The British Virgin Islands have been a major offshore financial centre for around a quarter of a century.
The British Virgin Islands have been a major offshore financial centre for around a quarter of a century. While the BVI is widely known as the world’s leading domicile for International Business Companies (now simply Business Companies since an extensive overhaul of the islands’ corporate legislation in 2006) as well as its expertise in fiduciary services, the jurisdiction also has a long track record as a centre for offshore hedge funds.
Over the past few years the jurisdiction’s capabilities as a domicile and servicing centre for international funds have become more widely known around the world, thanks to a concerted drive to lift the island’s global profile undertaken jointly by the government and members of the BVI’s fund services industry. These efforts have been reflected in a growing inflow of new business and a notable expansion of the islands’ fund administration sector, including the establishment of several new players by experienced industry professionals.
So far teams of government officials and industry representatives have taken the BVI’s message to the key global fund management centres of New York and London, as well as emerging markets in Asia and the Middle East. The next region targeted is Latin America, where there remains an important need to correct misconceptions about offshore centres and their role in facilitating global investment flows.
An important result of the these promotional activities to date is the enhancing of existing relationships in regions of the world, such as Asia, where BVI companies are well known and appreciated but where the financial services industry is now looking to the jurisdiction for new products and services. For example, clients in Singapore and Hong Kong have asked for help in organising training and workshops for their staff on how to maximise the advantages of using BVI companies in the context of their own legal and business framework.
The BVI’s experience to date in conducting international promotion over the past few years is also enabling the jurisdiction to fine-tune its marketing approach. While the roadshow format and conference-style setting has been hugely successful in winning the attention of lawyers and other gatekeepers for financial services business and boosting knowledge of the jurisdiction, the range of contacts developed through the efforts of the BVI International Financial Centre is helping the islands’ service providers make direct contact with their potential clientele in target markets.
In turn, users of BVI products and services now have the opportunity to deepen their first-hand understanding of the territory, its financial services industry and the specialist practitioners to whom they are considering entrusting their business.
This approach should help fund sponsors appreciate not only the ease with which funds can be established in the BVI and its pragmatic regulation of investment vehicles aimed at sophisticated investors, but also the islands’ extremely high level of skills and experience in fund administration and corporate management services.
The global industry can also take confidence from the endorsement of the jurisdiction by organisations such as the International Monetary Fund and the CFATF, the Caribbean regional arm of the Financial Action Task Force established to combat money laundering and the financing of terrorism. Receiving a clean bill of health from these supranational regulatory bodies, as well as its membership of Iosco, reinforces the BVI’s standing in the international community as a reputable jurisdiction, which is essential for the promotion of its products and services abroad.
Sherry Ortiz is chief operating officer of the BVI International Financial Centre
