. This strategy will allow these financial centres to automatically share information bilaterally with the UK, and multilaterally with the G5 countries - the UK, France, Germany, Italy and Spain. 

Under the agreement, much greater levels of information about bank accounts, including those held by trusts, will be exchanged, marking a turning point in the fight against tax evasion and illicit finance. The parties involved in the agreement will know the names, addresses, dates of birth, account numbers, account balances and details of payments made into those accounts. This will increase the level of international transparency and will make it much harder for people to escape paying taxes.

This year, Britain’s Prime Minister David Cameron identified tax transparency as a key priority for the summit of the G8. The jurisdictions, including BVI, have also committed to take action to ensure they are at the forefront of transparency on BVI company ownership. Osborne has invited other countries to join the initiative.

Brian Obvi,
Offshore Analyst

Article any source

Government Investigates Global Leak of Information on BVI Companies

The BVI government is investigating the ways how the US-based International Consortium of Investigative Journalists (ICIJ) received information on BVI companies, which is private. According to BVI Premier and Minister of Finance Dr Orlando Smith, this is an “illicit” leak of information used to attack the BVI financial services industry, which is actually fully compliant with the law and international guidelines.

The names of many BVI offshore company owners have been published by ICIJ, in collaboration with the Guardian newspaper and other international sources. This became the result of the leak of internal files of offshore incorporation agencies in the British Virgin Islands and some other tax havens – one of the biggest information leaks in history, which revealed many individuals and the details of their financial dealings through offshore accounts. 

This leak has already caused global reaction from governments and politicians. For example, Britain’s prime minister David Cameron is under pressure to act against the secretive offshore industry at June's G8 summit, as leaked evidence continued to show that politicians and tycoons from all over the world have used the BVI to hide their funds. Also, this week the European Commission announced an action plan to combat tax fraud and evasion, which was approved by Britain, France, Germany, Italy and Spain.

Orlando Smith said in his statement: "While the overwhelming majority of persons use international financial centres for legitimate purposes, there are those that will abuse the system. Where wrongdoing is discovered, appropriate enforcement action is and will be taken. We continually review our legislative regime to ensure transparency, co-operation and compliance with international standards."

Brian Obvi,
Offshore Analyst

Article any source

Next Year Budget To Be Presented On November 15

Next week, BVI Premier and Minister of Finance Hon. Dr. D. Orlando Smith will present the Budget of the Territory for 2013. It will be the second Budget of this Government since taking up office a year ago.

The 2013 Budget presentation is the first to be made since signing of the Protocols for Effective Financial Management with Britain’s Government, which mandate that the BVI jurisdiction builds its reserve funds – the initiative much criticized by the Opposition and named too restrictive for the Government. Under these protocols, which were signed by Premier Smith, the amendments to the Public Finance Management Act were passed by the House of Assembly, but they are still waiting Governor’s approval. 

According to the Public Finance Management (Amendment) Act, 2012, the Budget must include Medium Term Fiscal Plan (MTFP); a Budget Policy Statement; and a Multi-year Budget Document.

Brian Obvi,
Offshore Analyst

Article any source

New UK Minister’s First Official Visit to the BVI

Mark Simmonds, the UK Minister for the Overseas Territories, who was appointed at his post in September 2012, has chosen the British Virgin Islands as the place for his first visit. During his visit on October 22-24, he had joint press conference with BVI Premier and Minister for Finance, Hon. Dr. D. Orlando Smith and Governor Boyd McCleary, where he talked about some aspects of the UK Government’s views about the Virgin Islands.

Mr. Mark Simmonds stated that during meetings with the BVI Premier and his colleagues he discussed such matters as good governance, financial management and economic planning in keeping with the White Paper issued by the British Government. He said: "I have had some extremely good discussions with the Premier and his Ministers and others in my short time here in the BVI. I have been impressed by the progress that is being made in responsible and prudent financial management in the fact that the Financial Management Act has been passed and the procurement processes are now in tune with international standards and that is a sign of a very progressive and determined Government."

Mr. Simmonds also had a private conversation with the Opposition Leader Hon. Ralph T. O´Neal. The Opposition continues to talk about the restrictive nature of the protocols, and about the need for their renegotiation. However, Mr. Simmonds considers the protocols are right, and should not be renegotiated.

After visiting the British Virgin Islands, the UK Minister departed for Anguilla.

Brian Obvi,
Offshore Analyst

Article any source

Mark Simmonds Became New Minister for UK Overseas Territories

According to the Foreign and Commonwealth Office (FCO), Mark Simmonds MP has been appointed the United Kingdom (UK) Minister for the Overseas Territories, after the recent removal from this post of Henry Belligham as part of the reshuffle of Cameron’s Cabinet.

Among the responsibilities of Mark Simmonds, as the Parliamentary Under Secretary of State at the Foreign & Commonwealth Office, there are UK Overseas Territories all over the world including the British Virgin Islands. Other Caribbean territories, except for Dominican Republic, Haiti and Cuba, also are in his sphere of work. 

Simmonds had been a member of the shadow health team when the Conservative Party was in opposition but missed out on a role in the coalition government after the 2010 General Election.

Brian Obvi,
Offshore Analyst

Article any source

UK Minister for Overseas Territories Leaves His Post

The Foreign and Commonwealth minister Henry Bellingham, responsible for Britain’s overseas territories, is leaving his post now. At the moment, no replacement is announced. This is part of reshuffle of the Cabinet of Ministers, initiated by Britain’s Prime Minister David Cameron.

Henry Bellingham did not say whether he had been offered an alternative ministerial position, but expressed the hope that it was not the end of his career in the British government.

Bellingham's first appointment to the Foreign Office was in 2010, and for the past 10 years he was a Conservative frontbencher.

Brian Obvi,
Offshore Analyst

Article any source

Premier Explains Situation with Protocols to the Public Finance Act

The Opposition of the British Virgin Islands expressed its concerns about several issues, including the possible breach of the Protocols for Effective Financial Management by the administration, and the penalties that might follow from the United Kingdom (UK) Government. Hon. Andrew Fahie is going to ask over 30 questions at the sitting of the House of Assembly on September 3. 

The Protocols were signed in April 2012 by Premier and Minister for Finance, Hon. Dr. Orlando Smith on behalf of Government and Mr. Henry Bellingham, the United Kingdom Minister for the Overseas Territories. They called for the implementation and entering into force of the enhanced Public Finance Act by August 2012. 

Premier Hon. Orlando Smith said that the BVI Government has already reviewed the new provisions to the enhanced Public Finance Act, and after they are tabled at the next sitting of the House of Assembly, they will be debated and passed at the next sitting of the House.

Also, Premier said that this set of protocols to which the BVI Government has agreed will provide for effective management of finances, to be fully transparent and accountable. He stated that one of the significant things with the protocols is the question of liquid assets, as the British Virgin Islands jurisdiction from time to time has been in breach of the liquid assets under previous agreements. However, he assured: "I will say based on what is contained now in the protocols, we are in breach, but we also have an agreement that by 2015 we will meet all the requirements of the protocols."

Brian Obvi,
Offshore Analyst

Article any source

Premier Writes Message for BVI Art and Culture Show in London

In his written message to the recently held BVI Art and Culture Show and Territory Day Reception in London that was read by Director of the BVI London Office, BVI Premier Hon. Dr. Orlando Smith stated: “My Government is fully aware of our obligations as a Territory and we stand ready to meet our responsibilities under the new partnership.”

He said that the BVI government welcomed the publication of White Paper of the Overseas Territories and is committed to developing further partnership with the United Kingdom. 

The keynote speaker at the event, Deputy Speaker of the House of Commons Mr. Lidsay Hoyle, MP, said: "It is time for a grown up relationship between the United Kingdom and British Virgin Islands. The Overseas Territories should determine their own future and not have it imposed by Britain."

Brian Obvi,
Offshore Analyst

Article any source

International Tax Authority Set Up in BVI to Deal with TIEAs

The International Tax Authority (ITA) has been established in the Ministry of Finance of the British Virgin Islands. The new unit, designated by Financial Secretary Neil Smith, will ensure the effective exchange of tax information under Tax Information Exchange Agreements signed between the BVI and a number of countries.

Responsibilities of the International Tax Authority include dealing with practical aspects of TIEA requests, negotiating TIEA agreements with potential partners, and developing the framework within the BVI territory for the effective exchange if information. 

ITA will perform the functions section 4(1) of the Mutual Legal Assistance (Tax Matters) Act, 2003 (MLA), which is said to be the base for the BVI international co-operation regime in tax matters. The MLA gives effect to the terms of the Agreements between the Government of the British Virgin Islands and the Governments of the USA and of the United Kingdom for the exchange of information in relation to tax matters, which were signed in 2002. According to the Ministry of Finance, the MLA will apply to any similar agreement that the British Virgin Islands enters into.

Brian Obvi,
Offshore Analyst

Article any source

UK Issued White Paper on Overseas Territories

Last week, White Paper was published by the UK government, aimed at renewal and strengthening of country’s relationship with its Overseas Territories. The document is entitled “The Overseas Territories: Security, Success and Sustainability”, and, according to Foreign Secretary William Hague, it is the first review of the Overseas Territories since 1999. He said that the White Paper is designed to meet the diverse challenges of the British Overseas Territories, and to set the ways how they can be supported.

The White Paper was developed by several government departments working in co-operation, and in consultations with the people and governments of the Territories, including British Virgin Islands. The goals on which the White Paper is focused are: strengthening engagement between the UK and the Territories; strengthening good governance, public financial management and economic planning in the Territories where it is necessary; and increasing the support available to the Territories.

William Hague said in his comments on publishing the White Paper: “As well as having a responsibility to ensure the security and good governance of the Territories, we want the Territories to be vibrant, flourishing communities that proudly retain aspects of their British identity.”

Brian Obvi,
Offshore Analyst

Article any source

UK Receives Feedback on BVI and Other Overseas Territories

The UK government received feedback as part of its consultation on the review of its relationship with country's overseas territories, including BVI and other Caribbean territories. It was stated that the government should support its Overseas Territories to develop sustainable economic models, and provide assistance to ensure good governance by local governments.

One of the most often named challenges that interfere with economic development in the British Overseas Territories was the need for the diversification of jurisdictions' economies. Economic diversification was raised by various respondents to the consultation.

According to the official submission of the Premier of the British Virgin Islands, the contraction of tourism and financial services has had “multiplier effects across all sectors of the society”. This issue was also raised in the official response by the government of the Cayman Islands.

The respondents also said that transparency, poor planning and corruption were the most prominent issues in relation to good governance and stated that the UK could assist with solving these problems by providing audits and advice to local authorities. This issue was raised by residents of the British Virgin Islands, the Cayman Islands and Montserrat.

Brian Obvi,
Offshore Analyst

Article any source

British Foreign Secretary Talks on UK-Caribbean Forum

The British Foreign Secretary William Hague announced that he will lead delegation of UK ministers and senior officials to attend the UK-Caribbean Ministerial Forum. Hague said the commitment to coincide with the government's review of its relationship with the UK Overseas territories which include the Caribbean territories of the British Virgin Islands, the Cayman Islands, Anguilla, Bermuda, Montserrat and the Turks and Caicos Islands, is a sign of the strength the United Kingdom attaches to its 'enduring friendship' with the Caribbean territories. He said: “We believe this will herald a transition to a more modern, dynamic and forward looking affiliation.”

The British Foreign Secretary expressed his opinion that a modern relationship between the UK and Caribbean territories should centre around three principles: first, it should be a modern partnership, an equal relationship that should be based on the shared history and culture and at the same time set the right tone for the twenty-first century. Secondly, the countries need a dynamic partnership that provides real benefits for their citizens. And, finally, the UK's relationship with the Caribbean countries should be a broad-based partnership that involves business, civil society and ordinary people.

Hague also noted that this forum is an “invaluable opportunity for the UK to work with its partners in the Caribbean region for a strong, equal and prosperous partnership based on shared ideals and mutual understanding.”

Brian Obvi,
Offshore Analyst

Article any source

UK Government Strengthens Relationship with Overseas Territories

The UK's Foreign and Commonwealth Office (FCO) highlighted progress made in strengthening its relationship with the Overseas Territories, including British Virgin Islands.

The consultations that were held during the Overseas Territories Consultative Council (OTCC) were focused on the forthcoming White Paper on enhancing the UK's relationship with Overseas Territories, on strengthening the Overseas Territories' international financial centres and stimulating economic growth in the jurisdictions. According to the FCO, the meetings also covered such issues as good governance, financial management, economic planning and taxation policy.

The FCO noted that 2011 was a “landmark year for Overseas Territories”.

Brian Obvi,
Offshore Analyst

Article any source

Annual OTCC Meeting to be Held in London

During the Overseas Territories Consultative Council (OTCC) meeting, which is held annually in London since 1999, and this year will be held on 23-24 November, the UK government will discuss new strategy for its Overseas Territories.

The meeting will be hosted by Henry Bellingham, Foreign Office Minister for the Overseas Territories. It will be visited by premiers, chief ministers and elected representatives from UK Overseas Territories. There will also be ministers from the Departments for International Development; Transport; Environment; Energy and Climate Change; the Treasury; Home Office; Ministry of Defence; Culture, Media and Sport; and Business, Innovation and Skills.

Speaking on the event, Bellingham said: “I look forward to discussing with Territory leaders their ideas for the development of our partnership which will help us develop our thinking for the White Paper on the Overseas Territories that we intend to publish next year."

During the OTCC meeting, the leaders and elected representatives will attend a reception hosted by the Commonwealth Parliamentary Association, and will have bilateral meetings with Bellingham. From the British Virgin Islands, the OTCC meeting will be attended by the newly elected Premier Dr Orlando Smith.

Brian Obvi,
Offshore Analyst

Article any source

International Law Firm Opens Offices in BVI and Singapore

International financial services provider Bedell Trust has announced plans to open new offices in the British Virgin Islands and Singapore. After this, in addition to continuing to service its European-based clients out of Jersey, company's British Virgin Islands legal team, based at Bedell Cristin Jersey, will establish physical presence both in the BVI and Singapore. The BVI law team will also closely co-operate with the Channel Islands offices in providing multi-jurisdictional financial services solutions to customers from Asia.

Bedell Trust will also form an affiliation with an established BVI corporate management services company to support the provision of BVI corporate services to its clients. The company announced that the developments "are central to the Bedell strategy to provide multi-jurisdictional legal and fiduciary services in the key locations where our international client base demands them”.

Brian Obvi,
Offshore Analyst

Article any source

UK Overseas Territories Attorneys General Conference being Held in Cayman Islands

This week, the 20th annual conference was opened in the Cayman Islands, where meet attorneys general from British Overseas Territories, including British Virgin Islands, Anguilla, Montserrat, Turks and Caicos, Pitcairn and the Cayman Islands. Attorneys general from Bermuda, the South Atlantic Territories of St Helena, Ascension and Tristan da Cunha, Falkland Islands and Gibraltar are not present at the meeting.

During the conference, the attorneys general discuss the important issues for their countries with the solicitor general for England and Wales and MP, Edward Garnier, QC, who is the conference chairman, and other officials from the UK, and the Justice Departments of the US and Canada.

Garnier said that in July the National Security Council of the UK government had confirmed the UK's fundamental policy and objective to ensure the security and good governance of the 14 Overseas Territories of the United Kingdom. He also acknowledged the special challenges that attorneys general face in their everyday work, and recognised that the British Dependent territories are very diverse, requiring specifically tailored policies.

Garnier said that, despite the constitutional arrangements between the UK and the Overseas Territories, they should jointly work to improve the link, strengthen mutual ties, good governance and financial management as well as the quality and range of support to the OTs.

Brian Obvi,
Offshore Analyst

Article any source