Company incorporations dropped sharply in the second quarter of this year, continuing a downward trend that could see 2023 set a two-decade record by underperforming successive 20-year lows in 2019 and 2020.
All told, 4,518 companies incorporated in Q2 2023, down 22 percent from the previous quarter’s 5,830 and down 32 percent year-on-year, according to statistics released recently by the BVI Financial Services Commission.
This means that incorporations hit their lowest quarter in at least 23 years, underperforming even the previous 20-year record low of 4,725 in Q2 2020.
Annual incorporation numbers — which are seen as a bellwether for the health of the financial services industry — have generally been in decline since peaking at 77,022 in 2007.
In 2019 they hit a 20-year annual 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 and Q2 2023 numbers are repeated through the final two quarters, this year would end with just 20,696 incorporations.
Also in Q2 2023, the total number of active business companies registered in the VI decreased by 6,389 from Q1 2023, to 366,050.
Over the longer term, the total 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. If the current trend holds, this year may be end even lower than both 2020 and 2022.
Also in Q2 2023, there were 78 new limited partnerships, an increase of 20 percent compared to Q1 2023, but a 26 percent decrease year-on-year.
Cumulatively, 2,358 LPs have formed in the territory since 2017.
Meanwhile, the total number of new applications to register a trademark in Q2 2023 remained the same when compared to Q2 2022, with 61 partnerships formed.