Gov Mapp submits bill to attract financial services to USVI
FREDERIKSTED, St Croix, USVI— During a press conference held at Government House on St Croix, US Virgin Islands (USVI) on Wednesday morning, April 19, 2017 USVI Governor Kenneth E. Mapp announced that he has officially submitted for legislative approval The Virgin Islands Financial Services Improvement and Corporate Modernization Act of 2017 (FISA).
The Governor had previously partially detailed during a St Croix Chamber of Commerce breakfast meeting at Palms at Pelican Cove.
In a letter to Senate President Myron D. Jackson, Mr Mapp wrote that the Act will “modernise Virgin Islands corporation law, based on best practices in the States and authorises the creation of new statutory trusts, based on Delaware law, which are increasingly utilised by US and international businesses to structure large and sophisticated financial transactions.”
Center for international investment
In urging the Legislature’s approval, the territory’s leader said that FISA will position the US Virgin Islands as a center for international investment, and as a hub for economic activity on par with other states and foreign jurisdictions. It will also create new government revenue streams, more contributions to charitable causes, higher paying jobs in the financial services sector and more spending in the US Virgin Islands’ economy, according to the governor.
At the press event, Mr Mapp said that the new regulations would replace the existing general corporation laws of the US Virgin Islands with a modern corporate code based on successful stateside models. Many states and foreign jurisdictions, he noted, have also modernised their trust laws to meet the evolving needs of US and international businesses and investors.
The proposed new General Corporation Law, which is part of FISA, would eliminate many of the specific requirements for the number of officers and directors and offer a degree of protection against liability lawsuits. While some of these provisions already apply to limited liability companies under US Virgin Islands’ law, the proposed changes would be the first time that such provisions would apply to corporations formed in a United States jurisdiction. Franchise and other corporate filing fees would be increased substantially under the bill for entities seeking the advantages of operating in the territory through its EDC programme, Mr Mapp said.
A section of FISA would provide liability protection for Series Limited Liability Companies, which are firms with several classes of ownership interest. It would limit the extent to which the assets among the various series could be used to satisfy the debt liability of one series class. FISA also includes a chapter entitled “The Virgin Islands Statutory Trust Act”, which would exclude certain entities from certain financial reporting requirements normally applied to corporate subsidiaries. In the transmittal letter, the governor wrote that the US Virgin Islands has a built-in advantage in attracting these entities since it can offer full or partial exemptions from federal tax on many transactions, a benefit no American state can offer. Other sections of the proposed act would allow the establishment of trusts for purposes other than the sole benefit of a particular person or beneficiary.
Mr Mapp said the legislation is the latest component of his administration’s five-year economic growth plan to restore economic stability to the USVI Government.
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20 Responses to “Gov Mapp submits bill to attract financial services to USVI”
The BVI is considered a tax haven like Cayman and that is why companies are attracted to them. USVI is not, they still have to pay US taxes.
It is not surprising though that the USVI is making a move. The VI can only constrain other locales from encroaching on its leading financial services position by establishing a difference it can preserve. The VI must find a way to differentiate itself. It must deliver greater value to customers or create comparable value at a lower cost or do both. It must execute operational effectiveness by performing similar functions better than competitors perform them. The VI has much work to do in holding the USVI and others at bay.