British Virgin Islands' Economic Performance Robust, Says Caribbean Development Bank Annual Report

by Robert Lee, Tax-News.com, London

25 June 2001

According to the Caribbean Development Bank's (CDB's) Annual Report, the British Virgin Islands experienced strong growth in its offshore financial and tourism industries last year which has earned the BVI economy the soubriquet of 'robust'.

The CDB was of the opinion that the BVI's offshore financial sector did not appear to suffer any consequences from its blacklisting by the OECD and Financial Stability Forum (FSF). In fact, the BVI gained 'substantial increases in the registration of international business companies (IBCs) and mutual funds,' stated the Bank.

The Bank noted that the tourism sector performed unusually well last year in that the winter high season lasted longer than normal with the cruiseship market registering huge growth. The Bank said that 'although the labour market continued to be characterised by conditions of full employment, the inflation rate remained fairly low.'

The financial sector experienced significant growth with IBC registrations on the increase. In excess of 64,000 new IBCs were licensed during 2000, which represented a 19 per cent increase on figures for 1999, bringing the total number of registered IBCs to 368,000.

Nearly 400 new mutual funds were registered last year bringing the total number of funds registered since the mutual funds registry came into being in 1998 to over 2000. The Bank also reported that 25 new insurance licenses and 21 new trust companies licenses were issued. No new banking licenses were issued last year which, claimed the CDB, reflected 'the BVI’s conservative approach to the issuing of offshore banking licenses.' In addition, total deposits at the commercial banks grew by 10 per cent in the year to the end of September, to $1,056 million. The CDB concluded: 'Prospects for the BVI economy remain good, based on continued expansion.'

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