Legal Market Overview
While tourism has been the core of the domestic economy for decades, accounting (outside of the pandemic) for 40% of GDP and a considerable proportion of total employment, the British Virgin Islands (BVI) is also regarded as one of the world’s leading offshore financial services centres. A little over half of the government’s revenue is drawn from company license fees, with total incorporations in the BVI now close to one million. By current estimates, nearly 45% of the world’s offshore companies were formed in the jurisdiction. Elsewhere, the territory is the world’s second largest domicile for offshore investment fund formation (behind the Cayman Islands), as well as the second greatest source of foreign direct investment (behind Hong Kong).
Building on the Investment Act which came into effect in August 2021, the Business Licensing Act – enacted a year later – heralds the introduction of the BVI Trade Commission, responsible for considering and approving investment proposals; and the establishment of a National Economic Investment Fund, designed to finance infrastructure development, environmental protection initiatives, and social development programmes in the BVI.
An increasingly popular destination for crypto fund registrations, the BVI Financial Services Commission regulates all virtual asset-related activities under pre-existing legislative frameworks. As of 1st December 2022, all BVI-registered entities which meet the description of a virtual asset service provider (VASP) will be formally required to comply with the territory’s anti-money laundering, counter-terrorist financing and anti-proliferation finance legislation – collectively known as the BVI AML Laws.