BVI Leader Affirms Government's Committment To Economic Diversification

by Mike Godfrey, Tax-News.com, Washington

22 March 2006

While the financial services industry continues to underpin the economy of the British Virgin Islands, the territory's leader Dr Orlando Smith has revealed that the government is continuing in its attempt to diversify the economy.

At a community meeting in Road Town at the weekend, Dr Smith was quoted by Caribbean Net News as cautioning that the BVI should not become too dependent on financial services to prop up the economy. He also reportedly explained that the government has been increasing promotional activities in other economic sectors, particularly tourism.

Dr Smith was also quoted as suggesting that agriculture should form the "third pillar" of the BVI economy.

Nonetheless, recent figures show that the BVI's offshore business sector remains its economic lifeblood and main source of wealth. Data released by the BVI International Finance Centre in January revealed that some 57,000 new International Business Companies (IBCs) registered in the British Virgin Islands in 2005, more than any other offshore jurisdiction, and the third highest number of new incorporations in the BVI in 20 years.

The bumper year of company registrations takes the total number of BVI IBCs to almost 700,000 since their introduction in 1984.

Commenting on the figures, Humphry Leue, Chief Operating Officer at the BVI International Finance Centre observed that: "A sustained period of growth has seen over 270,000 new businesses register in the BVI in the past five years, demonstrating the high level of confidence that the international business community has in the BVI as a leading centre for conducting business."

The BVI government is also expecting further significant growth in the jurisdiction's financial services industry during 2006.

Minister for Finance Ronnie W. Skelton told assembly members in his last 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.

The BVI also intends to achieve additional growth in the financial services sector through continued marketing internationally, and by updating legislation to keep pace with global trends.

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