Jonathan reflects on how the British Virgin Islands have adapted over recent years and the jurisdiction’s resilience.
How has the BVI’s corporate services sector fared with implementing the Economic Substance Act?
There was a concern in the industry when this was first aired that it was yet another huge regulatory change and how would the clients react. However, the BVI International Tax Authority together with BVI Finance and Government have responded very well. They engaged UK Counsel to assist with the drafting of legislation and the rules to ensure our compliance which have been accepted by the relevant bodies.
This will no doubt evolve over years and the BVI will continue to ensure that they comply with international standards and remain an attractive jurisdiction for compliant international business.
Has the Act had much of an impact on the number of new incorporations?
I would say numbers have fallen slightly following the introduction of the Economic Substance Act although there has undoubtedly also been an impact from the unrest in Hong Kong and then COVID-19. What we are continuing to see is that while the number of new companies might be down the activity of those companies are greater, in effect evidencing the requirement for and the substance of those BVI companies. BVI companies continue to offer great corporate flexibility which is why they are still very popular as holding structures even where managed in other fiduciary jurisdictions such as Singapore, Guernsey and Jersey.
Is Asia still the dominant source of new incorporations?
Without doubt, the BVI continues to be very popular in Asia and a significant number of new incorporations are from that region. Our office in Hong Kong administers and helps incorporate a large number of BVI companies. The presence of the major international law firms with BVI lawyers in the region together with the corporate service providers also ensures that clients are able to be serviced in the same time zone.
The BVI is currently having to deal with the effect of COVID-19 not long after the devastating impact of Hurricane Irma in September 2017. How well has the local infrastructure recovered from that and to what extent was the finance industry disrupted?
The financial sector in the BVI reacted and responded tremendously well to Hurricane Irma. The BVI Financial Services Commission responded very quickly and allowed service providers to operate remotely until the infrastructure was up and running. We were supported by our offices in Hong Kong and Guernsey and our staff in the BVI showed great strength and resilience to deal with the personal turmoil while still delivering services to our clients.
The response to COVID-19 has been equally strong and as I write this there are no active cases in the BVI which is great news and the financial sector continues to operate well. My principal concern was internet connectivity for all those working remotely but from talking to friends and colleagues it has held up and not affected delivery.
The biggest impact is clearly on tourism and when people are able to travel I would thoroughly recommend a trip to the BVI whether to meet with your registered agent, conduct board meetings or to simply enjoy the wonderful hospitality, amazing beaches and beautiful waters.
You spent 11 years in the BVI before moving to Guernsey in 2018. What were the biggest changes that you witnessed in the industry during your time there, and what do you miss most?
There were certainly a lot of changes both globally and in the BVI for the International Financial Centres from when I moved from Newcastle in 2007 to the time I left the BVI in 2018. In the main I would say they have all been positive and have been embraced by industry, regulators (domestically and internationally) and clients. Key changes have been the introduction of filed Register of Directors, BOSS for confidential uploading of beneficial ownership information and now Economic Substance.
It is definitely a very innovative jurisdiction, which was clearly demonstrated during my time in the BVI, and the financial services sector work very closely with BVI Finance and the BVI Financial Services Commission to ensure they provide attractive and appropriate solutions to clients, this is clearly shown with VISTA and private trust companies for trust legislation and the amendments to the fund legislation introducing incubator funds to assist start-ups
What I miss the most is very simple: friends, the sea and obviously the weather!
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