There continues to be increasing pressure on the BVI and other International Finance Centres (IFCs) from a range of quarters according to the BVI International Financial Centre (BVIIFC) Annual report of 2012. Photo: VINO/File

The BVI IFC is currently headed by Executive Director Ms Elise Donovan who has since been appointed to head the BVI's newly established Asia House Asia in Hong Kong effective January 2014. Photo: VINO/File

The report, which was laid in the House of Assembly on December 19, 2013 by Premier and Minister of Finance Dr the Hon D. Orlando Smith states, “The calls for tighter regulatory standards and greater transparency are increasing, along with the misperceptions about the work that IFCs do and their role in the global economy.”

To counter these misperceptions, the report argues, “the BVI will have to enhance its reputational management efforts to disabuse various constituencies of the misinformation being promulgated by its critics.”

The report further recommends that this be accompanied by an educational campaign on the benefits of the VI’s business solutions, its robust regulatory standards and its longstanding international cooperation regime, particularly with regard to tax matters.

According to the report, the Foreign Account Tax Compliance Act (FATCA) is believed to be a precursor to efforts at harmonising tax policies globally while FATCA and other initiatives by supranational bodies were seen to have significant implication for the Virgin Islands.

Level playing fields

It was noted that these implications may not just be in the form of an administrative burden but rather, may also be manifested in the shifting of business where the initiatives are not applied concurrently and universally across all jurisdictions.

“It is therefore necessary to continue presenting the case for a level playing field and universal application in such initiatives,” the report continued, “not just targeted at IFCs. The right for countries to have their individual tax policies should also be emphasised in the debates.”

Citing additional industry challenges, the report argued that company incorporations, considered the bread and butter of the VI industry, have been down since the global financial crisis and are only now beginning to reach back to 2007 levels.

The BVI IFC is currently headed by Executive Director Ms Elise Donovan who has since been appointed to head the VI's newly established Asia House Asia in Hong Kong effective January 2014.