Financial services destroying local businesses?
Opposition Leader Ronnie Skelton has highlighted the negative impacts the financial services sector has on local businesses owned by residents.
The financial services sector is one of the two main economic pillars of the Virgin Islands. But Skelton said leaders need to separate laws for the financial services sector from those for local businesses as residents are bearing the brunt of regulations that shouldn’t apply to their businesses.
Skelton explained that locals have to bear expensive costs to adhere to some of the stipulations in the financial services industry. While speaking in the House of Assembly, he said this is unfair since many of the stipulations are meant to curb practices of international companies and not residents who are striving to become entrepreneurs.
“It is destroying local businesses. Every time financial services puts something in place, it applies to local businesses and it is getting very expensive to maintain some of this stuff, and they (locals) are not doing any international business,” Skelton explained.
“The people financial services is looking for aren’t the local businesses. We really need to get this thing sorted out. We need to separate both types of businesses. If you’re selling candies, peppermint and sugar cakes along the road and you want to protect yourself legally from liabilities, you shouldn’t be subject to a lot of international regulations,” Skelton stated.
Local businesses losing their assets
Skelton also said many local companies are losing their assets to the government simply because they are being subjected to stipulations that shouldn’t apply to them.
“The people are not keeping their companies active so what happens to the assets in those companies? They go back to the Crown — the very person you want to get away from. We’re destroying the very thing we’re here trying to build — local businesses,” Skelton bemoaned.
Later on in the sitting, Third District Representative Julian Fraser agreed with Skelton, saying for years, he has noticed that the financial services sector has had a detrimental effect on local businesses.
“I’ve been preaching that for years, pull the records. Financial services has already destroyed our local businesses. The Attorney General doesn’t agree with me but it’s a fact. Every piece of legislation we pass in this House is there to regulate businesses but, at the same time, it’s choking our local businesses. We need to decouple them, like the way they were before we brought them together,” Fraser said.
He added that lawmakers initially made the decision to put local businesses and the financial services sector under the same laws in an effort to make the Virgin Islands a zero-tax based jurisdiction. But Fraser said the mountain of regulations that local businesses now have to adhere to, has buried them.
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As senior legislator not to recognize the wealth the financial services has brought to the BVI makes your statements absolutely ridiculous.
Their lack of knowledge of proper corporate governance is appalling. The corporate requirements imposed on all businesses, local and international, are light and frankly not that imposing. If local businesses want to benefit from limited liability then they should be subject to the rules, as the rules are less onerous than local businesses would face in other jurisdictions. It is misinformed language like this from our ‘leaders’ which is so dangerous to the BVI.
The documentation required is far off-set by the lack of corporate tax!! This lack of corporate tax allows local businesses a huge advantage over other jurisdictions in any situation where a local company is exporting products. Regardless, the savings are worth every minute spent filling out forms. To any complainants; would you rather give the government 15% or more of your profits or fill out a few forms????
I think he referring to the need for local companies to have and pay registered agents, who then treat all companies, local or international, as cash cows. Registered agents are not required in most juristrictions. We could easily get rid of the need for them with locally owned and operated businesses. They also cost something like $1500 pa minimum which is an unnecessary expense and deterent to local start up businesses.
How about all the BVI regulations around work permits and paperwork required for trade licenses. It is all just needless busy work to torture people not from the BVI.
SO international regulations that give you TAX FREE status is a hassle??
You guys are so entitled and privileged in your positions you have no idea how the rest of the world lives. Life is hard. If you get something you have to work for it.
Getting tons of government revenue from financial services! Locals Getting TAX FREE Business by filling out paperwork!
Hush you noise!
I CAN RECALL FRASER BEEN SAYING THIS FOR YEARS
to earth in 2023! Glad he never became the Premier!
Suppressor, who thinks only a selected of what th r you call elite has entitlement. Your words will forever register in my head.
So the argument is registered agent fees of about 1500 US a year against no corporate tax fee. Sounds like local BVI companies are winning – end of debate. Fraser and Skelton should explain better rather than making blanket statenents. Of course they may not have a real handle on the issue themselves.
way too many regulations and paperwork required for the past few years to be a LTD company, I removed my company from the register.
I expect the $1500 annual fee is easily covered by the money saved due to the low tax rates.
It seems as though they want to pay even less corporate tax than they do now… Yeah, I can’t figure that one out either.
Coukd Mr. Skelton please be more specific as to what he means by these Financial Services stipulations that cause so much hardship?
We dont owe tax to anyone!!
Stop acting as if it is a trade off. We do not owe tax to anyone!!
When the kids want to start their business instead of selling drugs on the corner why should there be impediments to their hustle!?
Global tax efforts are equal to global financial slavery.
We have had enough slavery in these islands!!