Virgin Islands company incorporators formed nearly 1,000 fewer companies in the second quarter of 2014 than they did during the same period in 2013, an eight percent drop that marks a negative trend for the financial services industry.
Overall, 11,471 companies were formed during the quarter, and 25,553 were formed in the first six months of the year, compared to 29,144 during the first six months of 2013.
According to recently released statistics from the Financial Services Commission, 2014 marked the lowest rate of incorporations during the second quarter since 2009, when only 9,871 companies were formed following the global financial crisis.
Company incorporations are seen as a key indicator of the overall health of the territory’s financial services sector, which is under increasing pressure from large industrialised nations and international regulators.
But despite the fall in overall incorporations, sub-specialties such as funds registration and investment business are experiencing some growth.
Twenty-eight funds —19 professional, eight private and one public — were registered during Q2 2014, compared to 30 — 21 professional and nine private — during the same period in 2013.
Regulators issued eight new investment business licences to VI-registered companies during Q2 2014, bringing the total number of licensees to 527 since 2010, when the passage of the Securities Investment Business Act created the licensing regime.
The captive insurance industry also experienced a spurt of growth during the quarter, with seven new captives formed, compared to zero formed during Q2 2013. However, the industry has failed to rebound from 2008 highs, when there were 364 captives registered in the territory. A captive is a special type of company formed to insure the risks of a particular company or group.