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Report describes VI's company incorporation as 'flexible, lax, & see-no-evil'

-Financial Secrecy Index said the territory has been long linked to a wave of scandals
The Financial Secrecy Index 2015 published by the Tax Justice Network has given the Virgin Islands low marks for its financial secrecy which it said allows for the hiding and facilitating of all kinds of crime and abuses worldwide. Photo:
Director of BVI House Asia Ms. Elise Donovan. Photo: Provided
Director of BVI House Asia Ms. Elise Donovan. Photo: Provided
ROAD TOWN, Tortola, VI – The Financial Secrecy Index 2015 published by the Tax Justice Network has given the Virgin Islands low marks for its financial secrecy which it said allows for the hiding and facilitating of all kinds of crime and abuses worldwide.

This is in the face of a just released press release from the Government of the Virgin Islands which said that the VI is a most important jurisdiction.

High secrecy score

The Financial Secrecy Index said that the VI is ranked at 24th position in the 2015 Financial Index. “It has a relatively high secrecy score of 60, though it accounts for only a small share of the global market for offshore financial services. Yet its relatively low ranking in our index seriously understates its true importance in the world of offshore secrecy, as this report explains,” said the report.

According to the report, the VI has long been linked to wave after wave of scandals. “Lord Oakeshott, a former top UK politician, said in 2013 that the BVI ‘stains the face of Britain’, Nevertheless, it has made some significant improvements in transparency in recent years, improving its secrecy score, though secrecy remains a key hallmark of its offshore sector,” the report pointed out.

It said that the secrecy here comes most importantly from the VI’s “lax, flexible, ask-no-questions, see-no-evil company incorporation regime,” which allows owners of companies to hide behind ‘nominees’ to achieve strong secrecy and to set up companies quickly and at low cost. “This supposed ‘efficiency’ of incorporation has translated into carte blanche for BVI companies to hide and facilitate all manner of crimes and abuses, worldwide.”

“This tiny state where financial services directly make up around half of government revenue is a quintessential example of a jurisdiction captured by offshore financial services, with almost no local dissent against offshore finance," it said.

The report said that in reality, the VI “is merely a conduit or ‘brass plate’ for licit and illicit financial flows between countries.

Over the past years, the developed countries have been hitting out at many of the British Overseas Territories saying that they were tax havens which cheat these countries of tax revenues. France has placed the Territory on a blacklist since 2013 and recently the VI together with Cayman Islands and The Bahamas has been labelled as a tax haven.

Most important jurisdiction

According to the Government Information Service, the Virgin Islands has been ranked as the most important offshore jurisdiction for the sixth consecutive year by Offshore 2020, an independent industry report.

“More than 300 global financial services industry participants contributed to this report, which explores key trends and issues facing the global offshore financial services industry. Industry practitioners have highlighted the Virgin Islands for its ease of doing business, speed and efficiency, legal and commercial certainty, as well as its robust regulatory standards,” the release said.

“The report explains that the BVI offers a well-entrenched conduit for corporate vehicles and funds and it expects that this positive trajectory will continue into 2020. This underscores a major trend from last year’s report, which was that the demise of offshore had been predicted every year, but despite this, the BVI as a jurisdiction, continues to lead the way,” said the release.

Offshore 2020 challenges perception that VI is tax haven

Director of BVI House Asia Ms. Elise Donovan welcomed the findings of the report and stated, “We are pleased to receive such recognition once again from industry practitioners around the world. This is clear recognition of the depth and breadth of our offering, and most importantly, this report challenges the common perception that the BVI is being used for tax driven purposes.”

The director stated that the Territory’s strong performance in this year’s report highlights that the financial services industry is not in demise, but rather that it is very much in demand and it is anticipated that this trend will continue.

She said the BVI is an early adopter of the Organisation of Economic Cooperation and Development’s Common Reporting Standard. In addition, the OECD has rated the BVI as a “largely compliant” jurisdiction in relation to the criteria set out in the ‘Global Forum on Transparency and Exchange of Information for Tax Purposes’.

See the entire Financial Secrecy Index report here:

17 Responses to “Report describes VI's company incorporation as 'flexible, lax, & see-no-evil' ”

  • Amazing (30/11/2015, 16:14) Like (10) Dislike (3) Reply
    "According to the report, the VI has long been linked to wave after wave of scandals." Really? How come we never heard of any? Seems like the reporters who know (have verifiable proof ) on any misuse of BVI companies are the ones who are keeping secrets. I am pretty sure that most ,if not all, BVI companies operating in an onshore jurisdiction has to have an operations license to operate there. Why not put those jurisdictions through the kind of grinding imposed on the BVI, Cayman, and the Bahamas to determine who those same companies really belong to? Is this what we are to accept as a level playing field?
  • Caramel (30/11/2015, 16:55) Like (15) Dislike (9) Reply
    the NDP will kill the financial serves sector by just blaming the international and local media
    • @ caramel (01/12/2015, 08:17) Like (2) Dislike (1) Reply
      that his how this government operate "Its always somebody else’s fault isn’t not us"
  • Just saying.... (30/11/2015, 17:20) Like (7) Dislike (3) Reply
    the people need an appropriate response from their government.
  • So what (30/11/2015, 18:07) Like (5) Dislike (4) Reply
    Who cares. Check the source. Are you really surprised? Get real, they will never be on our side. Next!
  • Dan (30/11/2015, 19:13) Like (5) Dislike (5) Reply
    Zip it shut up go sit down
  • good research (30/11/2015, 19:14) Like (14) Dislike (3) Reply
    VINO is doing it's home work.
  • Calvin (01/12/2015, 08:00) Like (7) Dislike (2) Reply
    Thats the Brits for you....They care only for themselves. Perhaps they need to address the many bank accounts and assets held by the likes of the former Libyan dicator Gadafi, Nigerian Dictator Abacha, and all of the others. London and the US are where all of the money are stashed, not the BVI.
  • facts man (01/12/2015, 08:04) Like (2) Dislike (0) Reply
    we need to address what the media is saying about us from just beating up on the local media
  • Simple truth (01/12/2015, 10:41) Like (10) Dislike (0) Reply
    While this report is another hit on the BVI and other OTC, it does not come as a surprise.

    The UK (England), USA, India and many other countries who are attacking the BVI on an account of transparency, are for lack of a better word hypocrites. In England, no know your client ("KYC") is required to incorporate an English company. Additionally, there are many loop holes which the wealthy such as David Cameron and his friends can exploit. For example, you can incorporate yourself as a company and claim back for everything you have paid out on during the year, even down to your McDonalds breakfast of your fish and chips. With countries such as BVI, Cayman Island and other OTC's struggling to keep market share, the country that is growing of "Offshore" market share in England! This is not by default buy by design!

    The USA - let's look at Delaware and Nevada, no KYC required to incorporate a company and no questions on beneficial owners. There was a recent article which placed the USA at the top of the secrecy list alongside Luxembourg. They implemented FATCA which targets assets held by US nationals outside the US. This is simply a measure to encourage investors to bring the money home. No different to what the UK is doing.

    India – an emerging economy which is burning more coal than any other country and is one of the highest emitters of greenhouse gases. India recently sent a delegate to the UK to study the financial services industry so that they can replicate it in Delhi. In short the industry they are trying to destroy in the BVI and other OTC's they are trying to build at home. Additionally, India's president Modi, the proclaimed reformist visited Singapore and pledge to do business with them, part of the pledge was to make Singapore the jurisdiction of choice when it comes to financial services.

    I am not saying that all runs perfectly with the offshore jurisdictions. There are issues and those issue are not solely a problem for the overseas jurisdictions. Money laundering and secrecy happens in the UK, US, India and wider Europe. If we are serious about fighting crimes such as tax evasion, let's get serious all over the world, not point fingers at a few tiny Caribbean islands. Clean up your house then provide a model or models for a worldwide clean-up campaign. I am not for a do as I say and watch me benefit; this seems to be the approach of some of the larger countries. Food for thought, when you chase business from the countries such as BVI, Cayman Islands and others, the black-market and other less regulated jurisdictions come into play.

  • qc (01/12/2015, 14:25) Like (1) Dislike (2) Reply
    Blah blah blah
  • foreign embarrassment (01/12/2015, 14:58) Like (1) Dislike (0) Reply
    The US is a cockamamee crock. 'Hypocrite' is too nice a word. And to a degree, "tax evasion" is everybody's civic
    duty. It balances out the economy - otherwise no one would have a red cent, and there would be no economy.
    Also true of the UK. Things need to balance, or it goes over. The US is funny though, chases people around the
    world to get a few more dollars out of them while sitting back and watching people being tortured in foreign
    dictatorships. What a sick joke.
  • facts man (01/12/2015, 16:37) Like (0) Dislike (0) Reply
    No justice no peace
  • END OF TIMES (02/12/2015, 09:10) Like (0) Dislike (0) Reply
    In a word, astonishing.

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