British Virgin Islands

The BVI meets the challenges of a new financial era

By Sherri Ortiz, Executive Director, British Virgin Islands International Finance Centre (01/12/2011)



As the global economy continues to show only tentative signs of recovery, the need for the world’s most significant financial centres to play their full part in promoting sustainable economic growth grows ever stronger.

The centres’ role in ensuring investors’ money reaches the people who are able to put it to best use is critical if the recovery is to gather pace. We in the British Virgin Islands believe that in order to meet the demands of the new global economy, it is important to pursue a twin track approach. That is, first, to develop a business-supportive environment while, second, also meeting the demands in terms of transparency and governance that global regulators demand.

In the BVI we have taken significant steps in meeting those requirements. Most notably, towards the end of 2011 two key international regulatory bodies lent their support to the work the BVI has done in this regard. The Financial Stability Board (FSB) announced that the BVI was a jurisdiction that demonstrated "sufficiently strong adherence" to new global regulatory and supervisory standards on international cooperation and information exchange.

The FSB announcement came shortly after the jurisdiction was recognized by the Organisation of Economic Cooperation and Development (OECD), as being ready to move to the next phase in its Peer Review programme. The OECD’s confirmation that the BVI is moving forward in meeting international standards follows an assessment of the BVI undertaken in April 2011, and is a commentary on the BVI's legal and regulatory framework, ensuring the jurisdiction has the capacity to implement its extensive network of Tax Information Exchange Agreements (TIEAs). By the end of 2011, the BVI had signed 22 TIEAs, with more to come in the year ahead.

These are just two of the most recent examples of the way the BVI’s commitment to excellence is recognized by outside bodies. Colin Roberts, a UK government official who visited the BVI in April 2011, confirmed the BVI’s status as a well regulated and economically robust territory. Mr Roberts, the Director of Overseas Territories at the Foreign and Commonwealth Office (FCO), said he believed that the BVI was seen as a successful Overseas Territory that was managing its affairs well, and had weathered the global recession, the decline in financial services and the decline in tourism from North America, better than many other Overseas Territories.

An International Monetary Fund report, published at the end of 2010, indicated that the financial crisis had not affected the health of the BVI’s financial institutions. The IMF report acknowledged the strength of the BVI’s regulatory regime and the Financial Services Commission’s (FSC) cooperation as a full partner in international information sharing. The report stated that the regulatory framework for both onshore and offshore financial services was clear and comprehensive, and that the FSC had demonstrated its strength and independence as a regulator.

Other bodies have also highlighted the BVI’s position. The Caribbean Financial Action Task Force (CFATF) examined the capacity, implementation and effectiveness of the BVI’s institutional framework, laws, regulations and systems. The concluding report stated that the BVI had “maintained a robust public policy commitment to ensuring that the Territory plays its part in the global fight against money laundering and the financing of terrorism”. The CFATF further noted that successive BVI governments had: “promoted policies to ensure that the jurisdiction can play its part to effectively combat cross border financial crimes, maintain a reputation for being a clean jurisdiction and where it is found that the jurisdiction has been used by criminals to fully cooperate with the international community”.

So the BVI is firmly committed to meeting all the international standards. But it is also committed to doing so within the framework of an environment which allows business to unleash its maximum potential. What does that mean? BVI vehicles are well known worldwide, easy to use and supported by robust and fair regulations, an efficient and effective regulatory environment, a favourable tax system, and stable government. We have an excellent telecommunications services, no currency controls, the use of the US dollar as the official currency, and high quality infrastructure. In addition, a strong partnership between the public and private sectors is a constant theme running through our policies.

The Role of the IFC

The BVI IFC plays a pivotal role in the promotion and marketing of the BVI as a leading financial centre. Now in its tenth anniversary year, the IFC is committed to ensuring that the BVI retains that unique balance of a sound regulatory framework and an entrepreneurial business community.

The IFC’s marketing strategy seeks to promote the BVI as a jurisdiction to do business with, but also focuses on the specific financial sector offerings that exist in the BVI. In the last twelve months, for instance, we have met with private sector professionals across Europe, and across North and South America. The IFC will continue this programme, to ensure people around the world fully understand what the BVI has to offer.


The territory plays host to many fund professionals and is the Caribbean’s second largest hedge fund domicile, with clients from the US, UK, Europe, the Middle East and Asia. Funds incorporated in the BVI value the environment produced by the Securities & Investment Business Act (SIBA). SIBA, which became law in 2010, codifies some of the practices already undertaken by funds domiciled in the BVI and introduced laws to regulate investment business, public issues of securities and market abuse.


Trusts also value the flexibility the BVI gives them. The Virgin Islands Special Trust Act, 2003, (VISTA) has consolidated the BVI’s position as the location of choice for international trust settlements and operations, and has generated a substantial amount of interest from legal and corporate professionals and business entrepreneurs alike. The implementation of the Financial Services (Exemptions) Regulations in August 2007 clarified the circumstances under which a BVI private trust company (or PTC) must be licensed, and further enhanced the BVI’s international reputation for trusts and estate planning products - with VISTA purpose or charitable trusts being ideally suited to holding shares in PTCs.

Company Flotations

The BVI’s legislative framework has made it a popular jurisdiction for floating companies. The BVI Business Companies Act, 2004 has received positive reviews for its flexibility by global legal practitioners. Five different types of companies can be incorporated under the Act. In particular, investors have welcomed the introduction of segregated portfolio companies (SPCs), as these allow umbrella funds to be set up with limited liability between share classes thus avoiding potential cross-class liability issues.

The Act also includes statutory merger and consolidation provisions, which make it possible for two entities (only one of which need be a BVI entity provided certain conditions exist), to merge, with all the assets of both entities consolidated into the surviving entity.

Captive Insurance

Over the years, the British Virgin Islands have also developed into a major international insurance centre, and the jurisdiction is listed as the world’s fourth largest captive domicile for enhanced insurance products and services. The BVI enacted the Insurance Act, 1994, and this has been further strengthened by the Insurance Regulatory Code of 2009, which ensures full compliance with the International Association of Insurance Supervisors’ Core Principles, further simplifying the BVI’s insurance regime and increasing transparency.

Professional Services

None of this would be possible without the many professional services firms in the territory. The world’s foremost accountancy firms all have a presence in the BVI and there are clear signs of a growing demand for their services, particularly in the areas of mutual funds audit and insolvency practice. In addition, all the major offshore law firms are established in the BVI including Harneys, the first law firm to set up in the jurisdiction over thirty years ago; followed by Conyers Dill & Pearman in 1996; Maples & Calder, Walkers and Ogier; with Appleby and Withers more recent additions. BVI lawyers are widely respected throughout the financial services sector and several firms have opened offices in London and Hong Kong, all of which work closely with their BVI offices.

Shipping Register

The BVI is an acknowledged Category One Red Ensign register, which means that the jurisdiction is one of only ten centres around the world where mega and super yachts of up to 3000 gross tonnage, and general cargo ships of unlimited tonnage, can be registered. The BVI Shipping Registry offers the highest practical standards in technical expertise, safety management and quality assurance, compatible with the Red Ensign Group (REG), to assure first class services. Our facilities include registration of ships, mortgages, discharge of mortgages, change/transfer of ownership and full business, legal, telecommunications and courier services. Ships flying the BVI Red Ensign flag are British ships and are entitled to British Diplomatic and Consular support and Royal Navy Protection. The BVI also has access to the range of technical expertise of the UK Maritime and Coastguard Agency.


The BVI’s financial landscape is built on the premise that jurisdictions that are committed to working to ensure businesses have the maximum opportunity to thrive within the correct legislative framework will be the ones that will help lead the world into a new era. The BVI will continue to strike the right balance between meeting the business needs of the international financial community, and maintaining sound regulatory policies. With such a commitment, the BVI will ensure that it is playing its part in ensuring that the world’s recovery from the recent downturn continues to gather pace.