BVI Government Predicts Confident 2006 For Financial Services Industry

by Mike Godfrey, Tax-News.com, Washington

04 January 2006

The British Virgin Islands government is expecting further significant growth in the jurisdiction's financial services industry during 2006.

Minister for Finance Ronnie W. Skelton told assembly members in his recent Budget Address that according to forecasts, the government will receive almost $130 million from the financial services industry in 2006, representing growth of 15% on the $110 million in revenues predicted for 2005.

Mr Skelton told lawmakers that additional growth will be achieved through continued marketing of the BVI's services internationally. He also stated that it is crucial for the jurisdiction to update legislation to keep pace with trends in the international financial services industry.

One notable example of this has been the amended Business Companies Act. Described by Chief Minister Orlando Smith as a “modern, sophisticated and innovative” piece of legislation, the Business Companies Bill, passed by the BVI Legislative Council late last year, replaced the former International Business Companies Act - a model copied successfully in other jurisdictions - and effectively ends the distinction between offshore and local firms, as all businesses benefit from a 0% income tax regime.

Since its inception twenty years ago, the original IBC Act resulted in the incorporation of over 600,000 IBCs in the BVI.

According to the BVI Financial Services Commission, there has been a "steady stream" of incorporations under the new Act.

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