Chief Minister Enthuses Over BVI Financial Sector's Performance

by Amanda Banks.com, Tax-News.com, London

25 March 2003

The British Virgin Island's key financial services sector performed well last year despite the increasing attentions of global regulatory bodies on offshore jurisdictions, according to Chief Minister and Finance Minister Ralph T. O'Neal.

Outlining the performance of the economy in his 2003 budget, O'Neal gave many examples which showed that business confidence in the jurisdiction was high.

Of particular strength was the captive insurance sector, where 50 new licences were granted by the government. This brings the total number of captive insurers actively managed in the territory to 282, the Chief Minister announced. O'Neal asserted that this makes the BVI the world's fifth largest centre for the captive insurance industry. He also noted that international business company (IBC) incorporations were up on last year.

The jurisdiction continues to be a magnet for mutual funds, the Chief Minister went on to reveal. The total number of approved mutual funds now stands at 2,677, and 331 more Certificates of Recognition and Registration of Mutual Funds had been issued by the end of the year. This compares with a similar figure for the previous year. The government also issued 99 Fund management and administration licences in 2002.

Underscoring the importance of the financial sector for the BVI economy, the Chief Minister pointed out that the government received revenues of almost $100 million from the industry in 2002 , which will be augmented by a further $100 million paid by the Financial Services Commission to a government trust fund this year.

Turning his attentions to the ever increasing regulatory scrutiny of offshore centres, O'Neal said that while the BVI has fared well last year, there is still potential for measures such as the EU Savings and Tax Directive to have a harmful impact on the BVI economy. However, he was insistent that he would not be party to any regulations which would blunt the nation's competitive edge in the financial services field, and announced that he would continue to work with the OECD and UK Treasury for "a level playing field."

On the issue of the BVI's international competitiveness, the Chief Minister confirmed that a range of legislative measures were underway. These include an Insolvency Bill, the Banks and Trustees companies Act, The Insurance Act, The Mutual Funds Act and an amendment to the Trustee Act.

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