BVI government welcomes whitelist status announcement. Blacklist expands to include 12 jurisdictions.
On 18 February 2020, EU Finance Ministers updated the EU list of non-cooperative tax jurisdictions, upgrading the British Virgin Islands to whitelist status, which designates the country as a fully co-operative tax jurisdiction in line with all of the tax good-governance standards. Four countries or territories were newly added to the list of non-cooperative tax jurisdictions, as they failed to comply with the required standards within the deadline, joining eight other blacklisted jurisdictions that remained non-compliant. Details of the EU list and the listing process is set out in the Common EU list of third country jurisdictions for tax purposes.
While the BVI has never been blacklisted, it needed to fulfill certain commitments in relation to economic substance. The BVI's compliance process and progress was monitored by the EU prior to the latest delisting announcement. The BVI's new whitelist status recognizes the jurisdiction's role in what the European Council describes as "on-going efforts to prevent tax avoidance and promote good governance principles such as tax transparency, fair taxation or international standards against tax base erosion and profit shifting."
BVI Economic Substance Act
The BVI complied with its commitments by undertaking legislative reform, passing the Economic Substance (Companies and Limited Partnerships) Act in 2018.
The whitelisting signals that the BVI corporate regime is also compliant with EU transparency principles and criteria for good governance, as well as OECD Base Erosion and Profit-Sharing standards. The BVI regime is a leading example of an international financial center that balances the need for financial privacy with the efforts to fight international financial crime. Ownership information is available to regulators in the BVI and EU, but not openly available on the web or for public searches at the Registry of Corporate Affairs.
Robust Financial Regime
The BVI continues to maintain the core factors that have made it a leading jurisdiction—a stable economy and robust court system with a dedicated commercial court; a skilled workforce; and a range of trust, partnership, corporate, and investment vehicle options for the savvy investor. Moreover, the BVI continues to innovate, positioning the Territory as a hub for digital technology and investment, including in fintech. The industry quickly took notice of the flexible and efficient structure of BVI companies that translated ideally for use as crypto currency issuers. Coupled with its tax neutral regime and a financial system that facilitates capital flows, the BVI has quickly gained in rank to become the second-largest cryptocurrency market in the world, outpaced only by the US.
A robust regime for financial regulation with an ongoing commitment to international co-operation on tax matters ensures that the traditional and innovative features of the BVI financial industry are always in step with global compliance standards.
The BVI is proud to be a full partner in the global effort to prevent financial crime, while providing a flexible range of financial structures and vehicles that help to power the global economy.
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