BVIThe British Virgin Islands, or BVI, comprise more than 40 Caribbean islands and islets with subtropical vegetation, white sandy beaches and coral reefs.

The British overseas territory forms part of an island chain, alongside the neighbouring US Virgin Islands. Tortola, the largest of the 16 inhabited islands, is home to more than three quarters of the population.Tourism and offshore finance dominate the economy.Financial and business services account for nearly half of the islands’ GDP. Legislation adopted in the mid-1980s enabled a rapid expansion of international financial services.

Self-rule

The Leewards were administered under a federal system until 1956. After the Leewards had been de-federated, the BVI were granted separate colony status in 1960 and were awarded a limited degree of self-rule in 1967. Subsequent legislative amendments over the next few decades gradually extended the islands’ autonomy.

In 2002 the British Overseas Territories Act granted British citizenship to the islanders, who can hold British passports and may work in the UK and EU. The territory has tightened its immigration regulations; illegal migrants have used the islands as a springboard to the US.

A new constitution adopted in 2007 established a greater degree of self-government. Under this constitution, the post of premier replaced that of chief minister as head of government.

  • Population: 22,200 (via UN, 2006)
  • Capital: Road Town, Tortola
  • Area: 153 sq km (59 sq miles)
  • Major language: English
  • Major religion: Christianity
  • Life expectancy: n/a
  • Monetary unit: US dollar
  • Main exports: Rum, fruit, livestock, sand and gravel

Why the British Virgin Islands (BVI)?

 

The British Virgin Islands (BVI) is a British
Overseas Territory and is the world’s pre-eminent corporate domicile.Since the adoption of its pioneering Business Companies Act 2004 over 500,000 companies have been incorporated in the territory.Approximately 850,000 companies have been registered since 1984.The BVI has a sophisticated and innovative legislative framework. This has made it a popular jurisdiction to incorporate private and holding companies, as well as public companies prior to admission to international stock exchanges. Companies incorporated in the BVI can list on the London Stock Exchange (LSE), LSE’s AIM, the New York Stock Exchange,NASDAQ, the Hong Kong Stock Exchange, the International Securities Exchange and the Toronto Stock Exchange.BVIKatitche-Point-Greathouse-in-British-Virgin-Islands-1

Key facts
• The BVI is the world’s leading offshore centre with more offshore companies than any other country.
• The jurisdiction appears on the OECD’s “white list” reflecting a high level of tax transparency, regulatory and
compliance standards.
• The BVI is recognised as a leading financial centre. The BVI was 34th in the list of leading G2 international financial
centres in the Global Financial Centres Index (GFCI) published by the City of London ranked above Shanghai,
Bahrain, Qatar, Milan, Madrid and Mumbai.
• A Financial Times survey confirmed the BVI as the second largest source of international foreign direct investment
globally, with upwards of US$125 billion invested through the BVI each year.
• The BVI has zero-rated corporation tax, with no wealth, capital gains or estate tax for offshore entities.
• The administrative burden and costs of incorporating or maintaining a company in the BVI are low. BVI companies
are operationally flexible. Corporate governance can be adapted to suit the structure.
• The BVI has a familiar and established legal and court system based on English common law. This offers a stable
and certain framework for investors.
• The BVI has no exchange controls. The local currency is the US dollar.

While many jurisdictions offer a domicile for investment funds, there are a number of advantages to establishing an investment fund in the BVI.

These include:

. a tax neutral environment;

. a stable political and economic jurisdiction which is committed to remaining fully compliant with all supra-governmental bodies responsible for policing the world’s financial markets;

. a recognised and respected legal system derived from English Common Law and supplemented by modern local legislation;

. a dedicated Commercial Court with a dedicated specialist judge and court staff;

. no regulatory restrictions on investment policies or strategies or on performance and other fee arrangements;

. no requirement to appoint local directors, local functionaries or local auditors;

. a fast track procedure for professional funds;

. the ability to amend the memorandum and articles of association of the fund without (in most scenarios) requiring a vote of the members;

. statutory segregated portfolio ring-fencing; and

. comparatively low start-up and ongoing fees and costs.

British Virgin Islands Real Estate

ElegantInvest’s representatives in the British Virgin Islands, were established in 1965, and are one of the longest standing and most experienced agencies in the British Virgin Islands. This chain of 50+ islands offers amazing beauty and diversity within a secure environment – not to mention some of the best sailing in the world.

As part of our international team, we offers expert service in guiding buyers through the entire purchase process in the British Virgin Islands.

Buying Property in the British Virgin Islands

Our experience in the Caribbean region has shown that the British Virgin Islands continue to attract the lifestyle buyer, active business professionals and investors. With the main focus on Tortola, Virgin Gorda and Oil Nut Bay, there is still great interest in surrounding areas such as Guana Island, Necker Island, Peter Island, Biras Creek, Valley Trunk Bay, Little Thatch, Buck Island and Norman Island.

Tortola holds the Capital of Road Town and is the financial hub of the BVI, whereas Virgin Gorda offers some of the world’s best sailing and fishing.

The BVI has the benefit of a low population and a rising standard of living. The GDP per capita ranks the BVI third in the Caribbean basin behind only Bermuda and the Cayman Islands.

Compared with competitive destinations, the BVI has a low crime rate with practically no serious crime. Security is increasingly a factor in the investment equation.The BVI is recognised as an unspoilt group of islands attracting the discerning traveller. The latest statistics indicate a growing tourism industry with tourist arrivals generally increasing over the past five years while remaining unspoilt.

Real Estate

In the midst of a challenging market, real estate in the Bvi is still regarded as a solid investment. The appeal of owning property in the Bvi is enhanced by prevailing lower home prices. The islands are already quite attractive because of the variety of properties available, the pristine and calm waters, the proximity to the us virgin islands and Puerto Rico resulting in easy travel connections, and to the eastern Caribbean with its sister sailing destinations of Antigua, Barbuda and st lucia.

Foreign Ownership

A landholding license is required for all persons who are not Bvi citizens or belongers. The prospective purchaser must provide evidence of identity, means, and character along with an appraisal and the Agreement for sale, and certain other property details. if you intend to rent the property while it is not in use, this will have to be specifically stated in the license, and a trade license for property rental obtained. The landholding licence is personal to the holder, and applies only to the specific property mentioned within it. A separate license is needed for each property.

The major tax applicable to real estate is stamp duty on transfer, which is 4% for Bvi citizens and belongers, and 12% for foreigners. Property taxes are assessed annually, determined by the size and use of the property.

There are several exemptions for foreign owners. stamp duty:

1. does not apply to transfers from to the legal spouse, children or grandchildren of the landowner, exclusively, to a trustee of a trust which has any of those persons as its only beneficiaries, or from the trustee of such a trust to another trustee or to any of those beneficiaries. The exemption also applies when property in the name of a company is transferred to any such relations of the beneficial owner of the company, or the trusts above described.

2. on leases is at a reduced rate of 1.5%.

3. exemptions may be granted by the governor, where a company transfers property to another company which has the same beneficial ownership.

Joint Ownership

Property owned by more than one person must be owned either as a joint tenancy or as a tenancy in common. in a joint tenancy there is a right of survivorship as explained above. in a tenancy in common, each owner has a share, and the deceased’s share passes into his estate. A joint tenancy is presumed unless there is a specific indication on the title that the property is owned in shares.

USVI Current Trends

Like many real estate markets, the usvi has undergone a significant downturn in recent years, both in terms of sales volume and prices. For potential investors or people interested in moving to the usvi or owning a vacation home here, this means there are many opportunities in the current market. villas, homes, condominiums and land are all available at prices comparable to those prevailing a decade or more ago. Although prices are down, the USVI remains an appealing destination for would-be property owners. it is the only predominantly english speaking, us flag destination in the Caribbean. The three major islands offer a contrast in styles: st Croix, the largest island, is known for its historical attractions and laid back lifestyle; st. Thomas bustles with shopping, nightlife, resorts and beautiful beaches; st John offers unparalleled natural beauty on an island that consists of two-thirds national park land.

Procedure for Purchasing

Usually a binding contract of sale is entered into and an initial $1,000 deposit made. The buyer then frequently has a 10-14 day inspection period during which time the contract can be canceled and the deposit returned if the buyer determines that the property’s condition is not satisfactory. if the buyer does not cancel, he will then typically be required to post an additional deposit equal to 10% of the purchase price which is at risk if he fails to close. many contracts will also be contingent on financing which is readily available locally from multiple sources. Closings involving bank financing are currently taking between 45 and 90 days to close; “cash” closings can happen more quickly.

All contract terms are negotiable and purchasers often retain legal counsel to advise them prior to signing a contract.

Taxes

Stamp Taxes

The usvi imposes a stamp tax on the transfer of an interest in real property by deed at rates varying from 2% for properties up to $350,000 to 3.5% for properties over $5,000,000. exemptions are available for certain intra-family transfers and for certain transfers between parent and subsidiary corporations. The seller typically bears the cost of the stamp taxes, but this, too, can be negotiated.

Property Taxes

Property taxes are assessed annually. The property tax system in the usvi has been in a state of flux for years, and the government is in the process of getting caught up on assessments. once caught up, however, the rates on residential properties and condos will be .377% and on land will be .4946%, with higher rates for commercial properties and timeshares. These rates are significantly lower than in many us jurisdictions.

Withholding Taxes

Foreign persons (i.e., non-us persons who do not have legal us residency) are subject to a withholding tax of 10% of the sales price of their usvi property (11% for corporations). This tax can be reduced or eliminated in appropriate cases (such as when there is no profit on the sale) by application to the usvi Bureau of internal Revenue.

Joint Ownership

Property owned by more than one person can be owned either as a joint tenancy or as a tenancy in common. in a joint tenancy there is a right of survivorship – a survivor automatically becomes the owner of the property on the other person’s death. in a tenancy in common, each owner has a share, and upon death of an owner, that owner’s share passes into his estate. A tenancy in common is presumed unless there is a specific indication on the title that the property is owned otherwise, or unless the property is owned by husband and wife. Husbands and wives can hold property as “tenants by the entirety” a kind of joint tenancy that cannot be severed except by divorce, death or a conveyance in which they both join.

Security of Title/Title Insurance

All deeds and other interests in land that the parties wish to have recorded are recorded at the office of Recorder of deeds, which has offices on st Thomas (for st Thomas and st John) and st Croix. most arm’s length transactions are done by warranty deed, although other types of deeds with limited or no warranties are also acceptable. Title insurance is readily available with us-based underwriters including Chicago Title, Fidelity Title and stewart Title. since the Recorder’s office is a record keeping service only and does not guarantee title, title insurance is always advisable.

Foreign ownership

The usvi does not impose any restrictions on foreign ownership of usvi property. non-resident aliens should be aware of the withholding tax on sale of their property, as discussed above.

Estate Planning

if you become a usvi property owner, you will need to include your property here in your estate plan. while there is no usvi estate tax, us citizens may be subject to federal estate tax. in addition, for individual owners of real property, a usvi judicially supervised probate process is required, even if the primary probate is conducted elsewhere. For non-residents, probate can be avoided by holding property in a corporation, limited liability company, partnership or a trust. us residents can generally use their us established trusts to hold their usvi real property. Holding property in a joint tenancy as discussed above is also an option. whatever your plan, do not assume you can change your mind later at nominal cost. some transfers, even for estate planning purposes, can be subject to the stamp tax discussed above

Can foreign real estate investors get residency / citizenship in the BVI?

Non-Belonger Land Holding License holders can also obtain an identification card which permits leave to remain in the BVI for up to 6 months. You can also apply for a certificate of permanent residence.