The first three months of this year set another dismal record for the Virgin Islands financial services industry, with just 8,695 companies incorporating here that quarter —the slowest Q1 performance since 2003, when the Financial Services Commission started publishing quarterly statistics.
About 800 fewer companies incorporated during Q1 of this year than in Q1 2016, according to the FSC statistics.
However, the first quarter of 2017 did see a slight uptick over the last three quarters of 2016: Around 7,000 companies formed in each of those quarters.
Moreover, the total number of active companies has bounced back so far this year to around 431,776 as of March 31, compared to the 416,784 that were active at the end of last year.
Government and industry professionals have attributed the recent slide in new incorporations in part to a series of articles published in April 2016 on the Panama Papers, some 11.5 million documents leaked from the Panama-based trust firm Mossack Fonseca that allegedly suggested that some VI-registered companies were used for money laundering and other illegal activity.
The territory has pushed back against that negative publicity, though, most recently in a report outlining benefits that the VI brings to the global economy.
That report, which BVI Finance commissioned from the London-based firm Capital Economics, argues that VI-registered companies hold $1.5 trillion in assets; help support roughly 2.2 million jobs; and contribute some $15 billion per year to the coffers of governments around the world.
Premier Dr. Orlando Smith said during his Budget Address in January that he expects the report will “add even more to the ‘substance’ arguments that we have been developing in relation to the industry, which will help to inform and explain the important and legitimate role we play in the global economy.”
SEE THE JULY 6, 2017 EDITION FOR FULL COVERAGE.
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