BVI News

BVI poorer than before, rich on paper but residents suffering

Senior legislator in the House of Assembly, Julian Fraser.

Opposition legislator Julian Fraser has said he believes the territory is not benefitting enough from the territory’s so-called trillion-dollar Financial Services Industry.

“I am seeing more poverty in this territory now than I have ever seen before and yet there are people who believe things are good,” Fraser said while contributing to the parliamentary debate on the Beneficial Ownership Search System (BOSSs) Amendment No. 2 Act of 2019.

“Those same people who are around saying things are good – unless they are pushing drugs – check their bank account. That should not be. Why do we settle for nothing … [or] for second best as a people?”

He continued: “You have over 400,000 companies registered in the Virgin Islands. I’ll give you a simple statistic to wake you up. Of those 400,000 plus companies that are registered in the Virgin Islands, 11,700 of them own 23,000 properties in the United Kingdom that are valued at $63 billion. Those are companies registered right here, what do we get from each of those companies — $450 a year for registration? When they open the company, they pay another $1,000 to register it, and we are happy.”

BVI is gathering crumbs

Fraser, who was one of the hopefuls in the race to become the leader of government business during the 2019 General Election, further said the BVI people are suffering.

The politician also expressed concern that more locals aren’t concerned with what he suggests are unacceptable poverty levels.

“The people of the BVI deserve to be rich. We cannot continue to see money pass through this country, and not even the green of the dollar stays. And I don’t see that level of frustration over this that we need to have. This is a serious matter,” he said.

Lack of scrutiny

He further said he believes that the lack of scrutiny of the sector by previous administrations is what caused the industry to be in its current state.

“If more people got involved and shared their views, it makes for a better system and anyone who fails to recognize that is doomed to fail. I wasn’t kidding when I said people are asking for assistance for everything and it is not a pretence. Some people cry at night. But when morning, they come with a big smiles on their faces, that’s how hard things are,” Fraser said.

The legislator said this should not be taking place at this stage of the territory’s development.

“If we don’t make a change, it is going to be happening for the next 20 years,” he argued.

Fraser was speaking against the backdrop of the recent article by American business magazine, Bloomberg Businessweek. The article titled: Sun, Sand and the $1.5 Trillion Dark Offshore Economy, effectively said that despite the booming offshore economy, the “wealth passes through [the BVI] almost without a trace”.

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27 Comments

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  1. Question says:

    Why should noncitizens of the BVI be responsible for raising the living standard of the citizens of BVI? They already pay incorporation fees, annual fees, in addition to administration fees provided by companies who provide services. Why should they pay to a community above that ? When many alternatives exist around the world

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    • Reason says:

      The reason you should pay more is because the Belonger is l**y and r****t and doesn’t want to work. Thus, you who have more should just give it to the lazy s**ts so then don’t have to work. Now do you understand? Anymore questions?

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  2. true says:

    so the $180,000.000.00 coming in yearly + doesn’t benefit the territory? Thats 180 million minimum

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    • Call me Ishmel says:

      Where does the $180M a year go? When do we get to see the audit? What happened to the BVI Airline Investigation? What happened to the School Wall investigation? What happened to the Pier Park audit?

      When do we start seeing some transparency? $180M is enough for us to live on if it isn’t mis-spent.

      Right?

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  3. Asking for a friend says:

    Where was he for the last 20 years?

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  4. Heave says:

    Let the man speak up he done right. Crunchy crumbs crunchy crunchy

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  5. Gordaguy2 says:

    No one deserves to be rich – in fact that might not be a good goal – what BVI needs is to become more self sufficient by developing local agriculture, IT, fishing, retail and other businesses that can be self sustaining and may lead to exports. The financial services industry can be wiped out with the stroke of a pen because it is in effect a paper based transfer point and only exists because other countries tax certain transactions or disclose certain ownership. The money doesn’t reside in BVI so stop thinking all these assets are BVI assets.

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  6. Kingfish says:

    The government should consider increasing the annual fee from $450.00 to an amount that will not drive business away, these companies are benefiting in many ways by having their companies incorporated in the BVI and believe me they can afford an increase in their annual dues.

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  7. Ausar says:

    I agree with you “Kingfish”!

    Perhaps, one thousand (1000) USD is a good place to start!

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  8. Mindingmybusiness says:

    Glad to see he’s aware of the drug dealers

  9. Reply says:

    Well, Mr. Frasier is right. The BVI has not only been “gathering crumbs”, it has been doing so since the inception of the financial industry.

    What some thought was a good thing or a good deal was not from day one, but I understand the architects of the BVI financial services industry motives as it was presented and sold as a good attempt to generate much needed revenues for the country.

    Those revenues minimal as they have been has been cumulatively beneficial to the country. Also they have created jobs, and helped the local economy in other ways such as in the rental housing market.

    The inconvenient truth however, is that the engineers of the Financial Services industry model perhaps thought that they were getting good money with the corporate registration fee set up alone, but the truth is they were setting the country up to get rape, and rape we have been.

    A woman once told me that “if you find and @ss, ride it, and ride it good”. Well, the BVI has been ridden quite good for decades now, and the ride has almost been for free.

    These companies being the business savvy people they are saw an opportunity to benefit financially from registering their companies here, and they have been taking advantage of it since the beginning. I cannot say I can blame them. This is the money game, and those who play it right, gets richer and stay rich.

    A company that pays currently $1,450 to register a company in the BVI is not only raping the BVI, it is, for lack of a better word, getting away with murder.

    That $1,450 fee is absolutely NOTHING, when one consider you are dealing with million dollar companies. It’s not even a drop in their buckets, and they make that money back in a minute.

    These companies pay no incorporation taxes like they would have been required to do in their home countries of lets say the U.S., or the U.K, thus the attraction to this BVI financial vehicle, and the charge that many are involved in tax avoidance.

    These companies simply set up shop here in the BVI on paper, where they know they do not have to pay corporate taxes. This allows them to get around their own countries tax laws.

    They then turn around and conduct practically all of their business elsewhere often within their own countries as foreign registered companies. A very savvy and cost effective strategy that allows them to make and save millions.

    Meanwhile, the BVI which facilitates all of this has settled for a mere $1450 currently.

    What a bargain it has been, and still is despite the G8 countries are in a hunt for tax revenues and have been pressuring and threatening places like the BVI to disclose beneficial ownership of these companies so that they can go after them for tax money they want, or be black listed economically and financially.

    It is left to be seen if the financial industry is sustainable under the microscope of the G8 and others who are hunting for tax revenues. The current set up cumulatively brings in money despite the bargain these companies get by registering companies here, but I doubt it’s long term viability in it’s current form and given the external forces.

    The BVI is caught between a rock and a hard places. One of the things that attracts these companies here is not only the tax issue but the lack of corporate taxation.

    The other is the anonymity past or present they get. Opening up the registrars fully as the country is being pressured to do from external forces will most likely results in a drop in registrations as has been evidenced.

    On the other hand, raising fees might dissuade some companies to look elsewhere.

    In my opinion, the BVI at some time in the future should consider leveling a minimal corporate tax on top of the registration fees to generate more revenues. I cannot imagine a minimal taxation fee would stop those companies from registering their businesses here if that fee is competitive.

    Lets take for example the U.S. and the U.K. The U.S. corporation tax rate currently is 25.7 percent, whereas, the U.K.’s is between 19 and 20 percent.

    The BVI has room to impose an attractive corporate tax given those numbers that can be attractive and a bargain comparatively speaking.

    If a corporate tax fee of lets say 1-5% tax rate as a beginning is imposed, that is still a bargain. It’s much better than 25.7 or 20 percent from a business standpoint and still a drop in the bucket considering the millions being made by these companies.

    Such taxation would requires some serious thought, analysis, and discussion among the decision makers, but this country needs to stop being used, know its worth, and ask for it.

    Meanwhile, our government needs to forgo these proposed taxes on Western Union/Money Gram transmit fees which is largely on the poor expat community who come largely from poorer Caribbean countries, and are trying to send home something to feed their kids and families who BVI immigration policies makes difficult for them to come here.

    They need to go where the real money is that can truly uplift the country.

    The current financial industry model revenue stream has served its purpose. It’s time for a upgrade.

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    • truth says:

      they pay I think now $550 a year also that $1450 is just the first year so more than 200million a year is paid in the BVI.

      • Reply says:

        Still not enough. More can be recouped from these companies given they are generating millions elsewhere.

        I believe it is inevitable that the BVI will have no choice than to fully disclose beneficial ownership to those interested parties, and when that happens, the industry as we know it will not exist.

        The industry will have to then shift to offering a lower corporate tax if other “offshore” financial centers have to similarly disclose. It will have to become a competitive financial marketplace whereby the lowest corporate tax rate offered will be the attraction.

        This will not happen overnight as the BVI and other “offshore financial centers” have been stonewalling the financial beneficial ownership registry publications and essentially dragging their feet, but I think eventually this is direction we will find ourselves in the future. This country cannot sustain black listing from the larger economic powers.

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    • Raise the fees says:

      The offshore companies are already looking for other locations to register their companies. With the beneficial ownership requirements it will not be Kong before they are all gone. What the smart people of the BVI should do is raise the fees and make their departure sooner. That will teach them all. Then you can find another source for money without working. Wish you all well as you die off

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      • @ Raise the fees says:

        And you will then go some where else, leech off of another country while bad minding it and wishing for its demise.

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  10. vip heckler says:

    That is the money fahie need to tax not the lil bit those expats sending home

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  11. Charnele says:

    This is what you should have been looking at a long time ago instead of cursing the people from the islands and the others getting rich off of you. Think BVIslanders, just think it is a disgrace when people don’t think. All you need is to have basic thinking skills but you can’t even do that, see how you can acquired at least 40% of all that wealth that pass through this territory so freely. If you don’t you will continue to get the crumbs from the masters table and be satisfied.

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  12. Retired says:

    The BVI is in this same predicament in regard to the financial services industry as is Cayman, Bermuda, Anguilla, Turks & Caicos and Gibraltar. Perhaps it’s time for the these OT’s to cooperate with each other instead of competing with each other.

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  13. CW says:

    I guess you might have to focus on working instead of sponsoring expats and stealing a third of their money. I guess you’re going to have to work in tourism instead of pretending what the BVI does is a financial service. It’s MONEY LAUNDERING. the IMF is changing those laws whether you like it or not. Arguing to raise fees on those companies is foolish and short sighted. When all those companies leave after the laws change you will wish you had put such efforts into another area- tourism. But go ahead, talk about how company “get away with murder”. It was you lot that put your eggs in that basket and now same STRUPES crying they don’t like the basket anymore. Economic growth is possible but you have to be willing to work. doing the same old sh*t doesn’t count as working!!!!

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  14. Sir B says:

    Oh Boy y’all authorities worked along with FBI and Liverpool police to hunt billionaires. Mehn u guy chase the money away

  15. Canada, eh! says:

    Being from Canada, I find it funny that people in BVI are getting arrested for simple Marijuana possession. Every country is desperate for more money… perhaps consider legalizing pot like in Canada. Tax the product, another revenue for the gov. (for the people).

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  16. Little fox says:

    How many hospitals haven’t been built? How many children haven’t been educated ? How many roads haven’t been repaired ? How many poor haven’t been helped because of companies preferring registration in the BVI rather than paying due taxes in their own country to get healthy employees, educated people, good infrastructure to help their business ? Are you proud of that ? And now complaining ?

    • Ejuc8id says:

      You have no idea what financial services is and what we do. If you think that, you are simply proving your ignorance.

      And to all who say the expats are leeching anything from here, consider that the expats are earning and making the money here that the BVI depends upon. Putting the relative skills of BVIslanders to one side, even if every child here went to the best university and trained with the best law firms for years of long hours and hard work, there are simply not enough locally to service the level of business that we have and want. Therefore we need foreign people. But somehow we think treating them as second class citizens and ripping them off is a sustainable or effective way of maximizing this opportunity. This temporariness, the revolving door, has not served us well. We have not grown and expanded as we should have done in the last few decades. We are not a united community as we don’t let these people into our communities in any meaningful way.
      If the financial services and tourism expats go, we would be in a very poor position and become dependent on handouts from other countries which would be far less than what these industries bring in. But to be thinking that way is the point. It’s not what we should be doing. We should be working together to build a future for the BVI, build a country that is modern and a place we can genuinely prosper in and be proud of. Let’s talk more about what we could be and how rather than the boring zero sum echo chambers of slavery, race, xenophobia that have for so long held us back.

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