BVI06 TOURIST DIRECTORY - Experience The British Virgin Islands

Offshore Finance: Sun, Sand and Sensible
Legislation Lead to Sustained Growth BY
Close your eyes and imagine lush green hills, perfect blue skies, seven percent. This is a feat we regard as significant, and one that we
awe-inspiring sunsets and beaches where the loudest noise is the thud aim to improve again this year.
of a coconut dropping on the soft white sand. With this in mind, is it This impressive growth is attracting some of the world’s biggest
any wonder that some of the leading players in the international financial blue chip names, a fact that was compounded in March 2006 when
services sector are choosing to escape the stressful pace of European Fortis Prime Fund Solutions, one of the world’s foremost hedge fund
financial centres and head for offshore destinations such as the British administrators and an arm of Fortis Merchant Bank, acquired Hedge
Virgin Islands?
Funds Services (HFS). This purchase of the largest fund administrator
Other than the obvious attraction of working in such idyllic in the jurisdiction, with approximately 2bn in assets under administration,
surroundings, current and upcoming legislation and regulation, such as shows a firm commitment to the region by one of the leaders in the
the much-anticipated Securities and Investments Business Act, global investment and securities business arena.
strengthen the BVI’s financial products and make it a destination of Segregated Portfolio Companies (SPCs) continue to gain momentum,
choice for the major players in the investment fund, trust and captive sparked by the introduction of SPC Regulations at the end of 2005 and
insurance markets.
expanded SPC provisions in the BVI’s enhanced Business Companies
Last year alone, 57,000 new International Business Companies law regime. This means that, in the event of the insolvency of a
(IBCs) registered in the BVI, more than at any other offshore company, the only assets available to creditors are the assets of the
jurisdiction. This caps a sustained period of growth that has seen more company with which the creditors contracted. SPCs are a popular
than 270,000 new businesses register here in the past five years. corporate structure choice for both investment funds and captives,
Indications from the Registry of Corporate Affairs are that under the and their introduction demonstrates the innovative and responsive
new BVI Business Companies Act, figures for the first quarter of this manner with which the BVI meets the needs of its business partners.
year are already ahead of those from last year. The Act provides for the Recent enhancements to the regulatory and legislative environment
incorporation of both internationally operating companies and have kept the BVI at the forefront of the offshore trusts sector as well.
companies doing business in the BVI under one statute. As of January The launch of the VISTA trust attracted great interest internationally,
this year, all new companies incorporated in the BVI have been regis- as did the new provisions dealing with Conflict of Laws Rules
tered under the new statute.
Relating to Trusts and the new Insolvency Act, which gives greater
On the risk management front, while the majority of offshore protection and clarity to investors and creditors than is available
captive insurance domiciles have been reporting a decrease in volume, anywhere else.
the British Virgin Islands’ insurance sector last year achieved overall Forecasts suggest that these trends are set to continue, thanks to
growth of 10 percent, making it the best-reported growth among off- the comprehensive legislation we have laid down and the subsequent
shore domiciles. By the end of
confidence that it has fostered
2005, the Territory had a total of
amongst the business community.
543 captives, of which 380
The BVI financial services sector
renewed or were issued licenses
is booming and continues to attract
last year, solidifying our position
the attention of professionals in both
as the third-largest offshore cen-
hemispheres, from New York to San
tre for captives.
Francisco, and from London and
Our investment business
Paris to Shanghai and beyond.
sector also continues to show
The professional and business
strong signs of growth. At the
opportunities in the BVI are
end of last year, more than 2,500
significant, whether they’re for
private, professional and public
general corporate administration
funds, with an estimated asset
or specialised areas such as
value of more than 100bn, had
joint ventures, M&As, CFCs,
operations in the BVI. A recent
IPOs or business continuity and
survey by Advent Software found
estate planning. And with the BVI’s
that the BVI now ranks second
coastline of sandy beaches,
amongst hedge fund domiciles
warm waters and cool breezes,
with nine percent of the global
the personal benefits require
market, overtaking Bermuda’s
Located in Spanish Town, Virgin Gorda
little explanation.
38 TOURISM DIRECTORY 2007
J. KEVIN FOLTZ
HUMPHRY LEUE, COO, BVI
INTERNATIONAL FINANCE CENTRE