In 2021, new incorporations in the Virgin Islands saw their best year since 2018, recovering somewhat from a disappointing downward trend for the territory’s core financial product, according to fourth quarter statistics released by the Financial Services Commission.
Overall, 2021 saw 36,178 new incorporations, falling just 1,237 shy of 2018, in which 37,415 new companies were incorporated.
Quarterly performance has been rising steadily all year, with Q4 2021 ending on a particularly impressive note. At 9,809, the number of new incorporations in Q4 2021 increased three percent when compared to Q3 2021, and nearly 61 percent from Q4 2020.
Best Q4 since 2015
Moreover, the soaring Q4 incorporation numbers surpassed Q4 2018’s total of 8,916. In fact, Q4 was the best overall quarter since Q3 of 2015, as well as the best Q4 since 2015.
The news of the continued resurgence of incorporations after a disappointing record-low performance in 2020 initially was overshadowed in October by the Pandora Papers leak, which linked VI structures to foreign leaders and other wealthy and famous figures, painting many in a negative light.
But the leak didn’t appear to have any negative effect on incorporations on Q4, which encompasses statistics from October through December.
Addressing the numbers at a press conference on Friday, Premier Andrew Fahie said he plans to soon introduce more legislation to support financial services and encourage the numbers to continue to rise.
“Financial services has been strengthened over the years from government to government to government. What’s amazing is if that had gone down while I was leading, I would take the blame for it,” he said. “Because those things you can only say grace be to God for because in the middle of Covid, we are able to do that.”
The encouraging numbers for 2021 show a sharp contrast over the previous year. With just 22,362 new companies formed, 2020 hit a 21-year low for new incorporations, eclipsing the previous low of 26,150 in 2019.
The VI has announced it has begun work on a commitment to the United Kingdom requirement to establish a public register of beneficial ownership by 2023.
Addressing whether this step could harm incorporations in the future, the premier said, “In some way you’ll always be concerned, but one thing you learn is when you’ve got a lemon, make lemonade. So we’re going to continue to adjust and run between the raindrops and don’t get wet.”
Looking at the number of total active companies, however, paints a slightly different picture. After hitting at least a 14-year low in 2020, total active companies rose to 372,196 in Q1 2021, or 5,832 more than finished out 2020.
However, between Q1 and Q2 of last year, the territory lost all those gains and more. With a loss of 7,216, total incorporations fell to 364,980.
Alongside new incorporations, Q3 also saw an uptick in the number of total active companies, with 372,911. However, Q4 of 2021 again saw a decrease to 368,893, a loss of 4,018.
Total active companies have also been on a longer term downward trend. In 2019 the numbers hit the previous 13-year low of 387,344 after peaking at 481,002 in 2011.
Meanwhile, limited partnerships, which began in the territory thanks to new legislation in 2017, continued to stay steady compared to last quarter, with 170 partnerships formed, just one less than Q3.
However, Q4 saw a 286 percent increase in the number of new LPs compared to Q4 2020. Cumulatively, 2,066 LPs have formed in the territory since 2017.
Meanwhile, trademarks continued to fall slightly. The totalnumber of new applications to register a trademark in Q4 2021 increased from 54 to 70, with a total of 270 for the year — two fewer registered than in 2020 and 44 fewer than in 2019. Since the enactment of the Trade Marks Act in 2015, a total of 1,729 new applications to register a trademark have been filed, the FSC reported.
Five patents were re-registered in Q4, two less than in 2020, but a significant jump from the zero that were registered in Q3.