Last year, company incorporations fell about 22 percent year-on-year, putting the brakes on a modest 2021 recovery from successive 20-year lows in 2019 and 2020.
This year may be shaping up to be even worse for the sector.
There were 5,830 incorporations in Q1 2023, down 13 percent from the previous quarter and down 28 percent year-on-year, according to statistics released recently by the BVI Financial Services Commission.
This means incorporations hit their lowest quarter since Q3 2020, when there were 4,725.
Incorporation numbers — which are seen as a bellwether for the health of the financial services industry — have generally been in the decline since peaking at 77,022 in 2007.
In 2019 they hit a 20-year low of 26,150 — down from 37,415 in 2018 — and they fell even further in 2020, to 22,362.
In 2021, they recovered to 36,178 before dropping to 28,077 last year.
If the Q1 2023 numbers are repeated through the next three quarters, this year would end with 23,320.
Active companies
Even though the number of incorporations dropped in Q1 2023, the number of total active business companies registered in the VI increased by 4,767 from Q4 2022, to 372,439.
Over the longer term, the number of active companies has also been trending downward, though not as steeply as incorporations.
After a peak of 481,002 in 2011, the 2020 year-end tally hit a 14-year low of 366,364. The 2022 year-end tally — 367,672 — was a close second.
Also in Q1 2023, there were 65 new limited partnerships, a decrease of 14 percent compared to Q4 2022 and 42 percent year-on-year.
Cumulatively, 2,280 LPs have formed in the territory since 2017.
Additionally, the total number of new applications to register a trademark in Q1 2023 decreased by 51 percent when compared to Q1 2022, with 55 partnerships formed.