Less than two months after the European Union blacklisted the Virgin Islands as a non-cooperative tax jurisdiction in February, BVI Finance last week hosted the international launch of a report it commissioned that deemed the territory a “safe and reliable centre” that is “not a tax haven.”
The 193-page “Beyond Globalisation” report — parts of which were previously released here at a “soft launch” held during Financial Services Week in November — was shared at a March 29 event at the BVI House in London attended by members of the United Kingdom financial and professional services sector, tourism representatives, economists and academics, according to BVI Finance.
During the event, presenters emphasised the report’s findings about the VI’s contribution to the UK economy, including an estimate that VI companies hold some $153 billion in assets in the UK, with 134,000 jobs created by investment mediated through the VI and $3.5 billion of tax revenues generated for the UK government, BVI Finance stated.
Commissioned
The report was commissioned from the UK-based consulting firm Pragmatix Advisory, which also produced the recent BVI360 “fact-based content series” for BVI Finance.
Pragmatix Advisory Director Mark Pragnell, a macroeconomics consultant who co-authored the report, previously worked as head of commissioned projects at the UK firm Capital Economics, which BVI Finance hired in 2017 to produce a similar report.
The Capital Economics report cost $154,000, with two-thirds funded by government and the rest by the private sector, BVI Finance said at the time.
The agency, however, has declined to disclose the cost of the Pragmatix report.
Findings
The report’s authors noted several “key findings” about the VI’s role in the global economy and its place in an uncertain future. For instance, the territory’s domestic economy is “sound, balanced and stable,” the report states, adding that the jurisdiction offers a “net benefit” to countries worldwide “due to the scale of its contribution to investment and jobs.”
Additionally, more than 375,000 active BVI Business Companies holding assets with a combined estimated value of $1.4 trillion support the view that the territory is a “respected and dependable legal vehicle to facilitate cross-border trade and investment,” according to the report. The VI financial industry also “provides jobs and incomes to 5,000 people from countries in the wider Caribbean region,” as well as supporting around 12,000 jobs in the United States “through its imports,” the consultants found.
With a gross domestic product of $43,000 per capita, levels of prosperity in the VI are “among the highest in the Caribbean” and are indicators of “sound financial position” maintained despite the impacts of the 2017 hurricanes and the pandemic, the report states.
‘Tax-neutral jurisdiction’
It adds that the territory is a “tax-neutral jurisdiction” that doesn’t allow individuals or businesses to avoid or evade their liabilities to other governments.