This year marks 40 years since the first British Virgin Islands (BVI) International Business Company was incorporated – the catalyst in our territory’s journey to become the trusted and innovative global finance centre that it is today, says Elise Donovan, CEO of BVI Finance.
Over that time, we have played an increasingly important role in the global economy, and now facilitate an estimated $1.4 trillion in cross-border trade and investment. And while we continue to innovate, building on 40 years of progress, we have not shied away from our international commitments in tackling the global scourge of financial crime and illicit finance.
Effecting new policies and working in close collaboration between Government, regulatory and enforcement agencies and our financial services sector is how we have and will continue to implement international best practice. It is how the BVI has continued to keep pace with the ever-changing financial and regulatory ecosystem it sits in, and how it continues to meet the needs of an increasingly complex financial services industry.
A history of progress
Over the past four decades, the BVI has evolved into a pre-eminent global financial hub. It didn’t happen overnight, but the enactment of the International Business Companies (IBC) Act in 1984, coupled with a robust legal framework and the development of a dedicated registry, underpinned the jurisdiction’s appeal to international business for the years to come.
As the regulatory backdrop continued to evolve, we recognised that our own laws must also change to reflect this. The BVI Business Companies Act (BCA) 2004 replaced the IBC Act, modernising our company legislation. Since then, the Act has continued to evolve and just this year changes were made to enhance our ability to combat the use of financial services for money-laundering. Through codifying best corporate governance practices in beneficial ownership and the registering of members, we have strengthened our reputation for transparency and set an example on the international stage.
In addition, the BVI has invested in expanding the commercial legal system to efficiently cater to a growing international clientele without compromising legal integrity. A system rooted in English common law was augmented by establishing the Commercial Court as part of the nine-member country Eastern Caribbean Supreme Court in 2009, ensuring the BVI has the capacity and expertise to meet the needs of an international clientele.
Building on this, we established the International Arbitration Centre in 2014 to provide capacity and technical expertise to settle international disputes. The Arbitration Committee, made up of representatives from five different regions of the globe: the Caribbean, Americas, Europe, Africa and Middle East, and Asia, ensures that operations adhere to the highest international standards.
Combined with political stability, this legal ecosystem has provided a trusted environment for some of the largest companies in the world. As a result, approximately 140 major companies listed on international stock exchanges rely on BVI vehicles and services.
Meeting our international obligations
The BVI continues to rise to the challenge posed by international illicit finance and tax evasion, and it continues to take proactive measure to discharge its international responsibilities and protect its status as a trusted jurisdiction.
This year has been no different, with the ongoing implementation of our National Action Plan which, in collaboration with the rest of the financial services community in the Caribbean, bolsters our anti-money laundering measures and combats the financing of terrorism. Whether through the raft of legislative amendments passed, the establishment of new policies and a new Sanctions Unit this year, or the multitude of information-sharing agreements between our regulatory agencies and their counterparts in other jurisdictions, we are enhancing our ability to tackle financial crime.
A business-friendly approach
We aim to balance this regulatory and legal best practice with our ability to support businesses as a business-friendly jurisdiction. For instance, the BVI remains tax neutral,
ensuring businesses based here but operating externally avoid double taxation. However, they still must pay tax according to the regulations of the countries where their business activities occur.
The BVI also offers a straightforward process for establishing and operating businesses, providing flexibility that supports a wide range of business needs, from asset ownership to orchestrating intricate financial transactions. And following our investment into our digital systems, such as through the development of our digital registry VIRRGIN, businesses are able to do so remotely, at pace, in their own-time zone. This is critical to supporting global business, and one of the key reasons the is BVI an attractive location for incorporation, with over 350,000 active companies on its register.
Looking ahead
Part of our appeal to international businesses and investors is recognising and catering for the changes taking place in global financial services. Nowhere is this more apparent than with companies supporting the nascent digital assets sector, where we are seeing increasing demand for our services, as blockchain and cryptocurrencies enter the financial services mainstream.
The introduction of the 2022 Virtual Assets Services Providers Act, created framework for the regulation of digital asset services, building on the BVI Fintech Sandbox which was introduced in 2020. Combining this with a growing pool of sector experts who understand the needs and vast possibilities for digital assets businesses, we are ideally placed to support a new wave of global businesses.
As the BVI commemorates 40 years since the incorporation of the first IBC, we stand as an example of progress and innovation in the international finance landscape. Our journey to date has been built on a commitment to meeting international standards, and a forward-looking approach to financial services anticipating global business’ needs. This will stand us in good stead for the next 40 years.
