Little Bay is a stunning beach on Tortola’s north shore at the heart of a small and highly sought-after residential community. The dramatic rock formations, lush green mountains on either side of the bay and clear turquoise waters make this an area of outstanding natural beauty.
Red Coral Properties are delighted to offer these outstanding homes for purchase. Offering privacy and tranquility, unique architecture, elegant living spaces and magnificent views of beaches and the ocean beyond these properties capture the very best of the BVI. Shops and restaurants are a short drive away although most days will be spent on the beach swimming, snorkeling, and enjoying picnics with friends and family.
284-344-1661 | info@redcoralbvi.com www.redcoralbvi.com
Envisioning a sustainable future: A 2040 Smart City masterplan for the BVI
Unrated waters: Why the British Virgin Islands needs a sovereign credit rating
Harnessing the wind Catalysts of change: A bright future for renewable energy in the BVI 50 Realising the full potential of HLSCC: Why we need to be radical about higher education 56 BVI, it is time to S.H.I.F.T. G.E.A.R.S.! Exploring the potential economic substance wave
Super yachting and the BVI: Rebuilding a perfect combination
We live in a world that’s changing at incredible speed and is constantTime for a seatbelt and keeping it fastened
Darkness cometh, again! We are entering another period of global darkness that resembles that of the 1930s, and this time it is much more ominous given global economic integration and the significant advancement of technology post 1945. As we go to press, some 90,000 NATO troops are taking part in the alliance’s largest exercises, intended to offer a preview of what the initial stages of a Great Power conflict could look like again in Europe, in a not too distant future. And this is far from the only ongoing machination of what is undoubtedly a pre war stage that is being set across the world. What we are seeing, is the remilitarisation of the world. Earlier, we saw the UK announced that it will move defence spending to 2.5% of GDP by 2030 - some 75 billion pounds above the current budget. This comes in the context of the UK talking about a citizen army, a pre-war generation and conscription. In making the announcement, Prime Minister Rishi Sunak said: “In a world that is the most dangerous it has been since the end of the Cold War, we cannot be complacent. As our adversaries align, we must do more to defend our country, our interests, and our values.” Offering a similar view in his recent shareholders letter, Jamie Dimon CEO of JP Morgan Chase - the US biggest bank stated, “We have entered what resembles the early stages of a pre-war 1930’s.”
Elsewhere globally, we see new powerful alliances in the Indo-Pacific and old ones being strengthened and made fit for purpose, an advancing USChina Cold War, new global south alliances, a soggy Chinese economy, sticky global inflation, higher for longer interest rates, a strong US dollar, a bucketful of other geopolitical risks, climate change, two hot wars - in the Middle East and Ukraine and some 77 countries with elections in 2024 - including India, the US, the UK and the EU - 60% of global GDP. And just in case you are still not leaning forward in your seat, this is all augmented by Artificial Intelligence and the Age of AI curation. This is not about catastrophising but all about awareness and the gathering storms.
What does all of this have to do with our very small speck of the global woods? The critical question should be - are we as a territory prepared and positioned to survive and progress in this emerging global landscape? And if not, what must we be doing now, as a territory with a very high dependence on two economic sectors that thrive on peace and reasonable certainty? We are now in a world where strategy and policy matter irrespective of size.
Last year, as we turned our attention to the big picture - issue defining ideas for the magazine in 2024, we settled on the concept of ‘Big Ideas’ that we believe are critical to the continued development of the territory, from a longterm economic and business perspective. Ideas which are national in scope with the clear potential to strengthen the BVI global competitive position, over the next several decades. Ideas with the potential to corral and drive the national imagination towards what is possible, when we are all rowing in the same direction.
As we have stated in these pages over the years, it seems that as a territory, we no longer dream at the same level of intensity as we did in the immediate decades pre and post securing Ministerial Government in 1967. It is as though our level of curiosity has dimmed the higher up the educational ladder we climb. The success of the territory has always
hinged on our collective curiosity and ability to dream in an inverse proportion to our size. We were always known to punch above our weight. We have seen it happen in our tourism and similarly in financial services, a space in which, some globally still believe we have no place. We are now in an era where disruption is not only the norm, but it is also fast and furious. One where the revolutions are many.
The projects we have chosen for our ‘Big Ideas’ list aren’t celestial in nature. They are far more earthly, doable and truly needed if we really understand that global relevance is our only path to economic success in the future. These projects should be viewed as part of the process of white boarding our future and are intended to cause debate and discussion. The six ‘Big Ideas’ that made our list are as follows - Developing a BVI Smart City (p.34), A Sovereign Credit Rating (p.44), Harnessing the Wind (p.46), Realising the full potential of HLSCC (p.50), BVI, it is time to S.H.I.F.T. G.E.A.R.S.! (p.56), and - Super Yachting and the BVI (p.60).
Beyond our ‘Big Ideas’ we look at the 20th Anniversary of the BVI FSC (p.62) and its remarkable journey in our Special Section - its accomplishments and the myriad challenges it must confront as the sector evolves in a new era of globalisation. Pivoting to tourism, which we believe over the last six years has witnessed its most trying times since its inception in the early 1960s. For insight into these challenges we interrogated a trio of managers who recently assumed leadership positions at three of the destination’s frontline properties: Edward Linsley of Bitter End Yacht Club; Alejandro Chometowski of Virgin Gorda Yacht Harbour and Sandra Grisham of Scrub Island Resort and Marina for an in-depth interview - It’s all about the Experience, Stupid (p.91). Next we look at The Rise of AI in Travel (p.98) and What’s trending in Villa Design & Decor (p.86). Always in high demand is The Outlook for Real Estate (p.100) a comprehensive sector roundup what’s happening in the real estate sector in the BVI. A must read for anyone with or planning to acquire property in the territory, be it residential, commercial or as an investment.
As always, we wrap up the edition with our must read - The Decider (p.128). In this edition we engage the Hon. Lorna G. Smith, OBE who now leads the new Ministry of Financial Services, Labour and Trade for an extensive and substantial discussion on Financial Services and its future in this jurisdiction. Never a sector without multiple challenges lined up like a holding pattern for aircrafts - each waiting on its turn to land at an international airport, the jurisdiction entered its 5th decade with a status as a dominant pillar of the BVI economy in need of an experienced, able and dedicated pair of hands at the ministerial level. It now has that. Now what. This is required reading for anyone living or doing business in the BVI who is keen to understand where our economic puck is heading.
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Introducing some of the talented individuals whose hard work and creativity helped us to produce this edition.
The rise of AI in travel (p.98)
We welcome Gilad Berenstein, an Israeli born - Seattle based AI Entrepreneur, Board Director, and Venture Capital Investor to the pages of Business BVI. Gilad leads Brook Bay Capital, an AI focused fund, and serves on numerous boards of both large traditional and startup businesses, including Virtuoso, Selfbook, Thatch, Swayed, Faye, and others. He is passionate about Travel & Hospitality and other experiential businesses and has a deep background in Artificial Intelligence and Personalisation. In relation to AI and travel Gilad states that “One area that particularly excites me, is AI’s capacity to tell stories on an unprecedented scale, personalised for each unique viewer. Story telling is at the heart of travel, marketing, of education, and is at the core of the human experience. AI will enable us to tell more stories, in new ways, and personalise them for maximum impact.” Gilad is a prolific public speaker and participates in many major industry and technology events.
Sharon’s take (p.24)
In this the third edition of SHARON’S TAKE, Sharon looks at WHAT’S BREWING on Virgin Gorda from a culinary perspective - from new opening of coffee shops to new restaurants, a new monthly farmers market to foodie tours on request. Topping off what she brands as Culinary Chaos for 2024 - is her introduction to three up and coming local chefs whose talent and skills go beyond the kitchen. As she said in her TAKE “We have a standing Caribbean joke, that when the food is oh so good, we say the chef or cook ‘put his foot in it”. Enjoy.
The outlook for real estate (p.100) Edward’s insight into the BVI real estate sector stands singularly above the rest. It is always well informed and driven by research, analysis and lots of metrics . Such sound advice is critical to informing a seller or a purchaser final decision be it residential, investment in a vacation villa or the development of a top tier resort, marina or private island. For 2023 Edward’s findings show “Property transactions in the BVI from 2018 to June 2023 show how the market increased post Hurricane Irma in 2017, with the total number of transactions increasing by 98% between 2018 and 2021 before falling by 30% in 2022. This trend continued in 2023 with a total of 84 transactions recorded by June compared to 128 through June 2022. The trend in the volume of sales measured by total dollar value followed a similar pattern, increasing by 106% between 2018 and 2021. Sales volume in 2023 in the first six months fell by 65% compared to 2022.”
Catalysts of change: A bright future for renewable energy in the BVI (p.46)
As the world goes green so must the BVI. To develop our renewable energy ‘Big Idea’ we turned to Henry Creque, a capable home grown pair of hands. And he stepped up to the plate and delivered - “Sail on’; a force that still holds the power to shape a brighter, cleaner, and more sustainable future for these islands’ people: the inexhaustible power of the wind. As the world charts a path towards a greener tomorrow, the BVI stands poised to embrace the winds of change, harnessing its power to usher in a new era of energy independence, environmental stewardship, economic diversification and exemplar sustainable development.” Henry is a seasoned leader in the field of electrical engineering and energy management, with a distinguished career
that spans over three decades. His expertise encompasses a wide range of critical areas within the energy sector, including strategic planning, project management, and renewable energy development. A most timely read.
A 2040 Smart City masterplan for the BVI (p.34)
Construction in the BVI: Sector update and outlook for 2024 (p.117)
Once we made the decision to anchor our ‘Big Ideas’ with a Smart City concept for the BVI, we broached our crazy idea with Marvin Flax, Managing Director of OBMI-BVI, for his thoughts and pearls of wisdom. He is our go to industry partner and a serial contributor to the magazine on all things construction and planning, with‘Construction in the BVI: Sector Update and Outlook’. Marvin and team OBMI proved to be the right partner to advance such a concept given their deep knowledge of the BVI. OBMI is a global architecture firm widely celebrated for creating distinctive designs for high-end hotels, luxury private residences, and engaging urban areas. The final visionary concept of what a new, modern and sustainable BVI Smart City in 2040 can be, as envisaged by Architects Marvin E. Flax Jr. and Sian Seys-Evans is intended as an idea, and just that.
Super yachting and the BVI: Rebuilding a perfect combination (p.60)
Tourism is the lifeblood of the BVI economy. Our key differential advantage is our myriad marine blessings. Recent government attempts at policy reform have created some turbidity. We decided to include a look at the super yacht sector as one of our ‘Big Ideas.’ We don’t believe in reinventing the wheel. Instead we turn to those who know. Hence our beeline for Bert on what is needed to reposition this sector. It’s not rocket science. As he states - “With a super yacht typically chartering only four times a year during the Caribbean season, for a total regional period of around 42 days, each vessel represents significant local revenue- generating potential, with the BVI’s goal being two-fold – increasing the number of visiting yachts and increasing the length of stay. Building a clear, refined, and long-standing relationship with the super yacht community, the BVI can extend its seasonal attractiveness and create a unique destination selling point that resonates across the very competitive global tourism landscape.” And Bert knows, with more than 20 years of hospitality industry experience, having joined the IGY Marinas team in 2007 as Vice President of Marketing & Sales.
Realising the full potential of HLSCC: Why we need to be radical about higher education (pp.48)
The pivotal role of higher education in the future success of the BVI experiment cannot be under estimated, a fact that Dr. Richard Georges is uniquely situated to address as he does in this article. As President of HLSCC, he leads the academic and administrative matters of the institution, seeking to maintain its accreditation, quality, and growth. Here he pointedly states that “H. Lavity Stoutt Community College is thirty-three years old this year, and up to this time has primarily delivered associate degrees for transfer and occasional baccalaureates or masters programmes with institutional partners. The College is the culmination of a vision of the former Chief Minister whose name it now bears. The next cycle of the College’s existence will require it to review its desire and ability to offer programmes above the associate’s level in order to better serve residents of these islands as well as attract an international student body.”
BVI, it is time to S.H.I.F.T. G.E.A.R.S.!:
Exploring the potential economic substance wave (p.56)
“The BVI must S.H.I.F.T. G.E.A.R.S. to capitalise on economic substance as a potential new revenue stream. This shift requires diversifying the economy to complement its proven success in company incorporation with value-added opportunities. When companies deliberate over relocating their businesses to the BVI, they consider several factors beyond merely economic substance requirements. If the BVI does not address these elements effectively, it could miss this window of opportunity.” Ayana who is a frequent contributor to these pages, recently assumed the position of Executive Director of International Business Regulations in the new Ministry of Financial Services, Labour and Trade.
Special Section on BVI FSC @ 20 (p.70)
Hakeem C. Gravesande, a versatile filmmaker and photographer, specialises in crafting professional, cinematic, and lifestyle visuals. With a keen eye for detail and a flair for storytelling, Hakeem brings narratives to life through his lens, delivering captivating experiences for audiences worldwide. We engaged Hakeem, a young up and coming BVI based photographer for his first assignment for Business BVI, a photoshoot of the BVI FSC management team.
Unrated waters: Why the British Virgin Islands needs a sovereign credit rating (p.44)
Christoph Gutmann is the Managing Director of ATU General Trust (BVI) Limited, which offers a comprehensive range of full fiduciary services from within the BVI, and its sister company, ATU Fund Administrators (BVI) Limited, which provides fund administration and accounting services. He is a native of Switzerland and a Swiss Attorney-at-Law who holds a Doctorate Degree in Law and has a background in finance from working with one of the leading Swiss private banks. Christoph jointly co-authors this most timely article with Binta Jallow. We welcome his keen strategic insight to the pages of Business BVI. The attractiveness of Ratings for foreign investment cannot be underestimated as the article states - “A high rating would make the BVI an attractive destination for Foreign Direct Investment, further diversifying its economic base.”
Unrated waters: Why the British Virgin Islands needs a sovereign credit rating (p.44)
We welcome Binta Jallow to the pages of Business BVI. Binta Jallow is a financial services professional in the BVI and is part of the Relationship Management Team at ATU General Trust (BVI) Limited. She has an in-depth knowledge of regulatory and compliance matters in various jurisdictions, recently receiving her ICA Diploma in Governance, Risk and Compliance. A rising star in the financial services sector, Binta makes her entre with a ‘Big Idea’ on unlocking the BVI untapped potential via a sovereign credit rating for the territory. The article which she co-authors with Christoph Gutmann states that the - “BVI already punches above its weight in the realm of international finance, and its role as a global financial centre is already well-established. Yet, the absence of a sovereign credit rating stands out as an untapped opportunity for amplifying its influence and economic prospects.”
BVI fast facts (p.120)
We are indebted to Patlian for her yeoman’s role of ensuring that our Fast Fact Guide is well researched, current and informed. This Guide provides invaluable fingertip information which is especially useful to persons doing research about the BVI from a business perspective or for relocation purposes.
A treasured caribbean private island hideaway, opens transformed to a new level of luxury.
Peter Island Resort has announced the opening of its rebuilt and re-envisioned luxury private island in 2024. One of the Caribbean’s most anticipated re-openings since the property closures from the Virgin Islands’ 2017 hurricane season, Peter Island Resort has been undergoing its transformation for over six years. Its evolution includes brand new and upgraded accommodations and new state-of- the-art facilities. What remains the same is the resort’s relaxed luxury setting, personalized service, five stellar beaches and hundreds of acres of unspoiled tropical island.
When Peter Island Resort makes its debut, guests will find that it is still charmingly intimate with just 52 room, suite and villa accommodations. What’s new and improved is having all rooms, junior suites and two-bedroom villas on coveted beachfront just steps from the sea along the palm treelined stretch of Deadman’s Beach. Also new is a stunning infinity pool overlooking Deadman’s Beach inviting guests to enjoy the best of both worlds - poolside and seaside. The over-the-top luxury villa, Falcons Nest, is being rebuilt and redesigned on its mountain peak showcasing jaw-dropping 360-degree views of the Virgin Islands. Hawks Nest Villa, conveniently nestled on the hillside overlooking Sprat Bay, is being upgraded and redecorated.
Peter Island Resort is significantly expanding its meetings and events facilities to accommodate groups of up to 180 people with a new 3,000 square foot oceanfront Conference Center flanked by two event lawns and a pre-function veranda spanning the length of the Conference Center. Located on a picturesque stretch of oceanfront near the new Yacht Club, Drunken Pelican restaurant and Sprat Bay, these new meeting facilities will include a dedicated, on-site kitchen, flexible indoor spaces and scenic outdoor areas ideal for events, receptions, meetings and break- out sessions.
The much-loved Peter Island Spa is being upgraded and redesigned in the same stunning location overlooking Big Reef Bay and the beach’s palm tree grove. The Spa will house seven treatment rooms including two couples treatment rooms, welcome and relaxation lounges, fitness center, spa boutique, beauty salon, and men’s and women’s changing rooms. Guests will be enticed to decompress on the spa grounds with a saltwater pool, al fresco relaxation areas and an outdoor hot tub that has a mesmerizing view of Big Reef Bay.
The new Yacht Club will be a must on the itineraries of sailors, boaters and yachtsmen with a marina that can accommodate a range of vessels from power boats, sailboats and catamarans, to super yachts of up to 200 feet. Located in Sprat Bay harbor, the Yacht Club will be its own destination with a dedicated swimming pool for Yacht Club guests, Drunken Pelican restaurant and bar, a commissary, Sea Chest Boutique and a sports recreation area with pickleball, basketball and bocce ball courts and a lawn-games area. To protect the coral reef and marine life surrounding the island, moorings will be located in White Bay, Sprat Bay, Deadman’s Bay, Key Bay and Little Harbour for seafaring guests to enjoy.
Two new casually chic and sophisticated restaurants will delight guests with friendly, top-notch service and delicious cuisine. The Drake Steakhouse, located on Deadman’s Beach, will offer a fine selection of surf & turf dishes with a Caribbean twist, while the Yacht Club’s Drunken Pelican will serve more casual fare, artfully crafted cocktails, and a selection of beers, wines and spirits.
Peter Island Resort, the British Virgin Islands’ newly reimagined luxury private island hideaway, has been a treasured secret among sophisticated travelers for decades. The island features hundreds of lush, tropical acres, five pristine beaches, two luxury villas, and a variety of beachfront accommodations just steps from the sea. Peter Island Yacht Club, a must on every sailing itinerary, offers a full-service marina with dockage that accommodates super yachts of up to 200 feet. The 10,000 square foot Peter Island Spa is a tranquil seaside wellness oasis that takes pampering to the next level. With its unspoiled natural wonders and abundance of land and sea activities including diving, snorkeling, sailing, windsurfing, deep sea fishing, pickleball, hikes up the island’s scenic Sunset Loop and more, Peter Island continues to enchant guests with its one-of-a-kind, private island paradise.
www.peterisland.com reservations@peterisland.net
The Moorings, the world’s premier yacht charter provider, and its sister company Sunsail are thrilled to announce positive developments for their charter operations in the British Virgin Islands to kick off the 2024 calendar year. The Moorings & Sunsail operate the largest fleet of charter yachts in the BVI, and recently welcomed the arrival of 78 new yachts: 19 new monohulls, 35 new sailing catamarans, and 24 new power catamarans to their BVI fleet, with a combined value of $70M. This brings the operators’ combined charter fleet to 254 yachts – a welcome influx of inventory in time for peak sailing season in the Caribbean and another step in the continuous renewal of the sister companies’ fleets.
In addition, The Moorings & Sunsail operation has undergone an extensive hiring process, also in response to increased demand. One of the largest employers in the Virgin Islands, The Moorings & Sunsail Marina now boasts a workforce of 300 employees.
“As a business we have invested heavily in our BVI operation,” says Josie Tucci, VP of Sales & Marketing for The Moorings and Sunsail. “As the largest charter operator in the world’s most popular charter destination, we take great care to ensure a welcoming experience for our guests, and have gone to great lengths to maximize the guest experience through our marina revitalization project, and new fleet replenishment. Ultimately our aim is to provide an unparalleled customer experience to the many thousands of visitors we welcome each year.”
Charter business in the British Virgin Islands is enjoying double-digit growth annually, reinforcing the notion that this is the “sailing capital of the Caribbean”. Visitors are also enjoying the improved ease of access with new direct flights from Miami to Tortola. Ultimately, with demand for charter vacations in the islands soaring, The Moorings & Sunsail remain primed to help usher this demand into a successful 2024 and beyond for the territory.
At Oil Nut Bay, refined luxury combines with the natural beauty to create an extraordinary experience. In that spirit, Oil Nut Bay is thrilled to unveil the breathtaking transformation of the Beach Club and Pavilion—the latest enhancement to the property, and a testament to an unwavering commitment to provide luxury at every turn.
Inspired by the captivating landscapes and the vibrant palette of the Caribbean, the interiors seamlessly blend indoor and outdoor spaces, blurring the boundaries between the two.
Organic shapes, soft hues, and carefully selected materials combine to further create a sensory journey that makes the most of the island’s serene beauty.
Truly, with every step, you’ll discover captivating details that pay homage to the local culture and the majestic surroundings. From the oversized daybeds and cabanas that beckon you to relax, to the thoughtfully placed accessories that accentuate island living at its finest, the redesigned Beach Club promises a harmonious retreat that transports you to a world of refined indulgence.
Every element of the new design has been meticulously curated by UCO Studio, a leading interior design firm, to create an atmosphere that embraces the essence of the island.
Nestled above the breathtaking Oil Nut Bay Marina overlooking Deep Bay, the newly unveiled Marina Ridge neighborhood presents an extraordinary opportunity for those seeking a luxurious Caribbean lifestyle. With four thoughtfully allocated plots, ranging from 2-bedroom to 4-bedroom builds, Marina Ridge offers a customisable haven where one can enjoy easy access to the marina and an array of thrilling water activities.
Marina Ridge homesites provide an unrivalled vantage point, overlooking the 101-slip marina. Immerse in an exciting world of water-based adventures, from island hopping and deep-sea fishing, to snorkeling, kiteboarding, and sailing. The close proximity to the Marina Village offers the convenience of exploring boutique and artisan shops, as well as indulging
in a unique alfresco dining experience at Nova—all within an easy walk from the private enclave.
Each villa concept in The Marina Ridge neighbourhood has been meticulously designed to embody a harmonious blend of luxury and comfort. Inside, the naturally lit, open living concepts create an inviting atmosphere, while the expansive covered decks provide ample space for relaxation and entertainment. The suspended infinity-edge pools offer a stunning visual spectacle, seamlessly blending your personal space with the infinite Caribbean horizon. Every villa boasts luxurious, ensuite bedrooms with full baths that ensure privacy and tranquility.
info@oilnutbay.com oilnutbay.com
INARY
HAOS
Alot is a brewing and a stewing on Virgin Gorda as we enter 2024... at least from a culinary perspective!!
We are looking at what I am calling the ‘food and beverage cookup” of Virgin Gorda’. Hurricane Irma and Maria caused havoc in 2017 and forced many hotels and restaurants to either shutter their doors or downsize. Then when we felt that we were on the way back at the beginning of 2020 we were all hit by the global pandemic. Six years later, both hurricanes and pandemic are gone and Virgin Gorda is being reborn.
Sharon’s take this edition is all about food and drink.
The culinary scene in Virgin Gorda is getting quite exciting now, as young chefs are making their mark in their own right. They are mixing it up and are creating what I call culinary chaos. They are taking culinary in non traditional ways and are embracing the world of private chefs and can be seen in private villas, hosting beach dinners and even hosting private themed lunch and dinner parties.
My mother Norma was one of the noted culinarians on Virgin Gorda and she infused her cooking and pepper sauce making, not only with wonderful local ingredients, but with something called love. She always said that if someone didn’t cook with love they were not worthy of being called a cook or a chef. We have a standing Caribbean joke, that when the food is oh so good, we say the chef or cook ‘put his foot in it”
My mother left a great legacy with her grandson Ariq Flax, who is an under 30 culinary impressionario. Ariq can be seen in and around Virgin Gorda and throughout the BVI, mixing it up at private villa events and on board the seas as a chef aboard yachts. One of his favourite recipes is coconut goat water. As a culinary school graduate of Johnson and Wales and one of the youngest chefs to ever cook with James Beard fellows, he has infused the Virgin Gorda spice and seasoning with international cooking styles and created his own brand. One of his favourite dishes is Butternut squash and crab soup. He has come up through the ranks as a medal chef for BVI Culinary Team and has had stints at Rosewood Little Dix Bay, Rosewood Sand Hill and did an internship with a Caribbean celebrity, Digby Stridiron.
There is also the sister duo of Radiance and Tia Modeste. Radiance is a former BVI Culinary Team Chef, who medalled in the meat category and now has her own company - Exquisite Catering by Ray. Radiance has been cooking for over ten years in professional kitchens. Her versatility has led her to be passionate about her craft. She loves to see the smiles on the faces of happy clients. In Radiance’s own words ”this is a win for me each time.” She fell in love with cooking from an early age. She has been Junior Chef of the BVI and traveled in the United States to represent the territory. Today Radiance is a charter chef and participated in our Emancipation Festival where her culinary creations were on full display.
Her sister Tia is an artist, as well as a great cook and she shows her culinary prowess as a caterer and a charter cook. I asked Tia why she named her company Blue Coconuts and she shared that she believes in being different. She shows this in her menu pairings and favourites include seared tuna with plum passion feta salad, mushroom rice with avocado puree as well as coconut crusted red snapper with spiced mango salsa and coconut rice. What’s fun with Tia, is she has a flair and a personality that are as different and as exciting as her repertoire of culinary delicacies. Combining these two are a win win for anyone who experiences her
Guests to Virgin Gorda have so much to experience on the dining scene and it has been heating up literally. Two new coffee shops have sprung up opening their doors in last October, much to the delight of those of us who wanted to have great choices in a great cup of java. These coffee houses have their own personalities and are run by young entrepreneurs who have infused their vibrant, interesting and innovative beverage concepts to our island. Mo.KA (www. mokacafebvi.com) is owned and operated by Daniella and Orandee. The idea was inspired by Orandee’s various trips and experiences to coffee shops, especially in New York. He wanted residents and guests to have a great coffee experience without having to leave the island. He’d always order a “mocha”, hence the islandized name selection of Mo.Ka. Visiting Mo.Ka is an experience and their cinnamon scones are one of my favourites, along with a piping hot peppermint mocha. Realising that not everyone is a coffee drinker they have a selection of hot and cold teas and its refreshing that a local bush tea is a staple.
BREW, www.vgyh.vg the second new coffee shop is located in the Virgin Gorda Yacht Harbour and also boasts a location at Loose Mongoose in Trellis Bay and at the TB lettsome Int’l Airport, but the shop on Virgin Gorda delights. My favourite here is the oat milk latte with a pump of vanilla or hazelnut. The baristas have a charm all of their own and the service is amazing. They see you coming, and their smiles are as welcoming as the coffee selections. BREW often features local sweet treats and one can sample local tarts and bread pudding.
Virgin Gorda now boasts its very own steak house… Winnie’s Steakhouse (www.winniessteakhouse.com) opened its doors in December. Winnie’s is a labour of love for Frankie and Joycie Walters, honouring the legacy of Frankie’s grandmother Winnie. Their story is one of generational legacy, as Winnie served many a meal from her small mom and pop. The menu is a global exploration of meats and seafood, but still pays homage to Virgin Gorda and Caribbean cuisine. What I also love about Winnie’s is that it is a bit of an escape from open air al fresco dining, which makes it a great option to beat the heat sometimes, as well as for those of us “locals” a chance to enjoy a supper club type setting right in the heart of Spanish Town.
We all have our favourite restaurants and on Virgin Gorda there are many to choose from….but, my highlights in Sharon’s Take is for the new kids on the block and even the culinary delights that are off the beaten path. The Rock Café has reopened after it was virtually destroyed in 2017. Under new ownership and now under the Pusser’s brand, they aim to delight with a menu that features a great steak as well as local fish dishes and the traditional burgers and sandwiches. Delightfully kept intact is the piano bar, that if it could only talk would regale us with many an interesting night and piano player.
I’m so excited about the food scene on Virgin Gorda.
Rosewood Little Dix Bay (www.rosewoodlittledixbay.com) now hosts a monthly farmers market, where delightful fresh breads as well as locally made popsicles in all flavours are available. Local farmers, fishermen and artisans share their wares under shaded trees to the music of Leon and the Hot Shots, a very popular fungi folkloric band. Every once in a while Rosewood also hosts an organic dinner at the resort right in their farm.
(Photo by Jahnai Caul)
White Oleander Destinations
(www.whiteoleanderdestinations.com) also hosts a foodie tour on request, where guests are taken “off the beaten path” to enjoy street food as well as local cuisine and a visit to a local working farm.
As we say…it’s a cookup Virgin Gorda style!
On behalf of the Cheng Family on the occasion of the
January 2024
Good evening honoured guests and associates, my name is Dan Heininger and on behalf of the Cheng family I’d like to add my welcome to everyone to the 60th anniversary of the birth of Little Dix Bay. I had the pleasure and honour to commemorate the 50th anniversary 10 years ago. And while 50 years is known as the golden anniversary and is a momentous event in any life, this year is more meaningful to me, and I would say also in the long history of this resort, because of all that has happened since the last time we gathered to celebrate and honour the inspiration of Laurance Rockefeller.
For a significant period over these last 10 years, Little Dix Bay did not exist for all intents and purposes and its future was very much in doubt. When we met 10 years ago in 2014, we were in the earliest stages of planning a significant renovation of the property. After 2 years of assessing the infrastructure needs of the resort and working through design development, we began work in August 2016. The renovation included extensive works throughout the property and the complete rebuild of certain guestrooms. Also included was an update to the pier restaurant, to the Pavilion where we are now, as well as the kitchen facilities. We anticipated the renovation would take 16-18 months and be completed in early 2018. More wrong have we never been.
At the beginning of September 2017, we were in the last months of the project, with 85% of the works completed. On September 6, Little Dix Bay and all of the BVI took a direct hit by Category 5 Hurricane Irma with nearly 200 mph wind forces and significant flooding. At about 1 pm on September 6, the eye of the hurricane passed directly overhead. The devastation was immediate, utter and complete and the human tragedy was devastating with the loss of 4 lives in the storm and more in the immediate aftermath. Upwards of 85% of housing was damaged or completely destroyed. When I visited several months after the hurricane, it still looked as though a nuclear bomb had exploded.
As the BVI began its massive efforts at recovery and rebuilding, we began cleanup of the site in November 2017 and once again started reconstruction and renovation work in January 2018. Almost 2 years later,
in December 2019, we completed the work and reopened the resort. And then came 2020 and, well, we all know what happened that year. With international travel ground to a halt, we once again found ourselves forced to close the property. And finally, at the end of that year, we were able to re-open the resort.
It has been a difficult road both for the people of the BVI and for Little Dix, one we have traveled together. That we are here today is a testament to the resilience and fortitude of the people of this beautiful country and our amazing associates. Together we have forged a path to making Little Dix Bay as beautiful as it has ever been. Introducing some 21st amenities while still hopefully staying true to Mr. Rockefeller’s vision. This property is so incredible because of that vision. Our guests’ recollections and memories provide some of the best insight into what makes Little Dix so special. Guests remember what it was like 10, 20, 50 years ago because of the fond recollections of this place that are deeply imprinted on their memories and imagination. In walking out of the Pavilion yesterday morning, I overheard one guest recalling that the front desk was originally in the Sugar Mill location because the current reception area had not yet been built. On the boat ride over from Tortola on Tuesday, a charming gentleman from Savannah hit the nail on the head in describing Little Dix Bay. He said they just don’t make them like that anymore, and indeed they don’t. We don’t. No one does. We never could have justified the investment to build Little Dix Bay today, and rebuilding it also made little sense based solely on the numbers. But the Cheng family is committed to the legacy of Laurance Rockefeller as stewards of this property, and working together with our amazing associates and the beautiful people of the BVI, we are here to celebrate one of the most significant milestones in the history of the resort since its opening.
Thank you for joining us for this wonderful day. There is nowhere better to be on the entire planet than right here, right now. I invite all of you to enjoy the splendid food and drink and surroundings of this most special place. Have a great evening everyone.
Over the past 18 months, the Virgin Gorda Yacht Harbour team - ownership and management has engaged in an extensive repositioning strategy aimed at moving what is the preeminent and most complete marina on Virgin Gorda, to the next level. This extensive and ongoing program of work has included on-boarding a new senior management team, significant infrastructure works, a new dinghy dock, expansion of the marketing of the marina inclusive of a new web site with a first time on online booking and payment platform - www.vgyh.vg - significant improvements to our docks, attracting new shops, a spa, new eateries including a coffee shop and an extensive landscaping and signage upgrade. This work will continue in 2024 with further enhancements in the boatyard, as we prepare for the hurricane hauling season commencing in June.
One of the most exciting upgrade to VGYH which is an ideal location for this, is the addition of a seasonal calendar of events designed to attract visitors to the marina and Virgin Gorda while creating new buzz for the destination. The calendar kicked off in style with a very successful inaugural New Year’s Eve celebration, dubbed ‘More for 2024’. This event was built around the concept of sustainability, bringing old and discarded items back to life, creating beauty out of what would have once been thought to be rubbish. Old cars, empty oil drums, used pallets, scrap wood, old bicycles- just some of the items used as part of the decor.
New Year’s Eve is a time of reflection, a time to reset, a time for joy and celebration, and the organising team for ‘More for 2024’ set out to create an environment that allowed for attendees to achieve all of the above. The event spanned three main areas across the marina. The ‘Children’s Village was hosted in the 9,000 sq ft supermarket building and catered to children of all ages, with a range of festival food, face painting, basketball, swings, inflatables, air hockey, and a host of engaging activities. Decorated with hundreds of Chinese paper lanterns, the space became a magical oasis.
The second space was dedicated to general admission. This area showcased our main stage, food and beverage vendors, and interactive art throughout, giving attendees amazing photo opportunities. Our artist in residence, Tia Modeste created numerous pieces of work, paintings on cars and bikes, backdrops and several pieces for the children’s village. Several of this artwork will remain on permanent display at the marina, perfect for Instagram and other social media opportunities. The event also featured art by Tiea Lettsome and Allysa Kaddoura .
Thirdly, the rooftop offered an opportunity for those who wanted a more intimate experience and an ideal platform for viewing the fireworks, with an unlimited bar powered by TICO BVI and a sumptuous menu. The evening was capped with fireworks and a curated entertainment program of the finest of the BVI, from Fungi and Calypso to Reggae and Soca with an incredible performance by USVI artists Rock City ending the evening. Planning for the NYE 2024 is already underway for what is now the new location in the BVI to ring in the new year. Many memories were made on December 31, 2023 and many are already thinking about the possibilities for 2024. www.vgyh.vg
In mid December Ogier announced Nicholas Brookes as the new Practice Partner of Ogier’s British Virgin Islands office, with effect from 1 February 2024.
Ray Wearmouth stepped down after leading the practice for over a decade and retired at that time.
Nicholas joined Ogier in 2014 from the London Bar and is the office head of Dispute Resolution. He was a long-standing member of the BVI Bar Association Council and has appeared in some of the largest high profile and high value litigation in the BVI. Nicholas will work closely with the BVI office’s core leadership team who have worked together for several years.
Michael Killourhy will lead the BVI transactional team, and also assume more responsibilities within the BVI office and deputise for Nick in his absence. Decoy Mactavious is the manager of the practice and Monique Adams leads Ogier’s corporate services business in the BVI, Ogier Global (BVI) Limited.
Ray Wearmouth commented: “I am delighted that Nick is taking over the role having worked so closely with him, Mike, Decoy and Monique for many, many years. We’ve been transitioning to this point slowly but very surely for sometime, and I will be very proud to watch Nick and his team lead the office to new heights. We have been fortunate to have built a top-tier ranked practice in the BVI and have never taken that for granted. Our people sit at the
very heart of that success and having the same senior team move the office forward bodes very well.”
Ogier’s global Senior Partner, Rachael Reynolds KC, paid tribute to Ray’s career as he retires from practice, and said: “Ray has been a cornerstone of the BVI office for many years and has been ranked as a leading top-tier lawyer throughout that time. He has also been a well-known industry leader in the BVI for a very long time and we’re fortunate that Nick and his team have had the chance to work with Ray for so long. We know he plans to remain a close alumni member into retirement and we wish him the very best. We all have every confidence in Nick and his team as they take the office into its next chapter.”
We at Business BVI also extend our very best wishes to Ray as he enters a new phase in his career and life. Ray has done consequential work over the last decade in helping to build the BVI brand in the global financial services space. Not just at the private sector level at Ogier, but also at the national level by serving on numerous advisory committees and panels, all aimed at advancing brand BVI. At Business BVI we will be forever grateful for his voluminous and substantial contribution to the growth of the magazine. He has always been one of the sharpest minds and freshest thinkers in the space.
Tradewind Aviation, the award-winning private aviation specialist and pioneer of the shared charter concept to top leisure destinations, has launched of its new scheduled flights to Virgin Gorda in the British Virgin Islands from San Juan, Puerto Rico.
Tradewind will offer seasonal service to Taddy Bay International Airport (TUPW/VIJ) on Virgin Gorda from Luis Muñoz Marin International Airport in San Juan, Puerto Rico (TJSJ/SJU) which started on November 16, 2023. Multiple round-trip flights will operate on Sundays, Mondays, Thursdays, Fridays, and Saturdays, with additional flights during holiday periods. Pricing begins at $128 oneway, plus taxes and fees, with booking available at flytradewind.com, through traditional and online travel agencies, and with Tradewind’s interline partners United Airlines and American Airlines.
Tradewind’s new service will heighten convenience, comfort, reliability, and sustainability for Virgin Gorda- bound clientele, making it easier than ever to reach the hidden gem of the Caribbean. Consistent with Tradewind’s near-term goal of growing its already strong presence throughout the Caribbean and ensuring seamless transportation between islands, the launch of scheduled service to Virgin Gorda will further solidify Tradewind’s position as the leading airline in the Caribbean.
Guests will enjoy Tradewind’s exclusive private lounge in San Juan, and travel to Virgin Gorda in their modern fleet of Pilatus PC-12 aircraft which are flown by two pilots and feature air-conditioning, a comfortable pressurized cabin, and ample room for luggage. While onboard, guests enjoy complimentary snacks and refreshments, including wine and beer. As part of Tradewind’s commitment to sustainability, all flights are carbon neutral, with carbon offsets automatically purchased by Tradewind.
“We are thrilled to introduce our unique service to access one of our favorite destinations in the Caribbean,” remarks David Zipkin, CoFounder and Chief Marketing Officer at Tradewind Aviation. “Our new scheduled service to Virgin Gorda opens up a world of opportunities for our clientele and local hospitality partners, and will boost travel to the island. Virgin Gorda has long been a top destination for our private charter clients, and we’re looking forward to making travel to one of the Caribbean’s most beautiful islands easier than ever.”AC will launch new services and initiatives designed to meet the demands of its key markets and firmly to establish the Centre’s place as the leading arbitration institution in the Caribbean.
Ms. Glasgow brings to the post over 25 years of experience in the field of financial services and will be cultivating enhanced collaboration between the Government of the Virgin Islands and key stakeholders within the financial services sector to advance business development, strategic objectives, and policy initiatives.
Additionally, the Executive Director will work to coordinate the development of a comprehensive national policy for the financial services sector.
Minister for Financial Services, Labour, and Trade, Honourable Lorna G. Smith, OBE congratulated Ms Glasgow on her appointment.
Honourable Smith said, “Ayana’s recruitment is pivotal in our ongoing efforts to strengthen the ministry’s resources. Her wealth of experience spanning both the regulatory and private sector, is a critical asset in advancing the financial services agenda. I have complete confidence that she will be an outstanding addition to our team.”
Deputy Governor, Mr. David D. Archer Jr. said attracting talented and experienced individuals like Ms. Glasgow is a representation of our commitment to building a World Class Public Service.
Mr. Archer Jr. added, “Public Officers like Ms. Glasgow play a major role in our vision of excellence in the Public Service. I cannot wait to see the incredible work she will do.”
Permanent Secretary in the Ministry of Financial Services, Labour and Trade,
Ms. Petrona Davies, said Ms. Glasgow is highly respected, with great knowledge of the regulatory landscape and the challenges and opportunities within the industry.
“I am confident that Ms. Glasgow will play a key role in advancing the Ministry’s agenda and keeping the Virgin Islands as a leading international business and finance centre,” Ms. Davies added.
Ms. Glasgow expressed her gratitude for the opportunity to serve at this capacity as well as an outlook for her future in this role.
“I am deeply honoured at the opportunity to serve in this role. It is crucial that we continue to foster engagement between key stakeholders, including the private sector and competent authorities, to navigate the challenges we face. My goal is to serve as the linchpin that makes this collaboration happen,” she said.
In this role, Ms. Glasgow will work closely alongside the Minister, as well as with other senior staff in the ministry and stakeholders throughout the industry.
Ms. Glasgow earned a Bachelor in Business Administration from the Acadia University along with a Master’s in Business Administration: Global Development from the University of Phoenix.
The new Executive Director also boasts a decorated career, having served as the Deputy Director, Banking and Fiduciary Services at the BVI Financial Services Commission; Director of Ogier Fiduciary Services (BVI) Limited; Executive Director of Aleman, Cordero, Galindo & Lee Trust (BVI) Limited.
The Government of the Virgin Islands remains committed to ensuring the financial services sector continues to function at global standards.
Spring is always a season of rebirth, a much needed period of renewal and rejuvenation. At Business BVI, spring signifies that we have sent another edition off to the printer - no easy feat, thus clearing the decks to look at the year ahead, which is always a bit of prognostication on one hand and dreaming on the other. Last spring as we turned our attention to thinking about the issue defining ideas for the magazine in 2024, we settled on the concept of ‘Big Ideas’ that we believe are critical to the continued economic and business development of the territory, from a longterm perspective. Ideas which are national in scope and with the potential to strengthen the BVI global competitive position over the next several decades. And most importantly, ideas with the potential to corral and drive our national imagination towards what is possible, when we are all rowing in the same direction.
As we have stated in these pages over the years, it seems that as a territory we no longer dream at the same level of intensity as we did in the immediate decades post securing Ministerial Government in 1967. It is as though our level of curiosity has dimmed the higher up the educational ladder we climb. The success of the territory has always hinged on our collective curiosity and ability to dream in inverse proportion to our size. We were always known to punch above our weight. We have seen it happen in our tourism and similarly in financial services, a space in which some globally still believe we have no place. We are now in an era where disruption is not only the norm but it is also fast and furious. One where the revolutions are many - a technology revolution and an energy revolution are both unfolding in an age of polycrisis.
The projects we have chosen for our ‘Big Ideas’ list aren’t celestial in nature. They are far more earthly, doable and truly needed if we really understand that global relevance is our only path to economic success in the future. These projects should be viewed as part of the process of white boarding our future and are intended to cause debate and discussion.
The six ‘Big Ideas’ that made our list are as follows.
One ‘Big Idea’ that we decided must be on our list, is that of developing a new ‘Smart City’ concept for the territory. A territory that is growing and one with clear national aspirations. A territory determined to remain competitive in our current economic space - tourism and financial services - while doubling down on new areas of potential, new buckets of opportunity in the emerging Blue, Green Orange Economy. Surrounding them with essential and wellness friendly city services and features. The goal is not just to create a modern urban centre, but to cultivate a space that truly celebrates the BVI, its heritage, fosters inclusivity, leverages the territory’s strengths, embraces sustainable practices and looks towards the future.
A sovereign credit rating serves as an analytical tool to evaluate a territory’s ability to meet its debt obligations. Developed by credit rating agencies such as Moody’s, Standard & Poor’s (S&P), and Fitch, these ratings are essential for gauging a territory’s fiscal health. But beyond the numbers, they offer a plethora of benefits that are particularly significant for the BVI. The BVI already punches above its weight in the realm of international finance, and its role as a global financial centre is already wellestablished. Yet, the absence of a sovereign credit rating stands out as an untapped opportunity for amplifying its influence and economic prospects.
In the tranquil embrace of the Caribbean Sea, the Virgin Islands stand as a paradise of majestic islands, azure waters, and boundless natural beauty. Yet, beneath this idyllic exterior lies a hidden force: a force that, figuratively and literally, transported us from whence we came to where we are today; a force that daily sweetly sings sweet nothings into the ears of seafaring locals and visitors - ‘Sail on’; a force that still holds the power to shape a brighter, cleaner, and more sustainable future for these islands’ people: the inexhaustible power of the wind. As the world charts a path towards a greener tomorrow, the BVI stands poised with the potential to embrace the winds of change, harnessing its power to usher in a new era of energy independence, environmental stewardship, economic diversification and exemplar sustainable development.
The Centre for Applied Marine Studies at H. Lavity Stoutt Community College is a statuesque modern facility located on the hem of one of the largest mangrove forests in the British Virgin Islands. The building was battered by Irma, and truth be told,
still bears some of the scars to prove it. The mangrove is thick with life, the silvered trunks of the trees that were stripped bare by the storm have slowly been greened with leaf, livened by bird song, and nursed by the dedicated staff of the College’s ambitious mangrove nursery project. That project, and this forest, are metaphors for the resilience of the islands in face of adversity both environmental and political, but more so they are representative of what can happen if we, for once, embrace the incredible power and potential for economic development which comes with possessing a world-class education product.
BVI, it is time to S.H.I.F.T. G.E.A.R.S.!: Exploring the potential economic substance wave
The BVI must S.H.I.F.T. G.E.A.R.S. to capitalise on economic substance as a potential new revenue stream. This shift requires diversifying the economy to complement its proven success in company incorporation with value-added opportunities. When companies deliberate over relocating their businesses to the BVI, they consider several factors beyond merely economic substance requirements. If the BVI does not address these elements effectively, it could miss this window of opportunity.
Super Yachting and the BVI: Rebuilding a perfect combination
With a super yacht typically chartering only four times a year during the Caribbean season, for a total regional period of around 42 days (representing only 27% of the total potential 152-day winter seasonal availability), each vessel represents significant local revenuegenerating potential, with the BVI’s goal being two-fold – increasing the number of visiting yachts and increasing the length of stay. Building a clear, refined, and long-standing relationship with the super yacht community, the BVI can extend its seasonal attractiveness and create a unique destination selling point that resonates across the very competitive global tourism landscape. BB
Envisioning
The need to develop fit for purpose infrastructure has become a national obsession of the modern day BVI. So much so that it can be argued that it is now a defining element in our national DNA. This obsession is driven in large measure by an instinctive understanding that robust infrastructure is the bedrock, the linchpin that fosters and drives sustainable economic growth. Our preoccupation with infrastructure can be traced as far back as to the 1949 March, which at its basic level, was given legs by the absence of adequate infrastructurein that case healthcare. And it continues to dominate life in the territory as we witnessed in last year’s general election, where without doubt, infrastructure was again the dominant issue of the campaign, much as it was in 1999 with the need for modern healthcare facilities or in 1967 when the late H.L. Stoutt assumed office as the territory’s first Chief Minister.
This obsession has in many ways been fuelled by the fact that as a territory we have always struggled with modern and sustainable national infrastructure. A legacy of sound infrastructure was not one bequeathed to us thus far by the British, since they took possession of these islands some 350+ years ago. As we go to press, the debate again rages with the return to the never ending discussion about the extension of the territory’s primary international gateway - the T.B. Lettsome International Airport. At a lower level perpetual boil, it also continues with the national sewerage system, the water distribution system, the roads network, the West End ferry terminal and yes - the now ever present and recent addition to the listinternet/telecommunications services.
In the spring of last year, as we at Business BVI turned our attention to thinking about our big picture - issue defining ideas for the magazine in 2024, we settled on the concept of ‘Big Ideas’ that we believe are critical to the continued development of the territory, from a longterm economic and business perspective. Ideas which are national in scope and with the clear potential to strengthen the BVI global competitive position over the next several decades. Ideas with the potential to corral and drive the national imagination towards what is possible, when we are all rowing in the same direction.
One such ‘Big Idea’ that we decided must be on our list, is that of developing a new ‘Smart City’ concept for the territory. A
territory that is growing and one with clear national aspirations. A territory determined to remain competitive in our current economic space - tourism and financial services - while doubling down on new areas of potential, new buckets of opportunity in the emerging Blue, Green Orange Economy.
The main goal of a Smart City is to optimise city functions and promote economic growth focused on improving the quality of life for citizens by using smart technologies and data analysis. The value lies in how this technology is used rather than simply how much technology is available. Key features that drive a smart city concept are: infrastructure based around technology, environmental initiatives, quality of life metrics, effective and highly functional public transportation, confident and progressive city plans and people living and working within the city. The ultimate success of a Smart City relies on a close union of purpose between the public and private sectors, as much of the work to create and maintain a datadriven environment falls outside the local government remit.
The concept of Smart Cities is not new, as several countries are already well on their way with plans. Here is a selection: BiodiverCity is a planned sustainable city made of three artificial islands, built off the shore of Penang Island in Malaysia. A place where people and nature co-exist BiodiverCity and its lily pad-shaped islands will be home to between 15,000 and 18,000 residents. Structures will be built using natural materials such as timber, bamboo and concrete created from recycled materials.
More ambitious is the $500 billion Neom project in Saudi Arabia, set to be home to a record-setting 170-kilometre-long skyscraper called The Line. It will be the world’s largest structure, comprising two buildings up to 490 metres tall, running parallel to each other. The structures will be connected by walkways and a high-speed transport system, which will connect one end of the city to the other in 20 minutes.
Another is one of the first floating cities in the world, is being built in the Maldives in response to rising sea levels. With climate change a threat to many cities around the world, 80 per cent of the Maldives is expected to be uninhabitable by 2050. Maldives Floating City is currently being designed to house 20,000 people as soon as 2024. The development will be climate resistant and will work with rising sea
levels. The eco-friendly project will include 5,000 low-rise floating homes built on hexagonal structures that will rise with the sea.
Chengdu Future City China, is challenging conventions of urban planning by proposing a master plan not based on traditional, carorientated road networks. Its six distinct zones will be connected through a smart mobility network using automated vehicles. The zones will also be pedestrian-friendly and within a 10-minute walk of each other.
The 4.6-square-kilometre site will also have an international education park where buildings, including a university, will have landscaped terraces, designed to be an extension of the natural landscape.
Akon City is a planned 809-hectare futuristic city that will be located along the Atlantic coast, 100 kilometres south of Dakar, Senegal. Conceived and launched by singer and entrepreneur Akon, the smart city will be eco-friendly and powered by renewable energy. Described by Akon as a “real-life Wakanda”, a reference to the film Black Panther that inspired him. Akon City is set to have large skyscrapers, shopping malls, parks, universities, a stadium and a technology hub. Akon City’s goal is to stimulate the local economy and create jobs, while using the latest technologies of blockchain and cryptocurrency.
Once we made the decision to anchor our ‘Big Ideas’ with a Smart City concept for the BVI, we immediately broached our crazy idea with Marvin Flax, Managing Director of OBMI-BVI, for his thoughts and pearls of wisdom. Marvin is no stranger to Business BVI. He has been our go to industry partner and a serial contributor to the magazine on all things construction and planning, with his feature article‘Construction in the BVI: Sector Update and Outlook’. Marvin and team OBMI proved to be the right partner to advance such a concept given their deep knowledge of the BVI. OBMI is a global architecture firm widely celebrated for creating distinctive designs for high-end hotels, luxury private residences, and engaging urban areas. Through several global design studios, OBMI offers an integrated approach that combines responsive design strategies, the latest innovations, and technical expertise to create experientially memorable, environmentally responsible, and financially successful destinations.
A visionary concept of what a new, modern and sustainable BVI Smart City in 2040 can be, as envisaged by Architects Marvin E. Flax Jr. and Sian Seys-Evans of OBMI, is intended as an idea, and just that. It is intended to spark the national imagination for a directional design path that our new urban centres should take, incorporating key sustainable features and design characteristics. The concept, by its very nature looks towards the future and is an ambitious idea. One that imagines a Smart City across 70 acres of reclaimed land that follows the natural flow and contours of the island, rather than intruding on it. It sits on the waterfront between Prospect Reef and Duff’s Bottom, facing the expanse of the Sir Francis Drakes Channel, garland with the sister islands - from the Round Rock to Norman Island and St. John in the US Virgin Islands, in the West. The view is breathtaking on any given day, with or without the maritime activity that dominates the Channel at any given hour.
The goal is not just to create a modern urban centre, but to cultivate a space that truly celebrates the BVI, its heritage, fosters inclusivity, leverages the territory’s strengths, embraces sustainable practices and looks towards the future. One of our guiding principles and the architects’ many goals, was to challenge the senses by designing and allocating spaces dedicated to the current primary economic pillars and those to potentially come in the Blue, Green and Orange Economy, by surrounding them with essential and wellness friendly city services and features.
We again stress, that this is a concept and one that is deliberately intended to generate a national discussion about what our future urban spaces should engender to be, with sustainability and BVI heritage as the dominant DNA. We see tons of opportunity for engaging the wider community in shaping and finetuning the concept. From input via a national competition on naming of the city to the incorporation and showcasing of indigenous flora, the naming of streets, walks, promenades, buildings and open spaces after the people of these islandsto ensure that the city is managed by a fit for purpose management structure that enables its viability and longterm success. Below we attempted to explore a number of these critical areas.
1. Urban Planning and Green Spaces:
The envisioned Smart City prioritises public welfare, featuring gardens dominated with indigenous floraincluding a nursery for the same, seating and relaxation areas, and plazas catering to all socioeconomic backgrounds. The City is designed to promote eco-friendly practices by encouraging residents to park their cars in designated areas beneath residential zones upon arrival, transitioning into a carfree pedestrian city. Residents and visitors can leisurely explore shaded promenades, cross bridges, and traverse the ever present pedestrian zones, or opt for convenient public personal rapid transit pods to swiftly reach their destinations. With car-free pedestrian zones, shaded promenades, and public transport options, the city aims to encourage residents and visitors to embrace sustainable modes of transportation, including access to charge their electric vehicles whilst they explore the city.
2. Cultural Development: At the heart of the Smart City is a commitment to cultural
growth and expression, best showcased by the centrality of an amphitheatre right on the water overlooking the Drakes Channel, for performances and community events. New cultural spaces will energise creative endeavours, supporting local artists and contributing to the cultural economy via pop-up markets and mobile art installations and exhibitions.
3. Collaborative Education and Finance:
The City’s design fosters collaboration between education and finance, byfor example the envisioned ‘Robert Mathavious‘ Education and Finance zone. This area serves as a nexus connecting the BVI’s world renowned financial sector with educational institutions. The aim is to nurture the next generation of leaders and foster symbiotic relationships as well as paying homage to one of the nation builders in the financial services.
4. Sporting Facilities: The new city will promote healthy lifestyles. It includes sporting facilities, including a 5-lane competition pool, youth water sports centre, and a climbing wall.
These amenities aim to nurture the next generation of athletes and provide recreational spaces for residents and visitors. As the territory aims to increase its event tourism offerings, these facilities would be able to host international meets and tournaments. These facilities will also provide significant naming opportunities to recognise the territory’s sporting giants in all areas.
5. Marine Sector Expansion: Building upon the strength of the dominant BVI marine sector, the smart city boasts a 200slip marina, a yacht club, support buildings and back of house facilities, including an eco-fuel dock.
6. Inclusive Community Spaces: The city is designed to be inclusive, with spaces for multi-faith worship nestled among indigenous gardens, showcasing key BVI’s native species. A garden café overlooking the ocean provides another serene environment for relaxation and refreshment.
7. Historical Documentation: A
large museum space is dedicated to documenting BVI’s rich history, covering archaeology, art, historic houses, living history, maritime achievements, and natural heritage.
8. Child-Friendly Zones: Children will not be forgotten in this masterplan. It includes dedicated zones with playgrounds, splash pads, and a community pool offer safe and enjoyable spaces for kids, complemented by shaded boardwalks and pedestrian areas for tricycling and bicycling.
9. Wellness and Hospitality: Promoting wellness will be a key element of the city’s DNA with key features including indoor and outdoor gyms, rock climbing facilities, and juice bars. A seafront hotel and visitor centre will reflect that central role that tourism plays in our daily lives ensuring a warm welcome for all users of the city.
10. Sustainable Residential Units: A range of residential units, some with private docks for small boats, will enjoy stunning views over the city to the water.
KEY TO MASTER PLAN
1. Amphitheater
2. BVI History Museum
3. Hotel
4. Marina
5. Yacht Club/Youth Sailing & Watersports
6. Water Taxi Station
7. Sports Facilities, 5 Lane Pool, Indoor And Outdoor Gym And Facilities
8. ‘Robert Mathavious’ Education Zone
9. Financial Services Zone
10. Sports Facilities, Basketball/Football/Tennis
11. Multifaith Space
12. Native VI Gardens
13. High End Residential And Social Housing
14. Electric Public Transport
15. Pedestrian Zones
16. Yoga Deck
17. Landscaped Promenade Walking / Bike / Running Paths.
18. Waterways With Power Generation
19. VI Gardens Café
20. Kids Zone, Playground And Splash Pad
21. Mixed Use, Commercial/Retail/
22. Residential Docking
23. Marina Services / Eco-fuel Docks
24 And Resident’s Electric Car Parking And Charging Stations @ Lower Level
25. Marina Mixed Use
26 Garden Bridge With Cultural Exhibition Spaces
27. Outdoor Plaza For Events/Lectures
28. Visitors Center
29. Outdoor Cinema
This will be designed to seamlessly integrate and promote diversity, ensuring that the residential options of the Smart City are reflective the diversity of the community.
11. Local Heroes Naming Opportunities: All buildings, parks, green areas, streets, foot and cycling paths, promenades and recreational facilities will be named after local heroes from all walks of the territory’s rich history and life. This is intended to cement and promote the territory’s history and culture and foster a deeper sense of community and identity, thus fostering pride and connection among all residents.
12. Eco-friendly practices: The Smart City embraces eco-friendly practices across its infrastructure, promoting a circular economy. Key concepts include many green spaces, efficient waste management systems, and renewable energy sources. It also promotes sustainable transportation, with its pedestrian-friendly zones, bike lanes, and electric public transport. These
features will reduce the city’s fossil fuel demands by incorporating energyefficient buildings, green roofs, and smart technologies. Water conservation measures, such as rainwater harvesting and efficient irrigation, will contribute to a resilient and resource-conscious urban environment. Lastly, fostering community engagement and education initiatives on sustainable living practices ensures that residents play an active role in maintaining a harmonious and environmentally responsible city.
13. Technology Centre: Technology will be a defining feature of the Smart City. The governing philosophy of the City will be one that includes having a dedicated technology centre where the application of AI, blockchain and other emerging technologies and their application to the BVI future economy will be under constant review. This centre will be a partnership with the H.L.Stoutt Community College.
14. Management of the City: Management of the city will be a top priority. The Smart City must explore being an “Incorporated City.” This progressive approach to governance is meant to achieve autonomy and local control to own and manage its assets, operate independently from the Central Government. The management of the city is intended to be fit for purpose, well organised, structured and ultimately with the requisite self-governance to ensure its viability and longterm success. There are many successful examples of incorporated cities all over the United States, Bermuda and other Island States regionally and extra regionally. They are usually small, with populations under 5,000.
As of 2018, there are 19,495 incorporated cities, towns and villages in the United States. 14,768 of these have populations below 5,000. Only ten have populations above 1 million and none are above 10 million. 310 cities are considered at least medium cities with populations of 100,000 or more. Source: World Population Review
In summary, this British Virgin Islands 2040 Smart City concept by OBMI is a testament to aspirational and thoughtful urban planning, cultural enrichment, sustainability, and inclusivity. It envisions a future where the city not only grows, but also thrives as a vibrant and cohesive community. BB
Aruba, The Bahamas, Barbados, Bermuda, Cayman Islands, Curaçao, Dominican Republic, Jamaica, Montserrat, St. Vincent & the Grenadines, Trinidad and Tobago and Turks and Caicos.
Like the British Virgin Islands (BVI), these Caribbean countries boast some of the most beautiful and tranquil waters on their shores; however, a stark difference between the BVI and its Caribbean neighbours is that they all have a sovereign credit rating from major credit agencies, but the BVI does not, despite the important role it plays in global finance.
This absence raises the question: Why should the BVI care about obtaining such a rating?
A sovereign credit rating serves as an analytical tool to evaluate a territory’s ability to meet its debt obligations. Developed by credit rating agencies such as Moody’s, Standard & Poor’s (S&P), and Fitch, these ratings are essential for gauging a territory’s fiscal health. But beyond the numbers, they offer a plethora of benefits that are particularly significant for the BVI.
Enhanced Access to Global Capital Markets: Given that the BVI is a significant player in offshore financial services, being able to tap into global capital markets is vital. A strong credit rating enables easier access to loans and other financial products.
Lower Cost of Capital: Good credit ratings often correlate with lower interest rates. This could lead to considerable savings for the BVI, which may need to access debt markets to fund long-planned infrastructure initiatives.
Attractiveness for Foreign Investment: Ratings act as lighthouses in the global investment landscape. A high rating would make the BVI an attractive destination for Foreign Direct Investment, further diversifying its economic base. Another major aspect to consider is that with a favourable credit rating, there will be access to funding in international bond markets, which is an important consideration for the jurisdiction. The bonds can be issued for
a specific purpose, and in the case of the BVI, this could be an infrastructure bond to attract financing for infrastructural projects such as the airports, the roads, and the ferry terminal.
Strengthened International Reputation: Credit ratings often serve as public relations tools conveying a certain level of discipline and commitment toward transparency within governmental organisations, boosting a nation’s reputation among peers and international organisations such as the OECD and the EU.
Policy Leeway: A strong credit rating allows the government to employ a broader range of fiscal policies, particularly useful in economic downturns.
Enhanced Trade Relationships: Better ratings can influence trade negotiations, giving the BVI an edge in establishing trade agreements.
Positive Impact on Local Businesses: A good rating would cascade to domestic companies, potentially reducing their borrowing costs.
Obtaining a sovereign credit rating is a nuanced and intricate endeavour that demands an exhaustive analysis of both quantitative and qualitative factors. Agencies such as Moody’s, S&P, and Fitch employ a multifaceted approach, employing an extensive range of metrics to deliver a comprehensive evaluation.
On the quantitative side, macroeconomic indicators play a pivotal role. Factors like Gross Domestic Product, inflation rates, unemployment figures, and foreign exchange reserves offer valuable insights into a territory’s economic stability and robustness. These indicators serve as the backbone of the rating process, providing an objective foundation for the analysis.
Simultaneously, the qualitative aspects are just as crucial for a holistic assessment. These include governance considerations like the prevalence or absence of corruption, the effectiveness of regulatory frameworks, and the quality of political institutions. Beyond governance, other qualitative variables like social stability, geopolitical risks, and environmental considerations can also weigh heavily in the overall rating.
Credit rating agencies synthesise these diverse elements into a composite
evaluation that provides an insightful, albeit complex, portrait of a country’s fiscal health and creditworthiness. Each agency employs its own unique methodology, thus bringing subtle variations in how these elements are weighted and interpreted. However, while the methodologies among Moody’s, S&P, and Fitch may differ in nuances, they all fundamentally assess similar economic and governance metrics. As such, the agency chosen for the rating process is unlikely to affect the final credit rating of a territory materially.
Securing a sovereign credit rating is anything but a trivial undertaking; it is a multifaceted journey that spans several intricate steps. The process commences with initial consultations and progresses to formal engagement letters, laying the groundwork for rigorous analytical phases. At each phase, stakeholders must actively liaise with agency analysts, meticulously compile relevant data, undergo extensive reviews, and eventually usher the rating into public disclosure. Given the meticulous nature of this evaluative process, the typical timeframe often extends over the course of several months.
The BVI already punches above its weight in the realm of international finance, and its role as a global financial centre is already well-established. Yet, the absence of a sovereign credit rating stands out as an untapped opportunity for amplifying its influence and economic prospects.
By obtaining a sovereign credit rating, the BVI could unlock doors that lead to a host of benefits, from easier access to global capital markets to reduced costs of borrowing and a bolstered international reputation. In a world where size isn’t everything, the BVI stands to gain enormously by filling this conspicuous gap in its financial profile.
The question raised at the beginning of this article asked why the BVI should care about obtaining a credit rating, and the benefits were broadly identified, detailing the immense opportunities available for the territory. So now we must ask ourselves one final question: How quickly can we get a sovereign credit rating? BB
Catalysts of change: a bright future for Renewable energy in the BVI
by Henry CrequeAs the legendary Captain Jack Sparrow, known to young and old from the epic tales of Pirates of the Caribbean, would aptly put it, “Now...bring me that horizon!”
In the tranquil embrace of the Caribbean Sea, the Virgin Islands stand as a paradise of majestic islands, azure waters, and boundless natural beauty. Yet, beneath this idyllic exterior lies a hidden force: a force that, figuratively and literally, transported us from whence we came to where we are today; a force that daily sweetly sings sweet nothings into the ears of seafaring locals and visitors‘Sail on’; a force that still holds the power to shape a brighter, cleaner, and more sustainable future for these islands’ people: the inexhaustible power of the wind. As the world charts a path towards a greener tomorrow, the BVI stands poised to embrace the winds of change, harnessing its power to usher in a new era of energy independence, environmental stewardship, economic diversification and exemplar sustainable development.
A vivid and clearly defined image of our current energy landscape locally is readily available. We supply 99% of our electrical power from just over one million gallons of diesel fuel monthly. We also know that land-based transportation, sea-based transportation, cooking and heating are solely fuelled by petroleum products –gasoline, diesel and propane.
The questions are: Where do we need to be? And Why, When and How do we get there?
WHERE? Our destination is Net-zero, specifically, Net-zero emissions of Carbon Dioxide (CO2). By Net-zero we mean that the amount of Carbon Dioxide we produce and release into the air must be equal to or less than the amount of CO2 we 11remove.
WHY? The reasons to transition to a renewable energy future are also abundantly clear.
• Environmental stewardship: The ravages of Uber-Hurricanes Irma, Maria and Dorian permanently etch into our minds and psyches what can be expected, with increasing regularity, as long as our ocean temperature rises continue their current trend.
• Economic Opportunities: Many of our business persons, government officials, workers and students, present
and future, can clearly envision the opportunities and job creation that will accompany the transformation of the BVI’s energy sector.
• National Security – Addressing oil price fluctuations and mitigating the adverse effects of climate change is not just an environmental concern, but a matter of national security for the British Virgin Islands. The volatility of oil prices eats away at the VI’s socioeconomic fabric, escalating the costs that affect all our everyday expenses from electricity to groceries to shipping to gasoline, eroding the foundations of welfare and financial security for many of the Territory’s residents. And most importantly, we are now acutely aware of the vulnerability of our critical infrastructure, communities and ecosystems to the threats of more powerful storms and sea-level rise.
• It also deepens and advances our global tourism branding of Nature’s Little Secrets at an opportune time as the world goes green.
What is less clear, however, is when and how we will get there.
WHEN? COP 26 (The 26th Conference of the Parties of the United Nations Framework Convention on Climate Change) and many other experts in the field say we need to be there by 2050 at the latest.
However, based on our size and geopolitical and economic factors, we can get there long before and be a shining and practical model for many other countries. A few countries have massive rivers that power hydroelectric plants or volcanic activity not too deep below the earth’s surface that powers geothermal power stations. The countries that possess and can harness those resources in greater abundance than their energy requirements are already producing 100% of their country’s electrical power needs from renewable sources, such as Paraguay, Iceland, the Democratic Republic of Congo & Albania. This is because geothermal and hydroelectric power sources are well suited for base-load power generation. Base-load generation is essentially a steady and reliable source of electricity that operates 24/7 to meet the
energy needs of a region.
What we have at our disposal in abundance is wind and sun. We also have the ocean, but the world’s engineers are yet to discover a method to harness, in bulk, the energy of our oceans. Most countries around the world are in similar positions. The primary renewable energy sources at their disposal are wind and solar, commonly referred to as intermittent energy sources. Intermittent power generation relates to sources that are not continuously available. Their production can vary over time depending on external factors like the weather.
Incorporating intermittent sources at high percentages of total power generation requires a more involved approach. It requires the systems’ engineers to assemble many puzzle pieces over an extended period strategically.
The BVI is well positioned to be an early mover in this space based on factors such as:
• The types of generators currently in use in the Territory
• The high cost of electricity locally makes renewables very financially competitive. Strengthening the premise that renewables are often now less expensive than fossil-fueled power, IRENA - the International Renewable Energy Agency recently announced that around 86 per cent (187 gigawatts) of all the newly commissioned renewable capacity in 2022 had lower costs than fossil fuelfired electricity. The article also stated, “Renewable Power Generation Costs in 2022, published by the International Renewable Energy Agency (IRENA) today, shows that the renewable power added in 2022 reduced the fuel bill of the electricity sector worldwide. New capacity added since 2000 reduced the electricity sector fuel bill in 2022 by at least USD 520 billion.”
• The political will present in the residents and leaders of the Territory to transition to sustainable energy sources
• The BVI’s relatively solid financial reputation - a critical factor in the calculus of large investors.
HOW? Transforming the BVI to a renewable energy future involves
methodically transitioning our energy generation mix and piecing together several other integral pieces of the puzzle to create a new grid and eco-system that works for us.
Pieces of the Puzzle include the right mix of:
• Solar Power
• Wind Power
• Energy Storage
• Waste to Energy
• New novel and emerging technologies
• Financing
• Energy Efficiency
• Electric Vehicles
• Behavioral Changes
• Heating and Cooking
• Public Education
• Workforce Development
• Data Science
• Artificial Intelligence (AI)
• Grid interconnections
There is work to be done in each of these areas.
There is opportunity to innovate and lead in each of these areas.
There are careers to be unlocked for our youth and cultivated in each of these areas.
This is intended to be a series of articles. In this edition, we talk about Wind.
• The wind has always been an integral part of the Virgin Islands story and has played an essential role in the history and development of the Territory.
• We have a rich history of building and sailing Virgin Islands sloops through our warm turquoise waters to move our people, agricultural and other goods to neighbouring islands.
• The BVI has aptly earned the title of a sailing capital of the world.
• The wind transported our enslaved ancestors from the shores of Africa to the plantations of the West Indies.
• The wind whisked Christopher Columbus and his crews on the Nina, Pinta and Santa Maria to our shores, introducing Europeans to the Virgin
Islands.
• Pirates and Privateers sailed our channels and fought to plunder and protect property on the islands. The winds of Hurricanes Irma & Maria hit the reset button and taught us lessons of a lifetime.
And wind will likely play a significant role in the BVI’s future energy landscape.
The International Energy Agency’s Net Zero 2050 Roadmap for the Global Energy Sector reports that approximately 30% of the World’s generated energy comes from renewable sources, with about 10% of that coming from Wind Power. That number is expected to increase to about 38% by 2050.
Each renewable energy source has specific attributes, that give it advantages and disadvantages. One advantage of wind over solar, for example, is that wind turbines take up less physical space, plus abundant precedence exists for wind turbines installed offshore. This is especially advantageous here as over 90% of the BVI is sea.
Another advantage is that the wind tends to blow 24 hours a day, whereas the sun shines for a maximum of 12 hours per day on average, and peak energy from the sun is only available for about six hours per day.
Also, although the cost to install wind power is higher than that of solar, and that disparity is forecasted to widen in the future with steadily decreasing costs of solar, the Levelized Cost of Electricity (a measure of the overall lifetime costs) from Wind is lower because wind turbines produce power more hours per day than solar panels.
Wind Power Generation can also be divided into Onshore Wind and Offshore Wind.
Significant potential exists for onshore wind, which may be handily installed and incorporated on many of the eleven islands already interconnected to BVI’s primary grid. For example, Tortola, Virgin Gorda, Jost Van Dyke, Great and Little Camanoe and Scrub Island. Transforming these islands into net-zero systems may be achieved without many complications, as their energy requirements are small compared to the grid to which they are connected.
Tremendous potential also exists for
off-shore wind power, with greater grid interconnections, both within the BVI and between the BVI and our neighbours in the USVI and Puerto Rico.
Offshore wind projects have been less prevalent in the US. However, large offshore wind projects are much more common in European countries with strong maritime traditions and more centralised governments, similar to the BVI. The UK is a leader in offshore wind with many of the largest projects in the world installed, like the Hornsea, Moray East, Triton Knoll, East Anglia and London Array offshore wind projects.
The BVI has a relatively small grid, so to unlock larger off-shore wind projects, grid interconnection between the BVI, USVI and Puerto Rico is required. If the BVI is an early mover, it would create the possibility of selling renewable energy to our close neighbours.
Job Creation. The construction, operation and maintenance of offshore windfarms will create a new sector of jobs and careers within the Virgin Islands. Some job skills will overlap with existing professions in the Territory, such as structural engineers, project managers, boat captains, environmental scientists, electrical engineers, construction supervisors, project managers, operators, operations managers, health and safety officers, procurement specialists and financial analysts. Many jobs will create entirely new opportunities in the Territory’s job market, like wind turbine maintenance technicians, naval architects, innovation managers, data analysts, meteorology, AI and remote sensing specialists. The industry will create large numbers of blue-collar and whitecollar jobs, which may be based outside the city of Road Town and possibly on other islands such as Jost Van Dyke, Anegada or Virgin Gorda. Therefore, the job market and economy can grow significantly without creating additional congestion in the Road Town area.
Financial Benefits. The potential financial benefits of a large offshore wind farm based in the BVI, supplying renewable electrical power to our closest neighbours in the USVI and Puerto Rico, will be tremendous and transformative to the BVI’s economy. Should Puerto Rico and the USVI choose to purchase just 20% of their annual energy from a BVI wind farm, at an average rate of ten cents per unit, that would equate
to about $315 million injected annually into the BVI economy from energy sales alone. Of course, there will be other addon economic effects from the wind farm operation. The total contribution to BVI’s GDP would place this initiative easily on par with BVI’s current two financial pillars of Financial Services and Tourism. How is that for a 3rd economic pillar?
Some may consider a submarine cable interconnecting the BVI as far as Puerto Rico a far-fetched idea. However, it is interesting to note that the interconnecting cable for the first phase of the Hornsea project in the UK is about 75 miles, and the distance from the BVI to Puerto Rico is only about 60.
Technical Benefits. Interconnecting BVI, USVI and Puerto Rico’s grids would result in BVI having access to power generating capacity multiple times our grid alone. In addition to allowing more significant levels of renewable energy production, additional capacity would allow greater flexibility for BVI to maintain its power-generating equipment by importing power from our neighbours.
Fisheries. Frequently, higher levels of fisheries thrive in areas with environmentally sustainable underwater infrastructure, such as the turbine foundations, as they create artificial reefs. Artificial reefs may attract marine life and serve as habitats for fish and other aquatic species. Depending on how authorities manage the wind farm, the area may become a good fishing ground for local fishermen or a de facto marine protected area, helping conserve certain fish and marine life stocks.
Environmental Benefits. In addition to removing millions of tons of Carbon Dioxide produced by generating the equivalent energy from fossil fuels, wind turbines eliminate the possibility of fuel and oil leaks, inherent in power plant operations.
Arguments against wind power generation vary and can stem from concerns about its impact on the environment, local communities, and energy systems. Below are some common opinions often raised against wind power:
• Aesthetic and Visual Impact: Some people argue that wind turbines can alter the visual aesthetics of natural landscapes and generate a certain level
of sound. Alternatively, many people appreciate the picturesque sight of majestic wind turbines with their blades gracefully slicing through the air, translating the power of the wind into clean, renewable energy. Siting wind turbines sufficiently distant offshore and out of sight also significantly reduces visual and audible impact. Here the BVI has a considerable advantage as an archipelago.
• NIMBY (Not In My Backyard): Local opposition can arise due to concerns about the visual impact, noise, and potential effects on tourism. Others will envision the BVI as a Beacon of Hope. As the Virgin Islands embraces wind power and other renewable energy sources, it becomes a shining example, showcasing the boundless potential of sustainable development in island nations. With every turbine that turns, we demonstrate our resilience and determination to create a legacy of environmental responsibility. This commitment resonates within our shores and worldwide, inspiring others to follow suit and create a cleaner, greener planet.
• Bird Mortality: Wind turbines can threaten birds, especially in areas with high bird migration or nesting activity. However, techniques such as painting stripes on wind turbine blades are often deployed to reduce the likelihood of bird strikes.
• Grid Stability: Wind power generation, like solar, is intermittent, depending on wind conditions. BVI is already at an advantage here. BVIEC’s reciprocating internal combustion engines are adept at handling intermittency at lower penetration levels. However, at higher levels of integration, storage sources such as batteries are required to help address intermittency.
• Manufacturing Energy: Critics suggest that the energy used in manufacturing, transporting, and installing wind turbines can offset some of the benefits gained from their operation. However, the long-term benefits of using wind energy, in terms of greenhouse gas reductions and reduced air pollution, far outweigh the initial environmental impact of manufacturing.
The winds that have long caressed the BVI’s shores are no longer just a part of the backdrop; they are now the catalysts of change. Wind power, once an elusive dream, promises to reshape the energy landscape of the BVI. Through this
transformation, we will demonstrate our commitment to sustainable progress, taking bold steps to reduce our carbon footprint and contribute to the global fight against climate change.
Beyond its environmental benefits, wind power promises energy security and economic empowerment. By reducing dependence on imported fossil fuels, the BVI can unlock new avenues for sustainable development. As we harness the limitless energy of the wind, we are also sending a powerful message to the world – that even the smallest of territories can be leaders in the clean energy revolution.
The journey towards a renewable future requires technology and the collective efforts of visionary minds. The BVI boasts a community of dedicated individuals, scientists, engineers, administrators, and entrepreneurs committed to accelerating renewable energy initiatives. These local champions are the driving force behind innovative solutions, paving the way for a sustainable energy landscape that will benefit future generations.
With our location and favourable wind patterns, the BVI possesses a remarkable advantage in leveraging wind power. We will harness the same winds that have enchanted visitors for generations to produce electricity, light up homes and drive economic growth.
In the Virgin Islands, the winds of change are no longer whispers; they are a resounding call to action. The potential of wind power to transform the energy landscape and drive sustainable progress is undeniable. As the BVI steps onto the global stage of renewable energy, it promises a cleaner, brighter, and more prosperous future. With wind power as one of our guiding stars, the BVI will chart a course towards a world where nature and progress coexist harmoniously, leaving a legacy of hope for generations yet to come.
Taking a cue from the wisdom of John Shedd, who reminds us that ships are not meant to idle safely in harbours, we find ourselves in the same boat, so to speak.
To forge the energy future the residents of the BVI crave, we must summon our adventurous spirit and chart the course together. As the legendary Captain Jack Sparrow, known to young and old from the epic tales of Pirates of the Caribbean, would aptly put it, “Now...bring me that horizon!”
With a vision as vast as the open sea, we’re ready to sail towards a brighter, more promising and more sustainable tomorrow. BB
Realising the full potential of HLSCC: Why we need to be radical about higher educationby Dr. Richard Georges
The Centre for Applied Marine Studies at H. Lavity Stoutt Community College is a statuesque modern facility located on the hem of one of the largest mangrove forests in the British Virgin Islands. The building was battered by Irma, and truth be told, still bears some of the scars to prove it. The mangrove is thick with life, the silvered trunks of the trees that were stripped bare by the storm have slowly been greened with leaf, livened by bird song, and nursed by the dedicated staff of the College’s ambitious mangrove nursery project. That project, and this forest, are metaphors for the resilience of the islands in face of adversity both environmental and political, but more so they are representative of what can happen if we, for once, embrace the incredible power and potential for economic development which comes with possessing a world-class education product.
H. Lavity Stoutt Community College is thirty-three years old this year, and up to this time has primarily delivered associate degrees for transfer and occasional baccalaureates or masters programmes with institutional partners. The College is the culmination of a vision of the former Chief Minister whose name it now bears. The next cycle of the College’s existence will require it to review its desire and ability to offer programmes above the associate’s level in order to better serve residents of these islands as well as attract an international student body. It is useful at this time to quickly survey the political attitudes towards higher education in the jurisdictions that the majority of Virgin Islanders currently transfer to in order to complete their first degree.
In the United States, there has been a concerted focus by the Department of Education to determine the financial value of degrees and the opportunities for gainful employment they actually offer graduates. Part of this conversation has been centred on an understandable concern regarding the rising cost of tertiary education in the United States and debt relief from a predatory student loan system, but it has also translated into a series of actions whereby the Department now requires institutions to collect and report a variety of data on their graduates including debtto-earnings ratio and earnings premium. A similar, but perhaps more draconian, approach is emerging in the United Kingdom. There, the government is actively seeking to cut numbers on what it terms ‘low-value’ programmes. These cuts will eliminate access to higher education for
primarily working-class communities and are being coupled with decreased funding for foundation year courses which create pathways for mature and underprivileged students.
While it is true that employment prospects play a significant role in the selection of a major, the students who report most positively about their college experience tend to also have had a positive experience by developing a strong connection with their lecturers, can clearly connect their studies to their future careers, or have acquired relevant professional skills from their education. These sorts of outcomes tend to be more likely to be achieved at smaller institutions like HLSCC that can offer smaller class sizes and a more personalised student experience. Further, our College outstrips both the average student retention and graduation rates in the United States.
Moving away from the student perspective towards a more macro based view of the merits of higher education institutions for a local economy, we can observe the economic impact of colleges and universities in the United Kingdom and the United States as the data is readily and publicly available. According to Frontier Economics, the higher education sector in the United Kingdom supports more than 815,000 jobs both directly and indirectly and contributes over £130 billion to the national economy. In Florida, the establishment of the new STEM based institution Florida Polytechnic University created just under 2,500 new jobs and generated a total of $97.6 million dollars of income for the economy of the city of Lakeland. In Philadelphia, in the shadow of the University of Pennsylvania, Drexel University boasts a $2.4 billion dollar impact on the economy of the state.
Back at home, the College represents the best opportunity to develop a world-class higher education institution that can contribute significantly to the territory’s economy in both direct and indirect means. The direct impact of a maturing college will be seen as the institution expands its offerings, creating jobs in its operational, instructional, and administrative departments. This increase in faculty and staff and facilities of course means HLSCC will have to increase the business it does in the local economy. The College of the future is a major thread of the fabric of local society, delivering the education required to create civic-minded citizens and a skilled workforce, while continuing to lead the way in cultural development and environmental
conservation.
This requires a vision for the next phase of the institution’s development, the kernel of which is outlined in its current strategic plan. What has emerged in that document is a strategy that charts the college’s course over the next five years which is coupled by a longer-term vision of how the physical infrastructure may evolve over the next three decades. If this vision is fulfilled, the vision of Stoutt could be the basis for higher education to become a truly sustainable pillar of the local economy.
We have identified five centres of academic excellence that the College is well placed to exploit – marine and maritime studies, culinary and hospitality, disaster management, financial services, and teacher education. In addition, we envision a complex of sporting facilities meant to provide venues for regional competition and local athlete development. This includes a 25-metre competition swimming pool, an indoor gymnasium, fitness centre, and archery range to serve students, the community, and even visiting athletes and teams. Underpinning all of these would be the requirement that the College develop student housing to accommodate both short-term and long-term residency as students pursue our professional and credit-bearing offerings.
In the area of marine and maritime studies, we have seen steady growth through targeted recruitment and the diversification of our offerings. The Marine Professional Training programme began in 2019 to create a pathway for Virgin Islanders to employment in the marine industry. It provides them a series of globally recognised credentials followed by an apprenticeship with industry partners. Through COVID and the subsequent recession, we were able still to place over 80% of participants in jobs. That figure is climbed almost 10 points since. Recognising the potential in our offerings for mariners, we are close to the completion of the construction of an expanded fire simulator which will allow us to offer additional STCW courses – the standard safety credential recognised by the International Maritime Organisation and accredited at HLSCC by the United Kingdom’s Marine and Coastguard Agency.
Our culinary and hospitality team, in addition to revitalising the programmes, secured a global academic partnership with the American Hotel and Lodging Institute enabling them to deliver professional certifications throughout the Territory
to staff and managers at boutique hotels and multi-billion-dollar resorts alike. We have found the certificate programmes in professional cooking and baking extremely popular and will soon be outfitting our Virgin Gorda Centre, located at The Village Rose, with a cooking laboratory. However, the future of this sector requires a purposebuilt residential campus located on Virgin Gorda. Once suitable land is identified, we believe that a campus constructed there with the support of the hotels and resorts, a model of sustainability can be based on students paying tuition and boarding.
It was almost ten years ago that the College last delivered programming in disaster management. This was a 3-month online course in collaboration with the Department of Disaster Management and run regionally through the Caribbean Disaster Emergency Management Agency.
As the College moves towards offering fouryear degrees and postgraduate diplomas, we see the Territory as being well-placed for both to be offered in the field of disaster management. With the fire simulator, the waterfront, and an expanse of flat land on the main campus, the potential is good for a variety of simulations and exercises for training or for interagency coordination.
Two years ago, we announced that the Financial Services Institute would be named in honour of Dr. Robert Mathavious. The past year has seen targeted staff recruitment and a subsequent growth in offerings and industry interest. The Robert Mathavious Institute for Financial
Services will shortly be relocating from Paraquita Bay to its own offices closer to the financial services sector. It holds several accreditations already, including ACCA, ICA, CGI and others. As it grows, now we see the embers of a robust catalogue of offerings including professional accounting, anti-money laundering, compliance, governance and risk, banking, FinTech, and executive education.
The discipline of teacher education, with the support of the Ministry of Education, has been given particular attention in the past few years by the College and its Board. The associate degree programme was suspended in 2018, and the department reimagined as the Institute of Education to offer both the associate degree in education as well as provide ongoing professional development to both college faculty and teachers in the local system. Moving forward, the Institute will be charged to develop a postgraduate diploma, a baccalaureate, as well as conduct and facilitate research to benefit teachers in the Territory.
Our ambitions require more resources than are currently publicly available. Since 2020, the College therefore has begun to aggressively raise private donor funding far beyond previous years. In addition, this year it established the HLSCC Foundation, a 501(c)(3) charitable foundation in the United States to allow for tax exempt donations towards programmes and capital projects.
To make that vehicle viable, and to position the College to realise the vision here outlined, it behooves governments to keep the institution paramount to national development desires. There may be some legislative adjustments required, for example to facilitate an easier process for international students to enter the Territory and be domiciled at Paraquita Bay or in private apartments. Also, government ought to demand more of developers and the financial services and tourism sectors for contributions towards infrastructural development directly impacting on education. An incentive programme to encourage this sort of investment seems like an obvious and simple solution.
Over the past three decades, the College has produced locals who now inhabit meaningful positions across the public and private sectors, it possesses one of the best spaces for the performing arts, it boasts a mangrove nursery that has replanted thousands of mangroves lost to deforestation, it is becoming more determinedly engaged in every thread of the community it serves. I walked the halls of this campus more than 25 years ago as a student. It built the foundation upon which rest both my career as a higher education professional and as an award-winning writer. This place literally changed my life and the lives of thousands of others, we cannot afford to neglect the work required to continue to build an institution that can endure into the future we dream of for these islands. BB
by Ayana Glasgow
The British Virgin Islands (BVI) has long been a global beacon for international financial services due to its economic stability, formidable international reputation, and robust financial services legislation, resulting in its leading position as a company incorporation domicile. These attributes have attracted countless multinational corporations and individuals seeking to optimise their business and wealth-planning strategies. However, in response to recent developments in global tax standards, the BVI, like other international financial service centres, introduced economic substance requirements.
In the context of international business, economic substance refers to regulations that mandate businesses to illustrate a significant presence and substantial economic activity within a jurisdiction, to qualify for its tax benefits.
Economic substance thereby serves as a counterstrategy against base erosion and profit shifting (BEPS). BEPS involves multinational companies redirecting their profits to jurisdictions with low or non-existent taxes to hedge tax liabilities in the regions where the profits were originally generated. This redirection exploits the loopholes and inconsistencies in tax regulations. The specific criteria for demonstrating economic substance vary across jurisdictions, but generally in the BVI, comprise:
• Management and direction of the company within the jurisdiction.
• Conducting core income-generating activities within the jurisdiction.
• Adequate physical presence, staff, and expenditure within the jurisdiction.
These requirements apply to BVI registered companies engaged in specified “relevant activities,” including but not limited to banking, insurance, fund management, shipping, intellectual property, and holding business as defined by economic substance legislation.
Given that a few years have passed since the introduction of economic substance requirements, this time lapse may raise concerns about BVI’s ability to harness the transformative potential of economic substance fully. It is thus crucial to consider potential obstacles posed by jurisdictions
already diversifying their economies in this space and the emerging threat of Artificial Intelligence.
As mentioned, the BVI, like other international financial centres, including Bermuda, Guernsey, Isle of Man, Jersey, and the Cayman Islands, have adopted economic substance requirements to align with global standards. On the contrary, some jurisdictions like Barbados leveraged the pandemic to initiate programs attracting remote workers. Beyond these initiatives to diversify economies, countries like BVI now need to also contend with the transformative power of Artificial Intelligence and its potential to disrupt conventional business practices. Let us briefly examine the three specific cases: Cayman Islands’ Special Economic Zone, the Barbados Welcome Stamp program, and Artificial Intelligence.
Cayman Islands Special Economic Zone. The Cayman Islands’ Special Economic Zone (SEZ) is a specially designated area, established to promote and foster economic activity by attracting international businesses. Offering a plethora of benefits, particularly to entities operating within sectors like technology, biotechnology, life sciences, green technology, commodities and derivatives, and maritime and aviation services, the SEZ aims to attract foreign direct investment and stimulate the Cayman Islands’ economic growth and innovation.
Within the SEZ, companies enjoy the advantages of tax exemptions, a swift business licensing process to expedite operational readiness, a fast-track fiveday work residency visa process, and access to Cayman Islands’ robust, stable economy and modern infrastructure. In return, the Cayman Islands government reaps significant benefits, as the SEZ helps drive economic growth and innovation, generate employment opportunities, attract investment, increase fiscal revenue, and enhance the jurisdiction’s international reputation, contributing to the Cayman Islands’ overall prosperity.
The SEZ’s appeal is further enhanced by the easy of travel to the Cayman Islands from major financial centres such as Miami, London, New York, and Toronto. Moreover, the Cayman Islands has been recognised as the least complex jurisdiction
for conducting business among seventyeight countries, reflecting its structured and favourable business environment. This recognition, not only reinforces the Cayman Islands’ commitment to economic diversification, but it also attests to its comprehensive and inviting framework, designed to attract international companies engaged in particular business sectors.
Barbados Welcome Stamp Program. In response to the pandemic, Barbados launched the “Barbados Welcome Stamp,” also known as the digital nomad program. This platform aimed to draw remote workers to the island, by providing a special visa that allowed international visitors to reside and work remotely in Barbados for up to a year.
This initiative emerged as a countermeasure to the repercussions of the COVID pandemic, which catalysed a global shift towards remote working. As with many nations heavily reliant on tourism, Barbados was severely impacted by international travel restrictions and sought to capitalise on this opportunity to attract a new category of visitors.
The program has been hailed a success due to its contributions to the local Barbadian economy through rent, utilities, and leisure activities, among others. It has also facilitated some economic diversification away from traditional tourism. Despite some potential remote workers considering Barbados to be somewhat expensive, organisations like TEN Habitat have offered solutions.
TEN Habitat recently announced its first “co-living facility, expressly designed for entrepreneurs, remote workers, and digital nomads,” currently ready to accept reservations. These developments, coupled with Barbados’ ease of access to and from many countries worldwide, imply that the program continues to grow in importance and appeal.
Artificial Intelligence. Notwithstanding the developments in competitor jurisdictions, it is pertinent to highlight a game-changer in the global business landscape – Artificial Intelligence (AI).
Companies have been revamping their processes, with some reducing their human resources in favour of AI. This shift has diminished the need for substantive commercial premises for their operations. A prime example of this is the use of chatbots and virtual assistants, which companies deploy to enhance their clients’ customer service experience.
However, it is crucial to recognise that AI’s influence on international business is not static, but a continually evolving phenomenon. As technology progresses, businesses will discover increasingly innovative ways to harness AI for growth, efficiency, and enriched global collaborations. Yet, this progress also ushers in new challenges, such as data privacy and ethical considerations, particularly as AI adoption becomes more prevalent in international business scenarios.
Therefore, it is vital to maintain constant vigilance in the AI sector, to ensure any potential impacts are integrated into the government’s decision-making process regarding this substance initiative.
It is well-understood that various jurisdictions have tailored their economies to welcome international business companies onto their shores. The BVI harbours the same potential and, far from accepting that the opportunity has been missed, there are key aspects that the BVI should meticulously examine.
The introduction of economic substance requirements prompted BVI-registered companies to reassess their structures, operations, and location strategies. Beyond avoiding penalties and reputational risks, adhering to these requirements could yield several advantages. These benefits include enhanced transparency, reinforced credibility as legitimate businesses, reduced risk of double taxation, and sustained access to the global financial system. However, specific challenges can deter these companies from establishing a presence in the BVI.
Consequently, the BVI must S.H.I.F.T. G.E.A.R.S. to capitalise on economic substance as a potential new revenue stream. This shift requires diversifying the economy to complement its proven success in company incorporation with value-added opportunities. When companies deliberate over relocating their businesses to the BVI, they consider several factors beyond merely economic substance requirements. If the BVI does not address these elements effectively, it could miss this window of opportunity. These factors include (though not listed in any particular order of importance):
(i) Safety and Security;
(ii) Health;
(iii) Infrastructure;
(iv) Fast Track Process
(v) Tax Incentives
(vi) Government Support
(vii) Economic Benefits
(viii) Access to BVI
(ix) Rental Space Availability
(x) Substance Business Activities
Safety and Security. For businesses contemplating relocation to the BVI, optimum physical security, employee safety, and data protection are crucial. It is imperative to ensure the physical safety of potential premises, employees, and visitors by preventing unauthorised access. However, more crucial is the need for assurance that the moderate crime rate within the BVI is managed by the local authorities to maintain our historic low crime rate. Failure to enhance safety and security may impact the attractiveness of the BVI as a potential hub in the future. Therefore, establishing a safe and secure environment should be a priority to foster the jurisdiction’s appeal to prospective businesses.
Health. The COVID pandemic has underscored the importance of health in relation to businesses, as companies have had to navigate new health and safety guidelines, while addressing the pandemic’s impacts on their employees and operations. Therefore, any business considering relocation to the BVI should be assured that the local health system is equipped to meet their needs. As such, addressing any deficiencies within the healthcare system must be considered a top priority. Ensuring a robust health infrastructure not only benefits the community, but also makes the BVI a more attractive destination for businesses.
Infrastructure. Sound infrastructure bolsters economic growth and competitiveness by enhancing business efficiency and productivity. Conversely, an inadequate infrastructure can pose a substantial obstacle to conducting business. For instance, suboptimal road conditions or inefficient ports may delay the delivery of goods, potentially drive-up costs, and compromise business competitiveness. In the BVI, it is imperative to prioritise effective telecommunications, reliable electricity sources, consistent water supply, and improve road conditions.
Investing in infrastructure is a critical governmental responsibility that directly
supports economic development. Contemporaneously, private investment can significantly contribute as well, and the BVI should consider exploring public-private partnerships to upgrade this fundamental infrastructure, where possible. Through such collaborative efforts, the BVI can create an environment more conducive to business operations and economic growth.
Fast Track Process. Any fast-track process must delicately balance speed and efficiency without sacrificing the quality and thoroughness of the process. To operate from the BVI, foreign-owned BVI-registered businesses require work permits for non-Belonger staff members and a trade licence to conduct activities. As such, these businesses would greatly benefit from a centralised hub where relevant work permits and trade licences can be expediently issued, thereby enhancing efficiency.
The BVI could consider creating such a hub. With the Ministry of Financial Services, Labour, and Trade overseeing these crucial areas, the government would be ideally structured to implement an approach that attracts businesses. As part of these considerations, the introduction of tiered or new work permit classes and/ or trade licences should be contemplated, potentially offering further incentives for businesses considering BVI as their operational base.
Tax Incentives. Currently, while the BVI does not levy a corporation tax, there are other available tax incentives that could benefit foreign-owned BVI-registered entities intending to operate from the BVI. To better facilitate such initiatives, the BVI government could consider establishing a special economic zone or implementing other special economic treatment measures. These strategies could prove particularly beneficial, especially if the government faces challenges with such businesses operating from a centralised location. This way, the BVI can continue to enhance its attractiveness as an investment destination. Notwithstanding offering such incentives, the government can still benefit from increased revenues through other sources, such as payroll tax.
Government Support. The timely establishment of the Ministry of Financial Services, Labour, and Trade (the “Ministry”) within the BVI Government is highly beneficial. Addressing many of the aforementioned challenges requires political commitment to prioritise these issues. Led by this Ministry, the
shift towards attracting foreign-owned BVI-registered companies to the BVI marketplace offers a chance to diversify the financial services sector and bolster its unique value propositions.
However, it is important to note that while the government, via this Ministry, must take a leadership role, it is crucial to collaborate with the private sector, especially on business development initiatives and accurately gauging demand. Such cross-sector cooperation is necessary to effectively navigate the path towards economic diversification and growth. Economic Benefits. Economic diversification can bring significant benefits to the BVI, serving as a key driver of economic growth. It not only reduces the government’s dependency on the traditional financial services sector, but also promotes a more balanced economy, fostering sustainable growth within the jurisdiction.
The importance of private-public sector collaboration is crucial, but the potential benefits to the wider BVI community must not be overlooked. This diversification opens up possibilities for job creation and employment opportunities for the local populace. The likely increase in population size, potentially augmented by an influx of specialised skilled labour, can create additional opportunities for BVI residents to establish businesses focusing on social activities. This caters to the interests of newcomers during their leisure time. The anticipated rise in population will also likely boost expenditure on necessities such as food and other essential services, further benefiting the local economy.
Access to BVI. Access to the BVI has historically been a limiting factor, though recent efforts have begun to address this. Notably, American Airlines has started offering direct flights from the U.S. mainland to the BVI, with plans to add even more flights during the height of the winter season. Additionally, work is set to begin in the coming months on an upgraded ferry terminal at the western end of Tortola. Once completed, this terminal promises to offer an aesthetically pleasing arrival experience for both visitors and residents. In the meantime, while these enhancements are still underway, it is crucial to prioritise improvements to the current port of entry processes. Immediate action should be taken to ensure a smooth and efficient arrival experience. This includes providing the necessary training to the gatekeepers – Customs, Immigration
and Ports employees in particular, enabling them to deftly balance efficiency and customer service, without compromising their essential responsibilities.
Rental Space Availability. Businesses planning to establish operations in the BVI will undoubtedly seek rental spaces for residential and office use. Spaces that are already renovated and ready for immediate occupancy will be especially appealing. Once the demand has been quantified through engagement with both the public and private sectors, it will be essential to have further dialogue with real estate agents and property owners to ensure that this demand can be adequately met. BVI must establish the authority (regulation) to monitor or ensure rental space meets a minimal standard that matches the demand, specifically in the residential sector. Creating development zones that complement residential rentals in walking distance of office space would lessen the impact on parking and transportation within the central city.
While the high-end market will be satisfied, affordable housing will be necessary to capture the diversity of workers expected. Affordable housing would benefit those employees that are middle management or at a lower level. Although there is a supply of such accommodations available, it is necessary to compare it with the demand to identify and promptly address any potential shortfalls. Utilising a proactive approach concerning regulation, affordable housing, partnerships between public and private sectors, and development zones will ensure a smoother transition for businesses relocating to the BVI.
Substance Business Activities. The BVI economic substance legislation outlines numerous activities as relevant, many of which are not regulated under existing BVI legislation. Through collaborative efforts between the public and private sectors, it is crucial for the government to pinpoint the types of substance businesses to attract to the BVI for establishing presence. This could include headquarters business, shipping business, holding business, or distribution and service centre business.
The type of business targeted will ultimately shape the demand from foreignowned BVI-registered companies, define their rental space needs, and determine whether the establishment of a special economic zone, economic treatment initiative, or a combination of both is necessary. By making these strategic decisions, we can better streamline the
process for businesses and foster growth within the BVI.
Economic substance signified a notable landmark in the global financial services sector. It not only underscored the BVI’s commitment to transparency, regulatory compliance, and international cooperation, but also heralded a significant opportunity for diversifying the BVI’s financial services landscape.
Indeed, economic substance represented a paradigm shift! Compared to other jurisdictions that have taken a different path, BVI’s methodical and measured approach may serve as a unique competitive edge. Conversely, the BVI’s ranking of sixth among the least complex jurisdictions to conduct business, underpinned by the formidable robustness of the BVI Companies’ Registry and the timely establishment of BVI’s Ministry of Financial Services, Labour, and Trade, evidence key accelerators for this journey.
When contemplating relocation or setting up satellite offices, companies will assess these vital factors. As such, BVI must be prepared to adeptly S.H.I.F.T. G.E.A.R.S., aspiring to become the preferred jurisdiction for international businesses to operate, by harnessing the momentum of the economic substance wave. BB
Super
by Bert FowlesAs one of the world’s most desirable destinations bar none, the British Virgin Islands (BVI) have traditionally exerted an undeniable allure on aspirational travellers the world over.
In recent years, we’ve seen challenging times with travel, and many of the world’s premier hotspots are keen to re-establish links with discerning global voyagers and improve accessibility to capture that most elusive and desirable of groups – high net worth low environmental impact niche tourism.
The super yacht industry is at the zenith of this strata. With around 400 yachts over 24m (80ft) heading to the Caribbean annually for the winter season (approximately a 152-day seasonal period), there’s a huge swathe of Ultra High Net Worth (UHNW) tourist dollars to play for. Although an impressive number, 400 vessels represent only approximately 6.5% of the total active global super yacht fleet, leaving huge growth potential for regional economies including the BVI.
From an economic point of view, it’s a no brainer. Yet it’s also a far more ecological and sustainable path to niche travel compared to mass tourism, with super yachts offering naturally lower and lighter footfall than large commercial vessels.
Aligning global stakeholders to grow the super yacht industry is a major driver to creating unique and alluring benefits, that establish lasting destination brands of international renown. With roughly 80% of businesses in the super yacht realm having under 80 employees, the industry has a small business emphasis and operational footprint with premier super yachting locations benefitting from curated approaches to this niche tourism model.
With current the review underway by the BVI government for the entry rules for foreign commercial recreational vessels into the territory, it’s time to drill down into the figures to highlight exactly how this highly sought-after market segment can produce an outsized benefit to the local tourism community and the wider economy.
A 55m (180 ft) super yacht has an estimated
It is far more ecological and sustainable path to niche travel compared to mass tourism, with super yachts offering naturally lower and lighter footfall than large commercial vessels.
annual operating cost of $4 million, supporting over 41 jobs. Interestingly, approximately 33% ($1.3 million) of this amount is allocated to local economies through provisioning, dockage, crew/guest expenditures and fuel services.
It’s not difficult to see how beneficial the expenditures by these floating businesses can be to a host port/destination and incumbent workforce. Taxi drivers, florists, restaurants, and excursion organisers, entertainers are among the small businesses who stand to profit most from this low impact and intimate niche tourist activity.
With a super yacht typically chartering only four times a year during the Caribbean season, for a total regional period of around 42 days (representing only 27% of the total potential 152-day winter seasonal availability), each vessel represents significant local revenuegenerating potential, with the BVI’s goal being two-fold – increasing the number of visiting yachts and increasing the length of stay. Building a clear, refined, and long-standing relationship with the super yacht community, the BVI can extend its seasonal attractiveness and create a unique destination selling point that resonates across the very competitive global tourism landscape.
Competition for the large vessel niche market is a serious and fiercely competitive global enterprise, with destinations across the world working to build unique facilities and infrastructure to benefit from these highly transient global businesses. Providing BVI destination stakeholders with an enhanced understanding of vessel costs and operations, data driven market expectations can align with usage, operational costs, and charter potential to support the strategic growth of the local economy year after year well into the future. After all, there is no diminution in the in the global order books for these vessels.
The growth of super yachting and “vested
destination guests”
Roughly only 300 yachts over 24m are launched each year representing only a 5% growth rate for the entire global fleet. Each new vessel represents a growing desire for a curated approach to destination management and select opportunities for local economies to compete for new market entrant business. Clients are looking for an experience that allows true intimacy with the destination, giving a memorable, once in a lifetime style visit, which begins with a perceived reputation and word of mouth communication.
A yachting guest is a “vested destination guest” who wants to really experience the benefits of the culture and complete immersion in that community. It’s an inherent and highly attractive part of the experiential side of super yachting. Super yacht culture also feeds into the sophistication and elegance of a destination, driving and elevating international brand awareness and helping to create a unique, niche experience.
Providing clear one stop and easily accessible marketable super yacht entry processes accommodates high impact, low footfall tourism, which is the lifeblood of unspoilt and upmarket island destinations like the BVI.
Simply put, everyone who disembarks a super yacht is instantly imbedded with the magical VIP ‘feeling special’ vibes that come from visiting a place at the top end of the aspirational vacation ladder. Embracing the super yacht industry not only brings the economic benefits, but the cultural benefits as well, not forgetting the natural increase in international allure.
Super yacht destinations provide a wonderful experience from the water to land and the BVI must reposition the destination as one of the very best in class globally. BB
All the images in this section, with the exception of the BVI Smart City master plan and the rendering of the H. Lavity Stoutt Community College campus, have been generated using artificial intelligence.
The journey the British Virgin Islands (BVI) Financial Services Commission (FSC) has been on for the last twenty years has been nothing short of remarkable.
Two decades ago it embarked on a transformative path with a vision to make the BVI a global leader in international business and financial services. As we commemorate the FSC’s 20th anniversary, we reflect on a journey characterised by groundbreaking achievements, unwavering dedication, and an enduring commitment to excellence. Nevertheless, we must also look forward to a world where expectations of the FSC will continue to increase, as together, we address the challenges of preventing access to the global financial system by those with ill intent.
Since day one, the FSC pledged to uphold the highest regulatory standards, ensuring a well-governed and stable financial environment. This allowed our industry to develop and expand, safe in the knowledge that there were sound regulatory guard rails.
Under the steadfast leadership of its dedicated team of professionals, the FSC has enabled the BVI to position itself at the forefront of the global financial services industry.
As we celebrate the 20th anniversary, we must, of course look to its founding father, Dr. Robert Mathavious. As CEO of the FSC from its foundation, until his retirement in 2020, it is impossible to overlook the extraordinary contribution he made. A financial services pioneer, it was his vision, leadership, and dedication which was so instrumental in establishing the BVI as a leading international finance centre (IFC), and shaping the FSC into the world-class regulatory body it is today.
The FSC has been resolute in its development of a first-rate regulatory framework that promotes stability, confidence, and responsible financial practices. This comprehensive framework, addressing issues from anti-money laundering (AML) and countering the financing of terrorism (CFT) to corporate governance and investor protection, has been pivotal in making the BVI a preferred jurisdiction for diverse financial institutions and businesses.
The FSC’s dedication to transparency and accountability has solidified the BVI’s reputation as a jurisdiction adhering to the highest international standards. Through proactive regulatory disclosure, active participation in international forums, and unwavering commitment to international compliance, the BVI has earned its place among the world’s leading IFCs.
Recognising the significance of innovation and growth, the FSC has played a central role in nurturing a vibrant financial services industry in the BVI. By supporting FinTech and green finance initiatives, establishing a dedicated FinTech Sandbox, and collaborating with industry stakeholders, it has cultivated an environment that encourages innovation, attracts new businesses, and diversifies the economy.
Under the stewardship of the FSC, the financial services industry emerged as a pivotal force in driving economic growth and development in the BVI. It has created substantial employment opportunities, become one of the pillars of the BVI economy as the majority source of government revenue, and played a crucial role in diversifying the territory’s economy.
As we reflect on the FSC’s 20-year journey, we are filled with immense pride and admiration for its unwavering commitment to excellence. The FSC’s achievements transformed the BVI into a leading IFC and positioned the Territory as a global hub for financial innovation and responsible financial practices.
However, while the success of the FSC , guided by its unwavering commitment to regulatory excellence, transparency and innovation, is unquestioned, there are clearly challenges on the horizon.
International Finance Centres are always under pressure from those who would seek to misuse the global financial system for their own illegitimate ends. We must be robust and proactive in ensuring that the BVI is protected to as great a degree as possible and that a sustainable future is secured for our business and financial services industry.
We anticipate the FSC’s focus in the coming years to be on securing the regulatory guardrails of the BVI, improving our enforcement capabilities, developing new products and services, and diversifying the industry.
Within this, specific areas of focus are likely to be:
• Strengthened international collaboration with external regulatory authorities and regional and international standard setting bodies. The FSC will continue to share best practice and promote consistency in global financial regulation, as well
as ensure that regulation is responsive to new standards and matched by the enforcement levels of our investigative authorities.
• Enhanced regulatory agility, so that the FSC keeps abreast of emerging trends and challenges, and acts to ensure that the BVI’s regulatory framework remains agile and responsive to the requirements of standard setters.
• Intensified industry engagement, so that the FSC’s regulatory requirements are clearly understood by the BVI industry and by partners and clients beyond.
• Fostering of innovation and technology adoption to support the development and adoption of new technologies within the financial sector, promoting innovation and enabling the creation of new products and services, especially in new areas of opportunity such as FinTech.
• Promotion of sustainable finance to help the BVI to mitigate climate change and build resilience and reinforcing the BVI’s commitment to its environmental stewardship and social responsibility.
As we look to the next twenty years, the FSC will need to continue to navigate the evolving global regulatory environment as it continues to play a key role in shaping the future of financial services.
From the Government’s perspective, we will devote the necessary resources so that the FSC’s dedication to excellence, innovation, and collaboration enables the BVI to remain a premier destination for financial services, fostering economic growth and prosperity for generations to come.
I believe by working together in this way, we can ensure that the bright future for BVI financial services envisaged twenty years ago, can be realised in the next twenty and beyond.
In closing, I extend my heartfelt congratulations to the FSC and its dedicated staff for all their contributions over the past two decades. Their commitment has been instrumental in shaping the BVI into a leading IFC and a beacon of stability and innovation in the global financial landscape. As we embark on the next chapter of the FSC’s journey, we are confident that they will continue to lead the BVI towards even greater heights of success. BB
To say we live in interesting times would be an understatement. The last 5 years have had geopolitical shifts, the world’s emergence from a pandemic and the galloping pace of technological advancements in all areas of life. Looking to the future, the forces that shape financial services regulation include several aspects. The impact of regulation is also expanding; the vision of the BVI’s financial services industry is one that sees us surmounting challenges, leveraging opportunities and embracing technology.
As we continue to craft our strategy to remain an effective regulator, we must be mindful of the critical success factors for both the regulator and the regulated. Balancing the Commission’s role in a dynamic environment will be challenging considering all of the factors that shape regulation. From evolving business developments, changing consumer trends, advancements in FinTech that have augmented existing products and services, as well as novel products must all fall into scope. The Commission can only remain fit-for-purpose well into the 21st Century with agile regulatory responses. Upgrades to regulation must be crafted with and in response to changing risks and threats –whether from criminality, factors negatively impacting market stability and other external factors.
Increasing technological advancements are being utilized by everyone. Tools like artificial intelligence (AI) and application programming interface (API) will allow for financial services to transcend where and what it has been in the next 5 years compared to advancements achieved in the last 50 years! The Commission will be among those that integrates greater technological capacity to maximize scarce resources towards effectiveness. One doesn’t need to be a visionary to foresee that the regulatory ecosystem will undergo tremendous changes.
FinTech has allowed for new products and services to be created in financial services, as well as for new approaches, such as open banking and digital payments. The novelty of various FinTech projects generates excitement and interest from all areas. These projects also present new risks and have necessitated faster responses for a variety of reasons. In response, the Commission will undergo upgrades, its regulators and other staff will be up-skilled at the pace of change of technology.
analogue counterparts; the scope and scale of impact brought about by FinTech have resulted in known phenomena, such as market instability and changing risks. The partnerships forged through membership with, and participation in these standard setting bodies will be paramount to ensuring that the BVI as a jurisdiction keeps pace with the changes in financial services.
In the early 2020s, the trend towards globalization has shown signs of stress fractures. Conflicts in parts of the world, and particularly the war in Ukraine, triggered
our statutory objectives. Part of the role of education is to bring awareness to not just the nature of the industry, but also to the typologies of fraud and scams that can lead people to being defrauded of their hardearned money. Educational efforts will also be expanded to the youth through the Commission’s Money Matters initiative. Ensuring that the next generation is financially literate is crucial to the continued success of the BVI as a financial services centre.
“One doesn’t need to be a visionary to foresee that the regulatory ecosystem will undergo tremendous changes.”
Given the history of the BVI, I see the Territory being a gestalt – a uniquely positioned set of 60 islands and cays, that, taken together from the vantage point of all those interested in financial services, has consistently been more (have more gravitas) than the sum of its parts. The industry and its professionals, the Government, Competent Authorities and the global client base certainly more than the sum of their parts within the BVI.
The BVI’s future as a pre-eminent international financial centre remains certain from my perspective. Technology allows people to have incredible global reach in conducting business. This global reach is a legacy of the BVI financial services industry. The same technology that allows our industry to thrive in challenging and prosperous times will also auger future successes.
Context is important to envisage the future of regulation. The international standard setters also have a role in shaping the future of regulation. As a member of the primary regulatory standard setters – GIFCS, IAIS, IOSCO, FSB – the Commission will be well positioned to ensure it contributes to the discussion and creation of new standards. The changes we face collectively have their
the voluminous imposition of sanctions. The geopolitical shifting also brought six new members to BRICS (now referred to as BRICS plus). Criminals and other bad actors continue to explore new methods to generate illicit finance – activities that law enforcement agencies, regulatory authorities and other organisations fighting crime continue to do important work to detect, stop and prosecute. All these factors feed into the updating and upgrading of the international standards that regulators globally will have to adopt. However, there is another factor that requires greater agility.
Criminals are typically early adopters of new technologies. The advances that regulators are focused on include the concerning trends of money laundering, terrorist financing and other illicit financing activities being leveraged by technology. Cyber-crimes have increased tremendously, keeping pace with technological advancements. Nefarious actors create new ways to defraud persons and businesses with new strategies (and old) coupled with technological developments. Pig butchering, the use of ransomware and crypto-trading scams are just a few of the ways in which criminals have defrauded billions of dollars from professionals and the public in the past decade.
As crimes continue to rise and evolve, the Commission will increase its outreach to educating people in and around the financial services industry. Education is a part of the Commission’s mandate; it is in
Governance in the novel space, reviewing the people behind innovations will become increasingly important. Particularly around areas that involve AI, machine learning and data management. Ethics in the development and augmentation of AI is critical for all sectors that seek to utilize this tool. Therefore, the scrutiny of the persons and processes will become more important as we advance into the Digital Age.
If the outlook for 2030 and beyond for the BVI had to be distilled into five high-level statements, it would be these.
• Ensure fair and safe financial services and reduce criminality and threats.
• Increased focus on Governance.
• Integrating Technology-enabling and user-friendly legislation.
• Upgrading systems and upskilling Human Resources.
• Managing ongoing changes and the cost of Compliance.
Transposing and updating laws and regulations is an ongoing process in the face of continued advances and changing risks. To allow the BVI to remain competitive, it is important for future iterations of our regulatory framework to be user-friendly, as well as embedded technology neutral (or technology enabling) underpinnings. The Commission will also be seeking to integrate SupTech, where technology is increasingly leveraged to allow us to supervise more effectively and efficiently. Of course, the most important asset, human resources, must be upskilled. As an outcome, we can expect there to be more nuanced supervision as we approach the 2030s. BB
Hurricanes Irma and Maria devastated the Territory in September 2017. In the wake of the unprecedented damage, the Commission demonstrated profound resilience through its Business Continuity Plan (BCP). The commitment and professionalism of our staff during this crisis enabled the resumption of core operations in less than a week. The wider financial services industry also adapted quickly and was able to service clients with minimal interruptions.
This resilience was again brought to bear during the COVID-19 pandemic. The Commission was again able to pivot to ensure that its operations and engagements continued with minimal interruptions.
Strong collaborative framework with industry practitioners and other stakeholders
All aspects of business and economies face headwinds. The pressures that the BVI faced beyond the pandemic and storms presented unique challenges. In the past decade, the Commission forged deeper engagements with the industry. During the pandemic, everyone pivoted; the Commission accomplished even greater public-private engagements through online platforms and other media. Concurrently,
The past decade built upon the first when the BVI Financial Services Commission was established as a statutory body. Our efforts to effectively discharge our remit have been centred around three themes – Resilience, Collaboration and Adaptation.
the Commission has made significant strides in leveraging its engagement with international standard setters and other supranational bodies over the past 10 years.
The Commission’s Hong Kong Representative Office was established in 2014. Since its establishment, the Commission has leveraged deeper partnerships in the Asia Pacific region, which has been the primary market for the BVI’s financial services industry. The Commission has been effectively increasing its engagements with partners in this region towards building more robust ties with the business community.
Smaller jurisdictions are often challenged with limited resources, which constrains their ability to engage fully in the works of global bodies. Our accomplishments with international standard setters includes being a contributor to the GIFCS Standard for Trust and Corporate Services Providers, contribution to FATF Typology Reports and advancement of regional dialogues that have ensured the BVI keeps pace with strategies needed to mitigate against the unique risks impacting smaller countries. From a regulatory perspective, the steps needed to be taken forge closer ties with our counterparts and international standard setting bodies to continue and advance the fight against money laundering, terrorist financing and other financial crimes.
Upgrading to VIRRGIN and integrating SupTech
Innovation in regulation requires design-thinking. The processes used for supervision have had the first phases of reform to allow for SupTech – Supervisory Technology – to enhance the work of the Commission. Regulators and Registrars are continually upskilled. Together, with upgrades to the Virtual Registry and Regulatory General Information Network (VIRRGIN), which is the Commission’s flagship software application, have continued to allow for more impactful and timely registration and other services to the industry. This includes the extension of VIRRGIN LITE in the BVI’s Hong Kong Representative Office.
As we look to 2030 and beyond, the Commission is poised to make the necessary advancements to ensure the BVI remains as a leading financial services centre. At the start of 2024, we are now at an inflection point. It is 20 years since the enactment of the BVI Business Companies Act; arguably the cornerstone of BVI’s financial services industry. The next 5 years promises to be more profound changes to financial services as currently exist for every country. To ensure that the BVI is well positioned, the Commission will continue its work to bring about positive transformative change for all stakeholders of the BVI’s financial services industry towards a transcendent future. BB
Challenges are ever-present in the modern world. Remaining nimble as a regulatory authority is of the utmost importance. In this vein, the BVI Financial Services Commission remains vigilant to the increasing pace of developments in financial services which create new opportunities, as well as correlated risks. There are three core challenges that lie ahead for all jurisdictions to navigate, including the BVI.
Cybersecurity threats to the industry.
Given the past data hacks impacting the BVI and several other financial jurisdictions (Panama Papers, Paradise Papers and others), it would be imprudent to ignore the increasing risks being faced globally of these ever-evolving threats. Cybersecurity risks can also emanate from within an organization. Therefore, firms must also refocus on their hiring practices, upgrading internal controls and ongoing staff training.
The last two decades have heralded global financial crises, pandemic, historic climatic impacts, war and geopolitical conflicts and more. This volatility is also an opportunity for many to provide quality services and certainty to markets that are underserved in the space of certainty.
Calibrating regulation to ensure utility and functionality.
Evolving supervisory strategies to keep pace with changing practices and to ensure we effectively mitigate emerging risks. The restructuring of the Commission’s supervisory functions has brought greater consistency across all sectors and has improved efficiency. Dynamic global conditions, and the resultant changes to international standards translates to the challenge of updating or creating laws and regulations that is fit for purpose while being sufficiently robust to maintain the BVI’s international standing as a leading financial services centre.
Given the evolution being heralded with FinTech, the Commission anticipates even more collaboration with industry stakeholders. As challenges arise, it is important to not wait for external drivers to foster even closer productive and pragmatic dialogues between the regulator and regulated.
To further transcend current limitations, telecommunications firms will need to improve access and latency issues. Achieving real-time digital communications for trading, payment systems and other facilities that are currently undergoing augmentation will be paramount for the BVI to remain on the frontlines of global trade and truly international financial services. BB
STANDING
Leon Wheatley Director, Authorisation and Supervision
Cherno Jallow, KC Director, Policy Development and External Relations
Glenford Malone Deputy Managing Director, Regulation
Kenneth Baker Managing Director/CEO
Brodrick Penn Deputy Managing Director, Operations
Stephen Grayson Director, Legal
Sheldon Scatliffe Director, Finance
SEATED
Myrna Herbert Director, Registry of Corporate Affairs
Annet Mactavious Director, Human Resources
PHOTOGRAPHED BY Hakeem C. Gravesande
There has rarely been a tougher time to predict the global economy, but by the same token, thinking clearly and strategically about the future is all the more important.
Is unprecedented the new norm?
With the recent COVID pandemic, the word ‘unprecedented’ has become almost ubiquitous, especially among economic forecasters and commentators – but, in practice, current global uncertainties are not the result of exceptional economic pressures or even historically unparalleled events.
Today’s world – war in Europe, Arab-Israeli conflict, east-west tensions, global annual inflation at 6.9 per cent, a 525 basis point increase in the Federal Funds Rate in the space of nineteen months – has (at least partial) precedents.
In the past 30 years alone, we have seen wars in Albania, Azerbaijan, Chechnya, Georgia and across the former Yugoslavia, as well as European powers intervening militarily in Afghanistan, Chad, Iraq, Libya and Mali. Over the same period, there have been two Palestinian intifada uprisings and two major Israeli expeditions in Lebanon, as well as four in Gaza even
before Hamas’s terrorist atrocities of October 2023.
The Cold War may have ended in 1991, but relations have been increasingly frosty for a decade or more between western capitals and not only Moscow but also Beijing and a growing list from the ’Global South’.
And there is nothing extraordinary about an inflationary macroeconomy. Although we have become used to fairly stable global inflation of between three and five per cent since the start of the new millennium (barring a brief spike in 2008), high inflation is not uncommon historically. For much of the mid and late 1970s and early 1980s, G7 countries experienced double-digit inflation. Meanwhile, United States’ interest rates were as high as 6½ per cent as recently as 2000 and over 19 per cent in the early 1980s.
Rather, the economic risks we face now, reflect the unwinding of the previous abnormality and absurdity created by the global financial crisis of 2007/8 (albeit catalysed and compounded by the seismic systemic shock of the recent pandemic).
The collapse of the United States’ mortgagebacked securities market, which was founded on mis-sold sub-prime loans that were catastrophically misunderstood by investors, unleashed a worldwide financial seizure that created the then biggest recession since the Great Depression of the 1930s.
The response of policymakers was unprecedented, in the true sense of the word. Central bankers could not set interest rates low enough to stimulate the economy – so they created a new tool. ‘Quantitative easing’ (or, more simply, ‘QE’) saw the biggest nations e-print money and swap it for debt instruments, mostly government bonds, held by otherwise sclerotic financial institutions. Between 2008 and 2012, asset purchases in the United States and United Kingdom amounted to US$3 trillion and £375 billion respectively, equivalent to twenty per cent of gross domestic product in both nations.
What followed was almost a decade and a half of free money – at least for the big banks (many of whom were, ironically, the most culpable for the original crisis).
It is this world of almost boundless liquidity which was the historical aberration, and it is its reversal which is now causing uncertainty and instability. Central banks are going back to the future. They are returning to the previous norms of monetary policy: positive real interest rates, which rise in response to inflationary pressures and fall when they ease.
The changing role of private equity finance is one example, relevant to the BVI’s international business and finance centre, where the end of the era of free money is being felt.
By leveraging QE-supported low-cost bank debt, private equity managers have had over a decade of strong growth in the number of deals. But the return to normal (higher) interest rates more recently has put the brakes on.
Global private equity transactions were down 41 per cent in the first nine months of 2023, compared to the same period in the previous year. More generally, the US$2 trillion of merger and acquisition deals in the first three quarters of 2023 was down a third on the previous year, their lowest level in a decade. We expect this pressure on PE firms to continue, as they return to a world where their focus has to be more on identifying where they can add real value to businesses and not just arbitraging sources of finance.
This will impact on the nature of corporate work undertaken by the BVI’s international business and finance centre, and potentially its scale too. Road Town is home to numerous private equity funds structured, for example, as limited partnerships, while the assets underlying many deals are held in BVI Business Companies. But the BVI is not as dependent on this activity as many other finance centres. Indeed, a move back towards more traditional corporate financing – with greater focus on equity finance, bond issuance and securitised loans – may play well to the islands’ strengths.
Zombie apocalypse now?
The impact of post-QE monetary policy will also be felt in the number of business failures.
Struggling enterprises have had an easier ride during the period of quantitative easing. Low interest rates meant that the price of past business mistakes reduced as the costs of servicing debt fell.
The numbers of somewhat-flamboyantly-described ‘zombie’ firms, which are economically unviable, but manage to avoid insolvency through luck, judgement or others’ goodwill, have risen – with latest data indicating that one-in-ten publicly listed and one-in-twenty privately owned firms are among the corporate living dead.
And these faltering firms have been lumbering on for longer. On average, listed zombies are now clinging on for four years, up from under three prior to QE; those that are privately-owned are surviving for over 3½ years, which compares to under two years before the era of free money.
Overall, the short-term global outlook is weak. After an initial post-pandemic rebound, the world economy is slowing.
Although views vary, commentators are generally expecting annual growth in the global real economy to slow to around 2½ per cent in 2024 – this is down from almost 3½ per cent in 2022 and an estimated value for 2023 just under three. The following year could be worse, although frankly nobody is betting on predicting that correctly just yet.
But the threat of inflation has not receded sufficiently. Although, for example, the International Monetary Fund forecasts global headline inflation to fall from 8.7 per cent in 2022 and an estimated 6.8 per cent in 2023 to 5.2 per cent in 2024, the decline in underlying (core) inflation is projected to be more gradual. We believe that price rises could be stickier – with geopolitical, energy and commodity risks largely biased to the upside.
Central bankers will be left having to finely balance continued inflationary pressures with fragile demand. Of course, this should be their day job – but it’s one they haven’t really had to do in the QE era. Indeed, it’s a job that many in the central banks have never had to do; most of those now in charge of monetary policy will have been, at best, junior officials when inflation was last at current levels. Do not underestimate this loss of institutional memory, and its potential impact on the quality and timeliness of decision making.
Often heavily indebted, these businesses are susceptible to increasing interest rates. Although governments’ support schemes during the pandemic and more recently have helped to avoid a zombie apocalypse so far, the numbers teetering on the edge mean that the next few years will see the failure rates uptick across sectors and nations. In the medium-term, the process will weaken world growth – at the expense of all economies, including the BVI’s, but thereafter prospects should be better.
In the near-term, a global clear out of near-dead enterprises could be positive for the BVI. There may be some additional insolvency work directly on the islands. But most of these zombies will be domestic entities in foreign jurisdictions. Nonetheless, the rationalisation of their assets may well involve Road Town structures – and more work for the international business and finance centre.
This is not a comfortable policy environment for investors – and one where higher risk premiums, more cautious behaviour and lower volumes may be expected. But this is also the environment where the security of long-established, reputable offshore centres with a history of sound rule of law have increased value.
The past two decades have seen the Chinese economy expand rapidly, making it the world’s number one exporter of goods, accounting for fifteen per cent of all global exports in 2020. The country’s gross domestic product per capita grew ten-fold between 2001 and 2020, as its accession to the World Trade Organisation coupled with the emergence of global value chains helped China become the world’s dominant manufacturing hub.
But much like the global economy, China is facing tough and uncertain times. Its economy faced a slump in 2022 as annual growth fell from just over eight per cent to two per cent. Given China’s contribution to the world economy, this slowdown will have knock-on effects. In 2023, the country’s growth rate is projected to be above the global average at around five per cent, but growth rates will fall in each subsequent year.
The outlook for China remains uncertain – and the majority of risks are downside, particularly given the danger of the property debt position, as higher interest rates will likely lead to lower valuations of private assets.
With 44 per cent of BVI Business Companies having ultimate beneficial owners there, when China sneezes, Road Town catches a serious cold. The islands’ international business and financial centre cannot rely on customers in the likes of Beijing, Honk Kong and Shanghai to provide meaningful growth in the coming year – and possibly longer.
But political turmoil and volatility elsewhere in the world will see other markets grow. In Latin America, for example, the risk of political instability could see an increase in business for the BVI, as families look to protect their wealth from new regimes.
Looking a little further ahead, the world economy, and the implications for the BVI, could take varying and divergent paths – depending on the geopolitics and the extent to which the recent decades of globalisation are reversed.
To illustrate the point, we have devised three possible scenarios: ‘weaker internationalism’, ‘bloc economy’ and ‘new economic nationalism’.
Under a ‘weaker internationalism’ scenario, global trends will continue at a slower pace. With a relatively stable and familiar international political and policy environment, the financial and efficiency benefits of international supply chains weigh more highly with businesses and investors, than the risks of disruption underlined by the pandemic and the Russian invasion of Ukraine. While weaker internationalism offers a relatively positive outlook for the global economy, it would still represent a notable decrease in historical growth rates. Future global economic growth rates may be at least one percentage point lower per year, and trade and foreign direct investment will experience slower growth compared to precovid rates. Under this scenario, the fact that the BVI is open and accessible to markets all around the world will be a key reason to use the international business and finance centre.
A ’bloc economy’ scenario envisions ongoing economic, regulatory and at times, political
integration among countries within primarily regional geopolitical blows. However, these various groups will drift apart from each other. The shifting and more uncertain international political and policy landscape in this scenario, directly influence the decision-making and risk tolerance of businesses and investors. Corporates must take into account the increased expenses and uncertainties associated with serving markets or relying on extended supply chains that cross regional boundaries, and investors may encounter additional costs and risks when repatriating returns from or liquidating assets in different regional blocs.
Compared to the weaker internationalism scenario and recent historical trends, the bloc economy paints a less optimistic picture for the global economy. Growth rates in global economic output may be less than half of those achieved pre-pandemic, with similar effects extending to the other various indicators of international economic connectivity. This scenario will see increased complexity for cross border activity and transactions. Tough protectionist rules, capital and currency controls, and differing tax and regulatory regimes will require expert legal, tax and accounting advice services the BVI’s international business and finance centre is ideally placed to provide.
The third narrative scenario, ‘new economic nationalism’, sees many of the larger individual nations going their own way and becoming more protectionist and anti-internationalist. Among the three scenarios, new economic nationalism has the most detrimental impact on future global economic growth, potentially reducing it to as low as one percentage point annually in real terms. Businesses, investors and consumers contend with unwarranted new expenses and heightened risks. Global value chains become disjointed and fragmented, resulting in increased market volatility and less predictable trends. Under this scenario, with protectionism far more prevalent, there is a need for more sophisticated offshore advisory and support services, something which the BVI’s multidisciplinary international business and finance centre can provide.
These three narrative scenarios are just that –scenarios. They are not forecasts, but we are already seeing elements of each creeping in.
Increasing pressures from Europe with regards to transparency and tax recovery will run in conflict with the potential reasons why business may end up in the BVI. Ongoing discussions regarding the implementation of public registers of beneficial ownership in the Crown Dependencies and Overseas Territories, the BVI’s ‘blacklisting’ by the European Union in early 2023, and the move towards a global minimum tax could act together to reduce European business for the BVI. With European Parliament elections taking place in June 2024, and the Presidency of the Council of the European Union set to pass on from Spain to Belgium and then Hungary within the next twelve months, the scrutiny of non-member international finance centres could yet intensify.
Domestic uncertainty alongside unpredictable global economic environment.
Domestic political fallout is an unwelcome spectre hanging over the jurisdiction, and new government in London could have consequences for the BVI. The conclusion of the Commission of Inquiry examining governance standards in the BVI’s public services, followed swiftly by the unrelated detention of the then Premier by the United States, continues to cast a shadow over the islands’ hardearned reputation as a politically stable jurisdiction. As of the end of August 2023, efforts have been initiated to address all 50 of the recommendations outlined in the Commission of Inquiry’s framework.
Following the outcome of the Commission of Inquiry in 2022, former United Kingdom Prime Minister – Foreign Secretary at the time – Liz Truss, took the decision not to impose direct rule on the BVI. But the inquiry’s findings and the subsequent fallout from events in Miami serve as a reminder that as an Overseas Territory, London continues to loom large over the BVI.
Polling in the United Kingdom suggests that after almost a decade and a half in power, the Conservative Party are on the cusp of becoming the opposition at Westminster. With the Labour party committed to abolishing the non-dom regime if elected, IFCs including the BVI should expect to face renewed scrutiny from London.
Potential for solid few years, but nothing is certain for BVI.
Under ordinary circumstances, we would expect the changing geopolitical situation to lead to an even greater demand for the sophisticated offshore services of the BVI’s international business and finance centre. Clients will be seeking stability, something the jurisdiction has historically been able to provide. That may still prove to be the case, but slow global growth coupled with domestic political turbulence mean the next three years are unlikely to be smooth sailing.
Uncertain and unprecedented times look like being the new normal for a while yet.
BB
Following the most turbulent period in recent memory, Vistra surveyed over 600 professionals and conducted 20 in-depth interviews to better understand the challenges today’s global businesses and investors face. The result is the tenth Vistra 2030 Report, which provides the research series’ most comprehensive look yet at how and why businesses, investment firms, regulators and the industry itself are adjusting to a new kind of globalisation.
The previous iteration of the Vistra 2030 series was released in October 2020. The pandemic gripped the global economy and the dominant sentiment was uncertainty. Businesses, markets and individuals around the world had no idea when pandemic lockdowns would end and what their long-term effects would be.
Months later, these uncertainties were compounded by Russia’s invasion of Ukraine, which fuelled inflation and interest rate rises and exacerbated long-simmering tensions between the US and China. Underpinning these events, the unfolding climate crisis and digital revolution continued to drive change across the global business landscape.
The latest Vistra 2030 Report shows that confidence is returning to the global economy, but the lasting effects of the pandemic continue to be felt — from remote working to a rethinking of supply chains. Geopolitical tensions also persist, and cross-border business has been permanently altered.
Fund, corporate, capital markets and private wealth market participants are modifying their strategies and operations in response to these and other evolving realities. And to meet these new challenges, they’re demanding more from their fund and corporate services providers.
These service providers have evolved over the last decade and deliver more offerings than traditional tax and privacy-related services. The industry now helps fund, corporate, capital markets and private wealth market participants optimise their organisations and reduce their risks in a changing world.
The latest Vistra 2030 Report shows that confidence is returning to the global economy, but the lasting effects of the pandemic continue to be felt — from remote working to a rethinking of supply chains. Geopolitical tensions also persist, and cross-border business has been permanently altered.
Participation in the Vistra 2030 survey has climbed over the years and the report now has a truly global reach, with over 3,000 total respondents from every region in the world. Throughout the series, the individual reports have focused on certain recurrent topics, including changing perspectives on key jurisdictions, shifting client priorities and regulatory transformation. Series editors have also added (and in some cases dropped) topics to ensure the reports address the pressing issues facing global businesses and investors today and in the future. Finally, given the longevity of the series, Vistra rebranded its title from Vistra 2020 to Vistra 2030.
Multinational organisations, investors and regulators have witnessed significant shifts along the way. For example, privacy and tax planning were cited as the top growth drivers in the 2010 survey. In the latest survey, only 4 percent of respondents expect tax planning to drive new business, and just 2 percent highlight privacy.
The 2030 research series hasn’t just charted survey responses. It has put the data into context, and its editors have drawn conclusions with the help of Vistra’s in-house experts and the insights of the many industry veterans they’ve interviewed in the last decade. The 2020 edition of the report predicted globalisation would face its toughest test yet, and that forecast has been borne out, thanks not only to the pandemic but to events since.
We have entered a new, post-pandemic era of cross-border remote working, evolving global supply chains, geopolitical tensions and other realities. The cumulative results of Vistra’s surveys indicate that we are experiencing a “new globalisation.” Businesses are redesigning supply chains, investors and wealthy individuals are diversifying their assets, and regulators continue to resist cooperation, creating an increasingly complex global regulatory landscape. Proliferating ESG requirements are seen as especially important to today’s businesses and investment firms.
This new globalisation is the background of the latest Vistra 2030 Report, which has four headline findings.
1. Confidence is returning despite global headwinds
• Over half of survey respondents are confident about their firm’s growth prospects, up from the 38% in 2020, but below the 75% in 2018.
• Most respondents think that any recent setbacks to globalisation are temporary.
• Changes in the global economy and geopolitical upheaval top the industry’s perceived list of constraints on growth over the next 12 months.
• Growth in the funds industry, M&A activity and asset protection are identified as the top drivers of expansion for the next 12 months.
2. The United States moves to the top of our jurisdiction rankings
• The US dislodges Singapore from the top spot. The rise may reflect the US’s light-touch regulatory environment and/or its position as the largest global economy.
• In APAC, Hong Kong has recovered its advantage over Singapore and the UK takes third place.
• Despite shifts—including a gradual shift from offshore to onshore jurisdictions—our rankings have remained relatively consistent
since the series began, perhaps indicating businesses and investors are attracted not only to strong domestic markets but to tried and tested targets.
3. ESG is set to shape the future of the fund and corporate services industry
• A majority of respondents believe ESG reporting requirements will become the global norm by 2027.
• Some industry firms report that ESG is a topic of daily conversation with clients.
• More than a quarter of respondents (27%) think ESG expertise will be important for attracting clients over the next 12 months.
• Our industry’s experience in navigating complex regulations across different markets will be particularly important for many clients.
4. Global regulatory cooperation is expected to slow, but could find fresh momentum
• Survey respondents are doubtful about the prospects for international convergence on key regulatory initiatives in the coming years. This continues a trend of perceived regulatory divergence that started with the last 2030 report (published in 2020).
• Only 33% expect global harmonisation of tax rates despite OECD plans for a global minimum corporate tax rate, for example.
• Yet those expectations could be confounded; convergence on key elements may still be achieved, particularly if the EU sustains a concerted push.
It’s difficult to overstate the transformative effect the last three years have had on the global economy. While some businesses and institutions are grappling with the uncertainty, this backdrop is creating new opportunities and catalysing the evolution of the industry.
As we’ve seen, perceptions that the fund and corporate services industry is only about tax and privacy are outdated. Multinational businesses, private equity firms, family offices and other stakeholders are looking beyond these areas to gain financial and operational efficiencies. They’re now optimising all aspects of their organisations across their global footprints, from supply chains to multi-country payroll to corporate governance and more.
The fund and corporate services industry must help its clients operate as effectively and efficiently as possible within this new global economy. Businesses can reduce their financial and reputational risks, and gain a competitive edge, by optimising their operational and fiscal efficiency, navigating regulatory requirements and moving nimbly in response to customers’ and investors’ changing needs. Expansion into growth areas such as ESG will be essential to the industry’s future. Those industry providers that don’t keep pace will be left behind. BB
Awell-seasoned miner at Indaba once described the importance of mining to me; ‘Sonny, almost everything not living that you come into contact with today will have been mined or owe part of its existence to something that was mined’.
These days it’s not a far stretch to say that everything we come into contact with during our daily lives has to some degree been subjected to regulation at some point in some place for some or other reason. The food we eat, water we drink, air we breathe, transport we use, work place we attend, payments (for the most part…?) we make and the bed we sleep in at night are all subjected to some or other kind of regulation. And for good reason; regulation of such things is designed to make them better, safer and free (or, at least, at less risk of) injustice, manipulation and prejudice. We even self-regulate!
Accepting then, that our lives are
crisscrossed with multiple types of regulation, our essential focus must be “antiregulation”, but more about ensuring that things are appropriately and well regulated.
Inappropriate and misguided regulation, besides being irritating, is a costly time waster that destroys business efficiency and efficacy. Ease of doing business is vital to economic function. Strangle business operation and innovation and the economy will suffer. Permit reckless business behaviour and practices and the economy will also suffer.
If a system or process is to be regulated, certain entrenched ground rules ought to be followed:
• What is the system or process to be regulated? Is that system or process fully understood?
• Why does that system or process require regulation?
• What are the objectives of regulating that system or process?
• Will the proposed regulation of that system or process achieve the intended objectives of regulation?
• Will the proposed regulation damage that system or process?
High-quality research is essential for achieving the right balance of risk: between harm and benefit of regulation and the implementation of appropriate regulation.
Identifying the objectives and purpose of regulation is also essential to reduce the risk of regulatory capture. Regulatory capture exists where the regulation gets designed (or its enforcement influenced) to benefit the target of the regulation or create a benefit in favour of something other than the public interest. Global regulatory standards should benefit the global public interest; there are numerous examples of a fractured focus that benefits the interests of a very select few while even harming the interests of the public at large.
Navigating the tightrope is not a guarantee for successful regulation. Other determinants of effective regulation include implementation, interpretation and enforcement.
Tortola is similar in size and shape to Manhattan but very different geographically, demographically and on most other comparators too. The British Virgin Islands (BVI) ranks second (just behind Delaware, the global leader) in number of companies formed and registered. During my 17 years of practicing law in the BVI there have been few (if any) weeks that I have not interacted with someone based in New York (or another leading financial centre of the world). Such is the integration of BVI financial services within the global financial services market. Manhattan and Tortola may differ dramatically but we service many of the same financial markets and participants.
Since 2002 the Financial Services Commission of the British Virgin Islands (the BVI FSC) has served as our financial services regulator. It is an autonomous regulatory authority responsible for the
regulation, supervision, and inspection of all financial services in, and from within, the BVI. The financial services it regulates include insurance, banking, fiduciary services, trustee business, company management business, investment business and insolvency services, as well as the registration of companies, limited partnerships and intellectual property. As regulator its responsibilities extend to promoting public understanding of the financial system and its products, policing the perimeter of regulated activity, reducing financial crime, and preventing market abuse.
The BVI FSC’s mission is to uphold the integrity of the BVI as a well-regulated international finance centre (IFC) and to safeguard the economic interests of the BVI by:
• protecting the interests of the general public and market participants;
• ensuring industry compliance with the highest international regulatory standards and best business practices; and
• ensuring that the BVI plays its part in the fight against illicit cross-border practices.
The BVI FSC regulates the industry in which I and many other persons are employed; an industry that remains the major contributor of BVI GDP. No longer a toddler or a teenage adolescent, but rather now a mature twentysomething adult, let’s consider how it has done, what it could have done differently, what it could improve, what have been its major challenges, whether it has been and is necessary and whether its value is (mis) understood?
The short answer is that the BVI financial services industry could not and does not exist without the BVI FSC. So yes: it was, is and always will be, necessary. Fact.
Have industry participants at times rolled their eyes in exasperation during the last 20 years? Of course: ultimately, we are all fallible. Find me a child or a parent that has not rolled their eyes at each other over the course of two decades; it’s a similar thing.
The BVI FSC’s core duties (per its website) are described below. Let’s kick the tyres: Protect consumers by ensuring that all firms and individuals authorised to provide financial services in and from within the BVI are competent and financially sound.
Despite various shocks to business the vast majority of BVI financial services providers
have remained solvent and competent. Admittedly, some that may have been lagging have been acquired by stronger participants or ceased to carry on business. Police the perimeter of regulated activities and instigate and pursue enforcement actions against any individual or business that violates BVI financial services laws.
Given the BVI’s standing as an IFC and how it is used to facilitate business globally, it is vital to understand the susceptibility and risk of BVI business companies and other legal persons and arrangements being misused for illicit purposes.
The BVI FSC is a founding member of the Caribbean Financial Action Task Force and was an early adopter of anti-money laundering laws that aligned with the recommendations of the Financial Action Task Force.
The BVI’s anti-money laundering laws provide a far higher and more robust perimeter fence than found in many other ‘on-shore’ jurisdictions.
Monitor and detect financial crime and assist in the prosecution of such crime.
Not something easily assessed given the cross border nature of financial services and that the financial crime will almost always be committed outside of the BVI. While admittedly not inviting the media to trawl thorough private records, the BVI FSC was an early adopter of information exchange with other regulators to aid the prosecution of financial crime in justifiable circumstances.
Sustain domestic and international confidence in the BVI financial services industry and contribute to the industry’s growth and development.
Numerous economic studies by leading economic think tanks have demonstrated the BVI’s contribution to the global economy. It’s not myth or fiction; its fact.
It is that contribution and reputation that has sustained local and international confidence despite the Panama Papers, Paradise Papers, Pandora Papers and various black and grey listings and media propaganda.
Ensure a fit and proper regulatory environment in which financial institutions provide quality products and services for the economic benefit of the BVI.
BVI financial services are the major contributor to the BVI’s GDP. The BVI FSC’s fit and proper regulatory environment has not only economically benefitted the BVI but the global economy too.
Improve public understanding of the benefits and risks associated with financial products.
A BVI entity will most often be involved in a multi-national or multi-jurisdictional transaction or cross border activity. As such, it is a combined effort with those other relevant jurisdictions that must be considered when assessing how well the public end-user is being informed and protected. If, for example, fund interests in a BVI company are being offered in another jurisdiction, that jurisdiction’s laws must necessarily be responsible for the education and protection of its own public in the same way as the BVI’s Securities and Investment Business Act together with the BVI FSC seeks to educate and protect the BVI public, should fund interests be offered in the BVI to the BVI public.
Consult with the industry and government on financial services legislation, regulations, supervisory policy and practices.
There are many benefits to Tortola being a small and lightly populated island; one of which is that dialogue and consultation between the BVI FSC, industry and government is unavoidable. This has recently been further entrenched with the new financial services ministry within the BVI government.
Provide a system of continuing education for financial service practitioners.
The BVI FSC hosts regular ‘Meet the Regulator’ forums to address and discuss topical matters and legal developments and publishes materials ranging from alerts, newsletters, guidance and consultative documents to details of enforcement actions, annual reports and quarterly statistical bulletins.
Monitor the effectiveness of financial services legislation.
The Company Law Review Advisory Committee was established to continuously review the BVI Business Companies Act (BCA) and any other enactments relating to BVI company law and to recommend changes or reform to the BVI FSC. The members of that committee reflect a cross section of representatives from within the BVI financial services industry and relevant public sector agencies with knowledge and
The BVI FSC regulates the industry in which I and many other persons are employed; an industry that remains the major contributor of BVI GDP. No longer a toddler or a teenage adolescent, but rather now a mature twentysomething adult, let’s consider how it has done, what it could have done differently, what it could improve, what have been its major challenges, whether it has been and is necessary and whether its value is (mis)understood?
experience of company law.
Regular updates to the BVI’s financial services legislation have occurred. Admittedly, there could and should have been more. But the reason there weren’t more frequent updates is perhaps more concerned with the legislative amendment process than willingness to entertain legislative innovation and nimble reform. A piece meal line by line amendment process utilised by an already overburdened Attorney General’s office is a process in dire need of revision and easily revised. Technology has long since delivered the necessary tools. Track change and document comparison applications massively enhance the revision process in addition to producing a user friendly consolidated and restated form of legislation inclusive of all amendments.
Facilitate innovation in financial services.
The BCA remains one the most progressive pieces of corporate legislation in the world. At times, it was
perhaps too progressive for some of its participants; some hard lessons learned as a result.
A native South African, I moved from London to the BVI in July 2006 and by December of that year the BVI FSC implemented the first phase of the BVI Virtual Integrated Registry and Regulatory General Information Network (VIRRGIN), a state-of-theart electronic filing system for the BVI Registry of Corporate Affairs. It was an ambitious play given network capacity at the time.
Three realisations are always close to mind whenever I think of or utilise VIRRGIN:
• During September 2017 mother nature unleashed two major category five hurricanes upon the BVI resulting in unprecedented destruction of property and business disruption. VIRRGIN did not skip a beat and we later learned that an important cross-border merger transaction had been filed and successfully registered during the
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To the point.
carnage of the storm. Electronically stored records with redundancy safeguards ensured that no vital corporate records were destroyed by the storms.
• When the global economy was forced into COVID isolation and others were frantically trying to figure out how to maintain business functionality, VIRRGIN did not skip a beat.
• Why are other leading financial centres still not embracing electronic filing and transaction processes? Many of whom have adopted aggressive carbon emission reduction policies while at the same time endorsing filing processes that require ribbon decorated pieces of paper to traverse the globe in airplanes. Its daft.
In June 2020 the BVI FSC created a regulatory sandbox which is a live and contained environment in which sandbox participants may test their products or services in relation to the provision of financial services business. This encourages innovation within the BVI’s financial services sector on a risk managed basis. The sandbox allows participants to introduce and test innovative financial services products and services in a defined and controlled environment and enables legislation and regulation to be best shaped around such innovations.
In April 2021 introduced additional pieces of e-legislation. After 20 years of services, the 2001 Electronic Transactions Act was repealed and replaced with an updated version to better serve participants within the digital space including in relation to electronic contracts, secure electronic signatures and records and e-commerce service providers. The new Electronic Filings Act provides for the electronic filing of forms and documents with BVI public authorities (a catching up, if you will, of what VIRRGIN has been doing within the BVI Registry of Corporate Affairs since 2006). The Audio Visual Link (Amendment) Act provides the statutory framework that enables hearings of any civil or criminal proceedings in or before any court in the BVI, including appeals to such matters and proceedings, to be conducted through the use of audio visual technology during periods of defined emergency.
Take account of the international nature of financial regulation and the financial services business: this includes maintaining regular contact with foreign regulatory authorities.
The BVI FSC’s Handbook on International Cooperation and Information Exchange opens with the following quote made in
2000 by Kofi Anan (then UN Secretary General):
“If crime crosses all borders, so must law enforcement. If the rule of law is undermined not only in one country, but in many, then those who defend it cannot limit themselves to purely national means. If the enemies of progress and human rights seek to exploit the openness and opportunities of globalisation for their purposes, then we must exploit those very same factors to defend human rights, and defeat the forces of crime, corruption, and trafficking in human beings.”
Much media coverage has been given to describing the BVI as a “tax haven” purportedly hiding bad actors under a cloak of secrecy because it has resisted public registers of beneficial ownership. Less media coverage has been afforded to explaining the difference between secrecy, privacy and confidentiality. Or how a leak or illegal theft of private information can radically increase risk of harm to persons, for example, through kidnapping. Or about the BVI’s long standing international cooperation with foreign regulatory authorities.
The BVI FSC and the BVI Financial Investigation Agency (BVI FIA) work together to regulate the BVI’s regime to combat the risks of money laundering, terrorist financing and proliferation financing. Their actions ensure compliance with international standards and assist in maintaining the BVI’s reputation as a leading IFC.
For over twenty-five years (since the enactment of the Criminal Justice (International Cooperation) Act, 1993) the BVI has been involved in international cooperation matters by providing mutual legal assistance upon request. The BVI has adopted and adheres to international standards and best-practice standards that promote international cooperation and international security in accordance with international agreements. This includes implementing measures that enable the BVI to meet its obligations to combat money laundering, terrorist financing and proliferation financing in line with the FATF Recommendations.
The BVI is not against the disclosure of private information like beneficial ownership of a BVI business company provided that the request for disclosure is made by a legitimate source and for a legitimate reason.
The following demonstrative case study is taken from the BVI’s 2022 proliferation
financing risk assessment:
“In March of 2021, the BVI FIA received a request for assistance from the UN Panel of Experts on the Democratic People’s Republic of Korea (North Korea) via the Office of the BVI Governor. The request sought information on several BVI Business Companies pertaining to their suspected involvement in several illicit ship-to-ship transfers, which resulted in refined petroleum deliveries to North Korea in violation of relevant UN sanctions which prohibit the supply of financial services, directly or indirectly to North Korea. Subsidiaries of the parent group, including several of the BVIBCs, were alleged to be directly involved in facilitating sanctions evading activities. As a result of inquiries conducted by the FIA, some 46 BVI Business Companies were found to be connected to the parent group. The BVI FIA assisted the UN Panel of Experts with information, including UBO, director, and shareholder information on all of the mentioned BVI Business Companies, which included nationals of Singapore, Taiwan and China.”
Interestingly, on 22 November 2022, the European Court of Justice invalidated the provision of the European Union’s antimoney laundering directive requiring that information on the beneficial owners of corporate and other legal entities established in the European Union must be made accessible to the public. The ruling stated that public access to personal information constitutes a “serious interference with the fundamental rights to respect for private life and to the protection of personal data” which “is neither limited to what is strictly necessary nor proportionate to the objective pursued”.
Citizens and corporations in many jurisdictions in the western world are taxed more heavily now by their governments than at any time in history. Those same governments continue their zealous focus on destabilising offshore IFCs on the basis of an ill-informed belief that termination of offshore financial services will somehow cure their own fiscal and accountability shortcomings. It’s a distorted dream in desperate need of alarm clock intervention. That alarm clock remains our duty of continuing to educate the global public about the real value a well-regulated IFC like the BVI contributes to the global economy.
Good regulation by the BVI FSC is an essential part of the BVI’s financial services brand protection. BB
Caribbean interiors have always been a unique and alluring blend of elegance, charm, vibrant colour, and understated sophistication. The region is known for its diverse and unique architectural styles, inspired by a blend of indigenous, African, European, and wider cultural influences. While architectural styles vary across the islands, in recent years several trends are emerging, which have transformed the way homeowners design and decorate their homes. These trends reflect the growing attraction of the Caribbean to global travellers as well as the increased desire for relaxed comfort, calm, sustainability, and deep connections to the surrounding environment.
If you are living in the BVI, investing here, or visiting for a few weeks, you want a property that is high performing as well as being a nurturing and restorative space. As our environments are changing, we are using our homes in different ways and here in the BVI we have seen these transformations firsthand.
Extreme weather patterns and the global pandemic are rapidly redefining how we use our living spaces. Key features which are driving demand in real estate are about being fully selfcontained whilst at home. Multi-generational floor plans are now highly soughtafter, so grandparents and children can come together. In addition, having one or more bedrooms on the same level within the main living area is advantageous. Having multiple areas for seating and dining is also soughtafter, so larger groups can
have time alone as well as being together for meals and conversations. A home office has become a requirement rather than a luxury and you cannot omit this feature as you design and style your home.
Perhaps the most powerful trend however is incorporating wellness and wellbeing into our living spaces. Hot tubs have been a luxury for a few years, but these are now surpassed by the installation of ice baths. Home spas, once the reserve of the wealthy, are becoming more popular with a dedicated space at home to have massages and practice yoga and meditation. Creating calm and relaxing areas within the garden and grounds can add real value to your property; this might be a small studio in which to paint or a shaded seating area in which to relax and read. If there is room, installing a pickle ball court will elevate your property. Swimming pools have always had appeal, but the trend now is for smaller pools with soft natural finishes that feel like a natural part of the landscape.
The joy of property hunting in the BVI is that no two homes are the same. Many properties have been owner-built and
designed and have been much loved family homes. Each has a different story to tell – part of what makes living and investing here so special - but it is also important to reflect demand for contemporary and calming features. There are some simple things that can be done to refresh and upgrade your home. Current trends that add style and appeal include the following:
While vibrant tropical colours have been a staple of Caribbean decor, there is now a gentle shift towards more neutral coastal colour palettes. Soft whites, sandy beiges and muted pastels create a more serene atmosphere allowing the outdoor natural surroundings to take centre stage. Bolder colours, blues, greens and yellows, inspired by the views of sea, sky and flora are now reserved for accents, borders and artwork.
To create a soothing and inviting atmosphere, Caribbean villas are incorporating more natural textures. Woven rattan furniture, jute rugs, and seagrass light fixtures introduce a tactile quality that complements the coastal environment and are in keeping with outside and inside living. You can create a timeless space with room to grow, while you curate and layer with accessories and collections. We often refer to these as ‘noble’ materials –natural stones, concrete, and timber. Materials that are time tested to be both resilient and elegant, and can serve as a natural, neutral background to the rest of the architecture.
The Caribbean is known for its temperate year-round weather and after the global lock down, having a home that offers both indoor and outdoor living, has become even more attractive. Many villas now feature open-air living spaces, blurring the lines between interior and exterior. Large windows, sliding glass doors, and outdoor lounges make the most of the breathtaking views and sea breezes. Often in our designs, we assume the outdoor living space will be equal to that of the indoor living spaces.
Steven Townsend of Montgomery + Townsend Architecture and Design shares that several of their boutique firm’s BVI projects celebrate the best in design and the latest trends: “Constellations at Oil Nut Bay is a fitting example of this. Large floor to ceiling doors open up to the views and finishes are natural stones and wood to ensure that the villa glides easily into the hillside. There are multiple outdoor seating areas and a central deck with a fire pit that overlooks the ocean.”
Other examples can be seen in Trunk Bay, on Tortola’s north shore - a relatively new residential development and where many of the homes are truly innovative. White Cedar, elevated high above the sandy beach, highlights the very best of Caribbean charm and contemporary finishes with large outdoor covered and uncovered decks, neutral shades, high quality fixtures and multiple areas for living and working all surrounded by beautiful flowers and fruit trees.
One significant trend in Caribbean villa decor is the use of sustainable materials. As environmental consciousness grows, many villa owners and designers are opting for eco-friendly choices. As with soft furnishings, hard finishes such as reclaimed wood, bamboo and recycled materials are also being utilised in the building of homes. These choices not only reduce the environmental footprint but also add a rustic, natural element to the decor. We also see sustainability in terms of longevity. While a stone and concrete building may not be traditionally sustainable, these materials will extend the lifespan of a building, effectively making the project more sustainable over time.
Another trend in Caribbean design is the concept of indoor-outdoor bathrooms. These luxurious spaces often feature open air showers, free standing bathtubs in lush tropical gardens, and panoramic views. It’s an indulgent way to immerse yourself in the natural beauty of the Caribbean. However, being outdoors is not for everyone, so it is great to be able to offer an indoor alternative for those less adventurous or when the weather is not cooperating.
Nostalgia for the glamour of the mid-20th century is evident in some Caribbean villa decor. Vintage and retro elements, like mid-century modern furniture and classic Caribbean prints, add a touch of timeless style to interiors. Blending mid-century with modern day luxury is extremely popular - the key being to keep everything in one overall colour palette. A combination of rustic elements and sophistication is a recurring theme. Rough-hewn wooden beams, stone accents and wrought iron fixtures provide a sense of authenticity, while plush furnishings and high-end finishes ensure a feeling of opulence.
Modern technology is more and more seamlessly integrated into Caribbean villa design, offering guests and owners alike the convenience of smart home systems. From lighting and climate control to entertainment, security and online connectivity, these smart features enhance the overall living experience and convenience for the multigenerational guest.
Caribbean villa design is also embracing minimalism, with a focus on decluttered spaces that emphasise simplicity and functionality. This design approach can have several psychological benefits, including creating a sense of order and clarity which decreases stress and anxiety and while promoting calm and relaxation. Minimalism in design additionally creates the feeling of spaciousness which innately makes one feel more at ease.
In the post-Irma environment, the emphasis is now understandably on durable, resilient exterior products. Most projects now utilise hurricane rated glazing for the openings, but often will further protect these openings by adding an extra layer of hurricane fabric. Aside from the danger of hurricanes, we emphasise resilient products just for day to day living in the Caribbean – durable materials such as Ipe, cypress, stainless steel, brass, and stone that will hold up to the harsh marine environment.
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For the homeowner hoping to maximise appeal, this can all feel overwhelming. There are however some extremely easy “fixes” that can make a substantial impact, as well as a team of seasoned professionals to guide you on your way.
As well as running a thriving retail store, Fran Morell and her team at House also work on a consultancy basis to help clients to maximise their homes. Simple upgrades like painting interior walls a soft neutral colour, streamlining the furnishings to a solid base colour with statement cushions, and creating an ambience with lighting and luxurious bed linens can go a long way.
A recent makeover of a property in Little Bay on Tortola’s north shore is a wonderful example of the impact a few changes can have. This three-bedroom property boasts breathtaking views and is just a moments’ drive from an unspoiled beach. The owner, Saundra Perry, had been away for several years and on return realised that her home, now fifteen years old, could do with some updating. After working with House, Saundra shared that “the changes have been fantastic, I love coming home now. Everything has been done beautifully and within budget and we are now marketing a property for sale that is appealing to both BVI and international buyers.”
Another House client shared that “after changing the interiors of my properties, I achieved full occupancy at higher rental rates. Renters are well travelled and want the latest trends and I am delighted to be able to offer this to them.”
If you are thinking about purchasing a homesite and building, investing in a turn-key home, or looking for a renovation project, the BVI has something that will work for you. Lucienne Smith from Red Coral Properties loves the moment her client finds the right property. “It is like being there when someone falls in love and that is wonderful to witness”’ she says. “The whole does not have to be perfect, but there has to be something that just fits. Once you find that everything else follows. Whether it is the design and finish of the kitchen, the tranquility of the outdoor decks or being able to imagine large family lunches around the dining table, once you find that, the rest will evolve to make it the perfect home. The great thing about the BVI is there is something for everyone.”
As one of the world’s most beautiful destinations, with a wide range of investment opportunities, and talented professionals on hand to help, your Caribbean home can be everything you dreamed it could be. BB
The last six years have witnessed what we believe to be the most trying times for the tourism and hospitality sector in the BVI since its inception in the early 1960s, defined by the trend-setting investment by Laurance Rockefeller in what became and today remains the globally iconic Rosewood Little Dix Bay. Ironically, these six years and counting were immediately preceded by a period of unprecedented growth in the tourism sector. A period that saw the territory achieving an all-time high for visitor arrivals - well north of 1 million, including for the first time 400k + overnight arrivals in 2016. It was a high-water mark for the destination.
While 2017 had all the hallmarks of upstaging 2016’s groundbreaking performance, this all changed dramatically in September when instead, the year entered the history books as the start of a most trying period for BVI tourism. A period defined by: natural disasters - the hurricanes, a pandemic of Biblical proportions, a global economic shutdown followed by an anaemic recovery with inflation rates that looked much like those
of the 1970s, supply chains entering the local and global lexicon, numerous ill-informed sector-changing policy decisions at the local governmental level, the absence of new investment in the sector and a period when the global travel and hospitality sector was hobbled by an inability to attract talent at all levels. And sourcing hospitality talent is now an acute strategic challenge for the BVI.
For some insight into the challenges facing this lead sector of our economy, in January, Business BVI interrogated a trio of managers who recently assumed leadership positions at three of the destination’s frontline properties: Edward Linsley of Bitter End Yacht Club; Alejandro Chometowski of Virgin Gorda Yacht Harbour and Sandra Grisham-Clothier of Scrub Island Resort and Marina. Sandra graciously hosted our meet-up at Scrub’s Marina Cay for a wide-ranging conversation about the current state of tourism locally, the trends shaping the global luxury travel sector, deploying a more technology-infused marketing strategy, what the BVI must do to remain competitive and why as a destination we must become obsessed.
Russell Harrigan: Now that you’ve gotten past the festive season, how are things going?
Sandra Grisham-Clothier: From Scrub’s perspective, we’re excited — we’re getting more repeat guests who haven’t been back since 2017. Some didn’t come back because they saw a lot of damage and they found other destinations, but they’re coming back again. We’re also seeing more and more mega yachts. I’ve seen a lot of group activity, which is very exciting for us because we have a lot of banquet space; I have ten back-to-back weeks of groups this next year — I have more on the books now than this same window last year.
Russell Harrigan: What size are the groups generally?
Sandra Grisham-Clothier: They’re manageable — about 50 percent of the hotel. Which is perfect. It’s not a complete buyout.
Russell Harrigan: Alejandro, how are you doing?
Alejandro Chometowski: For me, it’s all learning because it’s my first winter season in the BVI. It was a bit slow in December, but now it’s picking up tremendously. We’re starting to see cruise ships passengers, private yachts coming into the [Yacht Harbour], going around the channel here, and it seems that it’s going to be very interesting; a lot of people are telling me that everything is increasing little by little. Since this is probably the second complete year after the pandemic, we are having full capacity, and I found a lot of customers that are [returnees].
Edward Linsley: Bitter End 2.0 is back really strong and, for us, it’s so generational. We’ve had an amazing amount of people coming back who love to tell stories about it. “It’s so great to be back; please thank the family for continuing this wonderful resort and the rebuild and reinvestment into the community and into the property.” Like [my colleagues], lots of mega yachts, lots of sailing yachts, and I just love hearing stories from people that say they’ve been coming since they were kids and just have been watching the redevelopment and they’re so happy that we’re back. We are very fortunate to have the amount of business we have in the North Sound right now.
Russell Harrigan: Both you (Edward) and Sandra are no strangers obviously to the BVI. I’m keen to understand what drew
“The visitor experience must be guest-centric.”
you back for another tour of duty? You could have gone to somewhere else — why the BVI?
Edward Linsley: Look, this place has been in my heart from the day I arrived. When I left, it was a sad day and there was a video released of me leaving on a plane, just flying over — an amazing video that I watched again the other day and I still come to tears. As I kept in touch with people around the territory, they would never say, “when are you coming back?” They would say to me, “when are you coming home?” Literally, that was the term used when I would talk to people that grew up here, or people that have lived here for many, many years. When I flew back, I flew into Virgin Gorda Airport because it was my home for all those years and even at Customs and Immigration, they said, “Welcome home.” I was born in the US but this was home for me for so many years — it was just a natural progression of my life in coming home to the British Virgin Islands.
Russell Harrigan: When did you leave?
Edward Linsley: Sadly, a few months just before Irma in 2017, and it was heartbreaking because I watched all of it. To come back and be part of a really special family resort and be part of the rebuild is just so special for me.
Russell Harrigan: Sandra?
Sandra Grisham-Clothier: Well, mine has a little romance in it because I met my husband here. I fell in love with the BVI, and my husband. Everything I own is here, so it’s home. I would say that feeling started about 2002. I had so many friends here and we always felt comfortable. And you can’t deny how beautiful the BVI is.
Edward Linsley: It is a special place.
Sandra Grisham-Clothier: You know, we can all complain about a lot of things, but at the end of the day, we have so much
here, and we’ve come so far. It’s too slow for some people’s liking, but at least we’re not taking a lot of wrong turns.
Edward Linsley: You just said something that brought a memory to me, I’ve been fortunate to sail or to visit over 30 Caribbean Islands, some countries up and down the Windward and Leeward Islands. When you go somewhere else [other than the BVI], you’re on one island — you’re stuck on another island. [BVI] has this infrastructure of islands with restaurants and tourism on every island; you can’t beat that.
Sandra Grisham-Clothier: And it’s safe. I still don’t lock my door to my house. It is safe. We are fortunate.
Russell Harrigan: Alejandro, this is your first rodeo. If there was one factor that drew you to the BVI what was that?
Alejandro Chometowski: Well, I have a friend of mine who’s been coming to the BVI for 20 years, and we were always curious to come here. We’ve been to the Caribbean, but we never reached this part. A few years ago, we realised that we’re done with the growing up of our kids and all that —so we said, ‘okay, now we can choose an opportunity to travel and experience new challenges, new places.’ So, we decided to come here, and I want to take [Mr. Linsley’s] words, because my wife flew back to Buenos Aires for two months. One thing she wrote before taking the plane was: It’s my first time that I am saying ‘I’m going back home — from home.’ So, in this very short time that we are here, we have found that people are very welcoming. Everybody really makes you feel like part of the community.
Russell Harrigan: I think one of the BVI’s advantages is the diversity of things you can do here as a visitor. How do you think this diversity of assets positions the destination in the post pandemic marketplace?
Sandra Grisham-Clothier: I think that’s one of our best strengths. How we communicate those strengths and how we get them out in the marketplace is another thing. To me, it’s technology; we’ve got to start using and infusing more technology into our marketing stratgy. We’ve got to start looking at trends. ‘What are our arrivals and departures saying?’
Edward Linsley: And feeding that information back into our marketing strategy.
Sandra Grisham-Clothier: Absolutely. And be proactive — we’ve got to be more proactive. We can’t just look to next month. We should already be looking at next Christmas, next New Year’s Eve. We have to be looking eight, nine months ahead, or we won’t progress. And then for [Scrub Island], we need to know what the destinations plans are at the national level, so we can jump onboard and support those initiatives in the marketplace.
Edward Linsley: The private/corporate, and government relationship can, and should be, expanded upon. I have worked in a couple of Caribbean destinations. We have something about feeling safe in our islands and walking around and being able to feel comfortable. I worked in another regional island destination, a well-known island, where it was one tower after another, after another, after another. Their half mile beach, like we have here, was strewn with thousands of hotel rooms. We don’t have that. We go after the luxury segment of the market. We have this openness. Combine that with safety makes the BVI a special location. And that’s what, that’s exactly what I meant. That’s what we have always sold.
Sandra Grisham-Clothier: That’s who we really are.
Edward Linsley: The strategy from both government and the private sector must be about getting that message out, and getting it out early. We should be talking about Christmas next year. We should be talking about Christmas the year after that. And what’s the plan? How can we, the hospitality professionals help government via a partnership build the BVI brand in our key markets?
Alejandro Chometowski: I believe that from the government side, we should work more on the environment; how to keep the islands clean, green and welcoming. Managing the waste that we produce in a way that BVI keeps forever in an environmentally healthy state or improves it. Obviously, compared to other regions, this is pure nature. It’s the motto, the slogan of our country in touristic terms, so we should have a big, big focus on taking care of our environment. It’s our jewel, our differential advantage.
Sandra Grisham-Clothier: That includes where the boats can pump out their wastewater and better manage waste oil.
Edward Linsley: Our goal is to get more business. With more business, there’s more waste, more pollution. We must have better solutions on how we deal
with that. So that we keep ‘Nature’s Little Secrets’ pristine. And we ensure that we protect why people come here for; diving and snorkelling and sailing in a clean environment.
Russell Harrigan: Why do you think we are not more proactive?
Sandra Grisham-Clothier: I just don’t think we’re looking far enough down the road. One of the things I’m proud of Scrub Island for doing is they are treating their water. So, all their wastewater goes into a sewage treatment plant, comes out the other end, you can water your plants. We don’t do that for the yachts as yet. I’ve been personally trying to figure out how I can standup a pump out station for all those yachts. We would love to do it. We’d love to see it being done in Tortola, Virgin Gorda and then when it comes to marketing, getting the word out. We must be looking that far down the road in everything that we do in tourism. We can’t just suddenly have a food festival and [give a month’s notice]. It does not give me enough time. Doesn’t give anyone enough time to market and get it out. It’s fun for all of us, but it’s not driving revenue to the territory. A successful marketing strategy is all about constantly planning.
Edward Linsley: I don’t know why government is not as proactive as you said yourself and I completely agree. When they attend yacht shows, you’re in the marketplace, you’re competing with people who are far more resourced financially than we are. So, you’ve always got to put your best foot forward, and you’ve got to be resolutely aggressive about it. You can’t be half stepping. I also know that some of those countries put more of a percentage of their revenue back towards tourism. They better understand and utilise the tourist dollar. Countries that have been super successful at that, they invest heavily in their tourism to bring those tourism dollars back in the future. I would ask, what is the percentage that we are willing to spend?
Sandra Grisham-Clothier: Look at the airport and the ferry dock for example. If we’re not doing a major innovation, something major, then let’s just fix what we have. We all know how to do that. Look at this. Look at this place (gesturing to Marina Cay). Half of this was built out of the wood left over from the hurricanes.
Edward Linsley: The private sector tends to think like that. Government as has a different mentality. So that’s why when we speak to government, as the leaders in tourism, we must constantly share our thinking from the hospitality industry. After all we are the people that live and breathe it every day and know what needs to be done. Because at the end of the day, government has responsibilities, but they are not on the ground feeling, meeting the guests on a daily basis hearing their concerns and issues.
Russell Harrigan: So how do you infuse that element fed back into the system?
Edward Linsley: I have been known for and I’ve said this to you over the years. We’re all in this together. We are truly all in this together. We are that small size nation and we are all in this together. You know, what happens in the place next to me, affects me. And what happens to the guys at Leverick Bay affects all of us even in the North Sound.
Russell Harrigan: If there was one thing each of you can put your finger on, in terms of what you think is the biggest challenge facing BVI’s tourism as we sit here, in the very early days of 2024, what would it be?
Sandra Grisham-Clothier: Probably airlift.
“A successful marketing strategy is all about planning and you’ve got to be resolutely aggressive about it.”
Alejandro Chometowski: I would say be careful with massive tourist numbers given the size and the market positioning of the destination. Just because I don’t think it’s what you want for the BVI in the longterm.
Edward Linsley: I only have one: efficient airlift. Combine that with efficient customs and immigration services. A smooth transition getting here. We need to make that a reality.
Russell Harrigan: If you were minister of tourism for a day, what big idea would you implement to enhance tourism?
Sandra Grisham-Clothier: We’re all struggling with filling open positions, including major positions. And I think rightfully we’re trying to hire local first. For me, when I can’t, then I’m trying to find a Caribbean national because then, at least culturally, they’ll fit in quicker and understand us better. But even that, it takes so long that by the time I get them, they don’t want the job anymore, they found the next job. It’s the same work permit process, and I’m not saying that labour’s slow, immigration’s slow — it’s the process. I understand the process, but it is handtying, sometimes, for us to move forward. And then we have a lot of third parties now — third parties that we’re all hiring to do work for us, and I’m not sure that they’re compensating their employees as well as they should be, so that’s bringing in a wage concern because then these persons are living in our community not making the wage they should make. So as minister I would streamline the work permit process, infuse some technology into it, which would in turn benefit the entire economy.
Edward Linsley: For me, it’s a longterm goal to have an in-depth, intensive hospitality education program, and we’re
not going to see the effects of that this year or next year, but we will five years down the road and go… but going back to Sandra’s point about thinking longterm, I agree. Look, I worked in an island nation where English wasn’t the first language, yet every person that worked for me spoke English perfectly because they had such an intensive education. They knew how to wait on a table. They knew how to cook. They had options to take management classes. It shouldn’t be just about cleaning a room or learning how to wait on a table, it should be how to be a successful, not only a manager, but a true leader. And we can do that. We have the ability, and we have facilities that we could use to create a really great hospitality program. Not something that’s an elective, that’s part of your education, but a true hospitality program. We will reap the fruits of that for years to come, but it’s going to take a big investment, both from private and government sectors. I’m telling you; it will pay off five years down the line. And from then on, 6 years, 10 years, 20, 50 years down the line, it will pay off for us. In the meantime, I agree; we don’t have enough people that still want to work in hospitality. If you do the math with all the jobs available in hospitality, you don’t have enough people from here that grow up here that want to be in hospitality. So, we have to have a better system to get people that want to come here. How do we get to the point where people say, ‘gosh, I want to go live and work in the BVI?’ At some point, we wean them off also as we start having people come into the system from here that have graduated in these great hospitality programs. I know it can be done, but it’s a long-term goal. As Sandra keeps saying, it’s all about thinking down the road. It’s not a quick fix today that you’re looking at, it’s going to take some time and then to your point, there must be a transition strategy in that interim period, because you still have to run the property. You still have manage tourism and you still have to run the country.
Alejandro Chometowski: One thing that I think is that [the government] should be more flexible on regulations for getting people to work. Because we all know that hospitality business is a lot of seasonal [work] and it gets so difficult to hire and get people. So, it seems like there are not enough people in the island and it’s very difficult to get people from outside. There should be some type of program for bringing seasonal employees in an easier way. I don’t mean that everybody needs to settle down here, but for the winter
season, everybody needs extra personnel and again, it’s planning; making sure that it happens in a timely way.
Edward Linsley: Imagine if we had base hospitality standards. Whether you’re at a local restaurant getting a piece of chicken, or a roti, or you’re at a luxury place spending a thousand dollars a night, imagine if we as a nation agreed that we would have a minimum standard for how to how we wait on the table, how to service a restaurant — and everybody agreed to that. So, the impact of just, again, it’s back to education.
Russell Harrigan: Because if we are a nation known for great service, that just brings more business and re-enforces the brand in the marketplace.
Edward Linsley: Right! Imagine, because what happens is people go, ‘Oh, I went there, the service was horrible, I went there, it was so expensive’ — to ‘I went there, the service was great.’ In tourism our messaging should be, you can go to the BVI, can get great service at any restaurant, anywhere. But that comes with having the right people, the right programs, and also allowing us to source outside talent when needed.
Alejandro Chometowski: Does government still think that the financial business is the main income?
Edward Linsley: In some ways, the structure still reflects that. They talk about pivoting, but you don’t just talk about pivoting, you have to pivot. You must put the structures in place, so that you can get the things done. I don’t think we’re there yet.
Sandra Grisham-Clothier: You know what you make me realise as we’re trying to look down the road; we have to fix things for ourselves as well as well as for our guests. You take Trellis Bay, for instance: the guests go and get on a ferry from that dock. And they stand around, okay, there’s one little bit of shade, or they stand under a tree. Unacceptable for a luxury destination.
Russell Harrigan: The BVI has traditionally positioned itself as a luxury destination in the global marketplace. How would you describe luxury today, in 2024?
Alejandro Chometowski: Today, luxury for me means personalisation.
Sandra Grisham-Clothier: It does not have to be white gloves. It just needs to be personalised.
“They talk about pivoting, but you don’t just talk about pivoting, you have to pivot.”
Alejandro Chometowski: Fulfilling your personal needs or wishes and getting it done. And from that point of view, I think that because of how the Virgin Islands are developed, you can get everything here. All your dreams can come true here.
Edward Linsley: But luxury now is unique experiences that are tailored to your individual needs, not the masses. That touch the spirit. That’s what people are looking for. They want somebody to take care of their individual needs because what I want in a hotel room and what I want sitting on the beach is very different, than the guy next to me. And we both paid a lot of money for that hotel room. And yet I want something that’s tailored to me and my family.
Russell Harrigan: If you were to put your finger on a couple of trends in the luxury travel space globally that we must pay close attention to as a destination, what would they be?
Sandra Grisham-Clothier: Culture and health. I think our guests are looking to come on holiday and go back feeling healthier — mentally and physically. It could be laying at the spa all day, or it could be hiking up the mountain. I think that’s a trend that I’m seeing.
Edward Linsley: Yeah, holistic, unique experiences that deal with wellness. Wellness just continues to grow, and it’s beyond the typical spa. Let me go in and get a traditional Swedish massage. Is it some sort of food trip that is matched with your wellness and the quality of food and kind of food that’s delivered to our table.
Alejandro Chometowski: I hear a lot that the typical overnight tourist here is someone who knows the place well because of the high repeat factor. So, how
can we attract new people to come up to the destination?
Sandra Grisham: And even keep their kids coming because they’re bringing their children. So, are we offering them what they want? It’s one of the reasons why when, you know, I’m in my 60s, first thing I thought was; this kind of water sports and that kind of water sports, because that’s what I know. But then I’m thinking, ‘what’s new? What’s trendy?
Alejandro Chometowski: And not all of us have a strong reference brand like Bitter End; that is like an icon of the global sailing community because it’s one of the main spots you must visit once in your life.
Sandra Grisham-Clothier: Even Bitter End has changed. They started off with little lasers and Hobie waves. Then they got getaways. You have to keep changing with the trends.
Edward Linsley: We have more coming. We’re building the program with new boats. Our water sports department continues to grow, to adapt to, you know, wings and e-foils and all these things that people want reflecting the new trends. And it’s not limited to our water sports, we are building our hotel rooms now and they will also respond to the market needs. There’re so many travel agents on TikTok now, and people I follow that I’ve known over the years, and I’m surprised; like I see them on TikTok, they’re naming the five best resorts in the Caribbean, ‘this is my five best resorts in Hawaii, this is my five best hotels in New York.’ These are travel agents that are now using TikTok, and we’ve got to listen to what they are hearing from their clientele.
Russell Harrigan: Let’s turn to the competition for a bit. At the regional level, what two or three destinations you would say are in the BVI’s competitive set?
Sandra Grisham-Clothier: Well, I think we lost some of our marketshare to the USVI particularly during the pandemic because it was too difficult to enter the BVI.
Alejandro Chometowski: Thinking on BVI, it brings me to think of Polynesia or some exotic places, at the global level.
Edward Linsley: So regionally, you have the bigger boys that spend a lot of money on tourism marketing such as the Turks and Caicos, Jamaica, Cayman. Nobody really knew Bequia and the Grenadines years ago. Then there was an article in
the New York Times about the lady that went down there, and now they’ve got the Bequia Hotel down there. And now you see on Instagram and TikTok, more and more about the Grenadines. This coupled with their new airport. So, the Grenadines is now on the map and they’re going to start moving up the food chain. Antigua’s always been known to have very strong air lift. But I would say that’s not our market. Even though they are big boys, people don’t want that. People want to come to what we have here. Airlift is key for us — it’s just key.
Alejandro Chometowski: Today if your are sailing from St. Thomas to Virgin Gorda you have to stop at West End for Customs. It does not make sense from a visitor standpoint. Tourism is all about the experience.
Sandra Grisham-Clothier: We saw quite a bit of frustrated guests over the festive holidays; with many complaining about the two, three hour waits they had to endure. My guests were not happy. And that’s how they arrived at Scrub. So I have a hurdle to address, you know, the first impressions were bad.
Edward Linsley: We should not have closed that welcome booth in St. Thomas. That was a disaster, it was ill informed and does not reflect the level of customer experience expected by our guests.
Russell Harrigan: Our research has shown that the booking patterns have returned to their pre-pandemic pattern of booking earlier. Is that the case?
Edward Linsley: When I look at last year’s numbers, there was clearly a lot of pent-up demand. People were like, ‘I have to get back, I have to get back,’ so they came back. Now, we’re starting to see a bit of normalising. I naturally talk to a lot of the charter companies; they’re seeing a softening of some of the future business. But I would say there’s also lastminute fill that you can’t always predict, is happening. You know, I will tell you, even the day before New Year’s, we had one of our busiest days of all time. We weren’t really expecting it. There’s this seven-year trend that I used to find in hotels on most islands, depending on when Christmas and New Year’s falls.
Sandra Grisham-Clothier: Booking trends are short and long term. We are still have quite a bit of short terms. I mean, even this past holiday season, I had some major players trying to book very late. So,
I’m expecting it for next year as well, and we have to stay agile.
Edward Linsley: Remember there was a time where you wouldn’t take the shortterm business because you were so full already.
Sandra Grisham-Clothier: It used to be that people stayed seven to fourteen nights in a resort. Now it’s five, six, because I have guests who are in the hotel, and then on ‘X’ day, their mega yacht comes to pick them up, and then they’re on a mega yacht for a week. That’s what we’re seeing.
Edward Linsley: We must look at it in a holistic way. Yes, they move from you and go to the mega yacht, but we’ll get our revenues from them on the boat. Those mega yachts, if they’re not happy, guess what the owner says? ‘Take me to St. Barths. Take me to St. Martin.’ If they have a mechanical, I can’t get what I need. It’s about service. I mean, I used to say to the custom guys, if the damn boats want you to board them three miles from here, before they come, charge them a fee for it. They can pay for it — they’re not going to grumble. For them it’s about service.
Alejandro Chometowski: For me, the American Eagle flights mean accessibility. This make the islands closer and more accessible for tourists.
Edward Linsley: I think direct flights are a huge thing and I think if we don’t support it, it’s going to go away. Airlines, they are mad scientists when it comes to efficiency of what’s called load factor and maximisation of revenue. And if they’re not doing it, and if we don’t support it, they take it away. We need it to be successful, so other airlines go, ‘Oh, this is working out for them ‘I need to start coming.’ And another company says, ‘I need to start going there. Because American’s planes are full all the time.’ Now I know there are issues; but we need to support them.
Sandra Grisham-Clothier: Right now, travel times through St. Thomas can be up to one and a half days.
Edward Linsley: The millennials are not putting up with it. That’s another thing with them; they’re making decisions to go away for two or three or four days — they’re not going to spend a fourth of it trying to get anywhere.
Russell Harrigan: All three of you are in the marine space. Are there some things that we need to be doing as a destination?
Alejandro Chometowski: I hear it’s very difficult going through Customs with all the paperwork you must do. How can we streamline the process while still achieving what Customs requires. The experience must be guest centric.
Edward Linsley: In business, you don’t want to give people a choice to go to your competitors. We, in essence, give them a choice because we made it so hard. Other places said, ‘Oh, just come here and just fill this out electronically.’ You don’t want to give people a choice or an option to go to your competitor. And we are doing that.
Sandra Grisham-Clothier: You talk to any yachtsman, they love the fact that they can go pretty much anywhere in the BVI and they can grab a mooring ball. For me, being an environmentalist, it’s helping us. We’ve been the lead, so we should brag about that.
Edward Linsley: They are well maintained mooring balls also, which is important. Also to Sandra’s point about bragging, people feel secure here.
Russell Harrigan: We have entered 2024 with the US and British elections taking place later this year. The economy in the US seems to be doing relatively well, but a lot of economies elsewhere are having real challenges. Should we be worried?
Sandra Grisham-Clothier: The ongoing wars and what’s going to happen in the US presidential election will have an impact on us.
Edward Linsley: Yeah, we actually talked about it during our budget process. When it’s a US election year, the effects trickle down here — it absolutely does. This one is going to be a tricky one.
Alejandro Chometowski: I have faith that no matter what is going on globally or in the marketplace if we keep the BVI as an attractive and sought after destination, visitors will keep coming no matter what happens. I believe that we shouldn’t be frustrated with what’s going on in the rest of the world — we should focus on what we are doing, both at the governmental level and at the private sector level. There must be a partnership. We must be nimble, competitive and reflect the needs of our visitors and the trends shaping those needs and we will survive and prosper. It’s all about the experience. BB
The rise of AI in travel: Efficiency, profitability, and the best trips of a lifetime are all possible at once! If we do things right...by Gilad Berenstein
In recent years, the term “AI” has been echoing across industries, captivating our imagination and instilling a mix of excitement and apprehension. From boardrooms to coffee shops, to philosophy departments, conversations about artificial intelligence have surged; often accompanied by sensationalised claims of AI taking over the world and summoning demons, or bringing about the utopian dream for which we have all been waiting. I hope it is not too shocking, that neither of these sensationalised claims are accurate, nor helpful when building a business strategy or thinking about the impact on one’s own life.
To properly understand this new phenomenon, we need to start by separating the science fiction from the actual science. And to do that, we need to understand why this sudden surge of interest in AI came about, why now, and what todays AI really is. I come to this topic with a mix of practical, theoretical, and academic experience. At the core I am an AI Startup Entrepreneur turned AI Venture Investor, but my AI roots go way back. Back to my childhood in Israel, where my dad was an early practitioner of AI in the early 90s. Since those days, I have been fascinated by the prospects of AI. I was also fortunate to spend some time at the Allen Institute for Artificial Intelligence, the world’s largest non-profit AI research institute, where I saw first hand a large team of researchers and developers working on AI for the common good. With their help, I cemented my view of a future where AI lifts all boats, if we can just play our cards right.
The idea of artificial intelligence is by no means new, It has captured our collective imagination for at least six decades, gradually evolving from sci-fi musings to lab experiments and research projects, until December of 2022, when it left the lab and entered the real world with force.
The answer to the obvious first question, “Why Now?”, is simple. The timing is not due to some new AI theory or computational breakthrough, but rather to the twin engines of data availability and blazing fast computing power, available through the cloud.
As a tech entrepreneur, I’ve witnessed the astonishing growth of cloud computing, providing super-fast computational resources at an unprecedented scale. This paradigm shift has paved the way for the reimagining of decades old AI techniques, including Back Propagation, which is the technique behind ChatGPT and all of its compatriots. What was a theoretical concept for decades, is now the cornerstone of cutting-edge AI, enabling the development of the groundbreaking applications and products we’ve witnessed over the past year.
Moreover, the business landscape itself has evolved, creating an ecosystem where efficiency (due to labor shortages and data availability) and personalisation (which is quickly becoming a universal consumer expectation) are paramount. AI has emerged as a potent tool to address these demands, driving investments and startup formation, while also catalysing widespread enterprise and consumer adoption. And unlike previous technological revolutions, the hardware required for AI is already largely deployed across the world. This reduces the capital expenditures required and thus further accelerates AI’s integration into our businesses and lives.
Today, and for the foreseeable future, AI is just a tool used by people to accomplish their goals. It’s that simple. A tool that’s quite good with numbers, data, and predictions, but just a tool. Thus, all of our hopes and fears need to be couched in the reality that it is not AI itself, but rather human desires that we should be excited by and fearful of.
Further, the enchanting realm of Generative AI that has captivated us all is, at its core, just a set of Probabilistic Models (algorithms) working at lightning speed, making guesses based on probability. AI lacks consciousness and sentience, existing
solely to predict the next word or image we want to see. It’s essential to recognise that AI’s power lies in its capability to augment human potential and facilitate decisionmaking, not to supplant our humanity.
AI’s potential to impact society and business is immense, regardless of its conscious state. The deliberations and concerns around AI ethics, accountability, and impact on human life are paramount and timely, irrespective of its subjective awareness. Said plainly, we don’t have to fear AI coming ‘alive’ for us to have real concerns about its development.
Guiding businesses large and small through the labyrinth of AI adoption, I’ve often turned to what I call the Vitamin, Painkiller, Viagra Method. This approach encourages companies to start small, using AI as a ‘vitamin’ to enhance their operations subtly. By incrementally integrating AI into non-critical functions (think internal communications, note taking, and data analysis), organisations cultivate expertise that lays the foundation for AI to be utilised as a ‘painkiller’. This transition entails addressing significant challenges and transforming AI from a peripheral tool into a central force, driving core operations. By using AI as a ‘vitamin’, you and your organisation develop internal expertise that enable you to use it as a ‘painkiller’ on serious problems within your business. And it is these additional skills and knowledge gained at the ‘painkiller’ stage, that enable your business to truly innovate and to use AI to create brand new capabilities your business was previously unable to achieve.
In the realm of travel, AI’s transformative potential is undeniable. From recommendation engines shaping dream vacations, to AI-powered travel assistants catering to every traveler’s need, the possibilities are boundless. Imagine a seamless interaction between a hotel’s AI front desk and a traveler’s AI assistant, orchestrating the perfect stay down to the smallest detail; like my preference for chocolate over a bottle of wine and my daughter’s need for a humidifier in the room. From the perfect activity recommendation for a guest, to AI generated micro-trainings for your staff based on their individual needs, to AI monitors that ensure cleanliness and safety;
with time AI will be utilised across your organisation and the sector.
AI isn’t merely reshaping the travel industry; it’s enabling whole new business models (AI Travel Agencies, GPT OTAs, new personalisation models, automated revenue management, etc.) and augmenting existing ones, enriching the human connection at the heart of travel.
When asked about AI, I like to share that soon it will be irresponsible for you to take your child to see a doctor who does not utilise a modern AI assistant to find the latest research and data pertaining to your child’s health, preconditions, and needs. It will be foolish to trust your savings to a financial advisor, without an AI assistant to help you reach your financial dreams and it will be unwise to retain an attorney who has to read case law by hand, limiting her ability to find the most relevant case law for your specific fact pattern. And yes, it will also not be optimal to use a travel advisor, or engage with a hospitality brand that does not utilise AI to optimise and personalise your trip.
One area that particularly excites me, is AI’s capacity to tell stories on an unprecedented scale, personalised for each unique viewer. Story telling is at the heart of travel, marketing, of education, and is at the core of the human experience. AI will enable us to tell more stories, in new ways, and personalise them for maximum impact. Yet, this prospect is accompanied by a dose of trepidation. The other side of that coin, is the ability to disseminate misinformation at a scale which underscores the need for responsible AI deployment and vigilant oversight.
To win the new AI frontier, companies and other organisations must consider how to utilise this technology while erecting protective moats for their businesses. One effective strategy is the training of proprietary Large Language Model (LLM) or enhancing existing models. This investment maximises the ROI on your data and can yield multifaceted returns, both internally and externally, enhancing communication, analysis, decision-making, customer service, and more.
As a tech entrepreneur, I advocate for a culture of experimentation. The pursuit of an error-proof, multi-year AI strategy is premature. Instead, organisations should embrace a culture of play, test, iterate, and
learn. This approach not only fosters a deeper understanding of AI’s potential, but also nurtures a resilient environment for innovation.
AI has the capacity to forge a more humancentric future for our industry and world. As technology drives us forward, the true Holy Grail remains using AI to craft experiences that resonate on a profoundly human level. In a world where efficiency and personalisation coalesce, AI can propel us towards an era where industry serves as a conduit for life enhancing experiences and everlasting memories.
If you’re too busy to read my thoughts, here is what ChatGPT had to say on the topic.
My Prompt: In 200 words or less, what should I tell an audience of business leaders from the travel and financial industries about the impact of artificial intelligence on their businesses?
AI Generated Response: Ladies and gentlemen, the convergence of artificial intelligence (AI) and the travel and financial industries presents an unparalleled opportunity for transformation. AI has already begun reshaping these sectors, streamlining processes, enhancing customer experiences, and driving innovation. In the travel industry, AIpowered recommendation systems personalise travel plans, while predictive analytics optimise pricing and demand forecasting. Embracing AI can lead to improved operational efficiency, reduced costs, and heightened customer satisfaction.
Likewise, the financial industry is experiencing a seismic shift with AI. Fraud detection and risk assessment have become more sophisticated, bolstering security and trust. AI-driven algorithms analyse market trends, aiding investment decisions. Automation accelerates customer service, and chatbots handle routine inquiries. However, these advancements also raise ethical considerations, such as data privacy and job displacement. Striking a balance between innovation and responsibility is key.
In conclusion, AI isn’t just a technological evolution—it’s a catalyst for reimagining business models and strategies. Embrace AI as an ally to harness its potential, drive growth, and remain competitive in this dynamic landscape. Adaptation, innovation, and ethical considerations will define the success of our journey into the AI era. BB
With the pandemic now in the rear-view mirror, the headlines of summer 2023 were dominated by climate change (record temperatures, tragic fires and flooding depending on geographical location), on-going geo-political uncertainty (the Ukraine war, as of Oct 7 the Israel - Hamas War and tensions with China) and continued questions over the health of the global economy. The British Virgin Islands held well-contested general elections last April resulting in the Virgin Islands Party winning six seats and eventually securing the election when the opposition failed to form a coalition government. At a time when voting rights are under threat in so many countries, and with less than 50% of the world’s population living in a “democracy” (source: The Economist Intelligence Unit), international observers reporting on the election concluded “that the British Virgin Islands Election Day was orderly, peaceful and well-run, voting on Advance Polling Day proceeded smoothly, and that the legal framework in place offers a sound basis for democratic elections.” It is a credit to the BVI, and in particular to the Office of the Supervisor of Elections and the many volunteers, that the international observers were able to report so positively.
While many economists predicted that the major global economies would have faced a recession in 2023, the turmoil of 2022 from Russia’s war in Ukraine and the impact of rising inflation certainly slowed economic growth. Central banks persisted with tight monetary policy, targeting inflation by raising interest rates. The US Federal Reserve (The Fed) raised rates in late July 2023 to a range between 5.25% to 5.5%. With inflation in the United States easing to 3% for the year in June 2023 (compared to 9% in June 2022), economic forecasters have now turned their attention to when interest rates will begin to fall. Intervention following the 2007 financial crash focused on QE (quantitative easing) which resulted in a slow economic recovery, whereas the fiscal stimulus during the pandemic, resulted in a far quicker rebound in the economy, one where supply chains could not keep pace resulting in inflationary trends.
While the global economy grew by 3.1% in 2022, despite head winds from increasing inflation and the shock of Russia’s invasion of Ukraine which impacted both energy and food costs, it was forecasted to be weaker in 2023 as growth slowed to 2.1% (source: World Bank “Global Economic Prospects”) before a predicted tepid recovery in 2024. The Fed has a stated objective of returning inflation in the USA to 2% which is unlikely until mid-2024, so interest rates are likely to remain at current levels for at least the next year while The Fed keeps an eagle eye on the longer-term inflationary trends. The banking sector stresses, while limited to more
specialist banks and with Governments quick to intervene, has not created a wider economic crisis, although crypto currency markets have been in turmoil particularly after the collapse of the FTX exchange in late 2022. Graph 1 shows the relationship between the average inflation rate in the Caribbean for select islands and the BVI from 2015 to 2023 and the changes to interest rates by The Fed over the same period. In China, the economy has slipped into deflation, with the world’s largest real estate company, Evergrande, filing for Chapter 11 protection in the US. Contrary to other major economies, China is reducing interest rates in order to boost economic growth, as the economy has struggled after the ending of the strict pandemic controls.
In the US all eyes are now focused on the 2024 Presidential election. While Donald Trump remains the Republican front runner, the number of indictments against him could interfere with his presidential campaign, if he receives the Republican Party nomination, although polls indicate that his popularity only increases amongst Republican voters each time he is cast against the “Establishment”. President Joe Biden will be looking for strong economic indicators in the run up to the election, particularly as his ability to pass legislation is hampered by Republican control of the House of Representatives. It is a given that the 2024 presidential election will be hotly contested, particularly as contentions from the last election are still being worked out. The result of the election could also disrupt geopolitics, as a Trump presidency would have significant implications not just for NATO and the continued support of Ukraine in the war against Russia, but also for the simmering relationships with China among others.
President Biden’s foreign policy for the next several months will no doubt be dominated by the tragic events in the Middle East and attempts to reset relationships with China. The Hamas attack on Israel on 7 October unleashed a ferocious response from Israel. While the reasons for this attack are being debated, and possibly linked to Iran’s opposition to the normalisation of diplomatic ties with Israel by major regional players including Saudi Arabia, the USA has led attempts to contain the conflict along with regional powers. This will be a major test for Biden.
The US-China mini-summit in mid-November represented a rapprochement following several years of deteriorating relations as China’s position on the world stage is established. Human rights, trade wars, intellectual property, election interference, geopolitical tensions in Southeast Asia (Taiwan and South China Seas) were all topics for discussion. Climate change issues and how to tackle fentanyl trafficking were both points for agreement while military communications set to resume. However, much remains on the table for further discussions and neither China nor America are likely to alter their current positions.
Across the Atlantic, the war in Ukraine has had a direct impact on the Eurozone, which had to quickly wean itself off an over reliance on Russia as a primary source of energy in the winter of 2022, avoiding energy shortages helped by an unusually warm winter. Strong labour markets helped the Eurozone avoid a recession in 2023 and although inflation has not fallen as fast as predicted and the economy has stagnated, signs are for the economy to start a slow recovery in the services sector while the manufacturing sector remains flat. (source: Deloitte Eurozone Economic Outlook June 2023). The UK economy has also been slow to see inflation fall, with Brexit limiting the Government’s options to react quickly to changing economic conditions. A labour crisis following the emergence from the pandemic was exacerbated by restrictions on foreign seasonal labour which was otherwise in plentiful supply
pre-Brexit. While rates in the UK, at 5%, are on par with the USA and likely to remain higher for longer while inflation remains elevated, January 2024 data showed that the inflation in the UK had dropped to a better than expected 3.9%. With the highest inflation rates in the G7 group, the UK has a lot of ground to cover before the economy is seen to have stabilised.
The Caribbean economy has generally fared well in the post pandemic environment, mainly due to the growth in regional tourism, as islands opened to travellers who were keen to take advantage of the end of restrictions. Stayover arrivals expanded by 76% in the region in 2022 achieving 84% of 2019 overnight arrival levels (source: UNWTO). Preliminary results for 2023 indicated that this upwards trend in tourist arrivals to the region continued through the end of the year. The importance of the US as the leading market for tourism in the Caribbean is reflected in the 2021 total tourist arrivals with 51.5% of all tourists emanating from the US. Visitor expenditure from all markets was about $37 billion in 2022. Six Caribbean destinations (USVI, Dominican Republic, St Martin, Turks & Caicos Islands, Puerto Rico and Curacao) all exceeded pre-pandemic tourist arrivals in 2022 (source: CTO/STR) and it is notable that five of the six destinations are located in the northern Caribbean, reflecting the importance of proximity and direct airlift to the USA.
Graph 2 shows the annual percentage change in overnight arrivals between 2016 and 2022 for the BVI compared to select Eastern Caribbean Island destinations (Anguilla, Antigua & Barbuda, Barbados, Cayman Islands, Dominica, St Kitts & Nevis, St Lucia and the USVI). The graph shows the impact of Hurricane Irma on the BVI in 2017 and 2018 (Anguilla and St Martin were also impacted), the rebound of tourism in 2019 before the pandemic closed boarders in 2020. While the BVI was slower to reopen than many islands in 2021, it has shown a substantial rebound in overnight visitors in 2022, albeit from a much lower base.
It has been at best a year of very mixed fortunes for the BVI, with the legacy of the 2021 Commission of Inquiry (COI) still headlining the news as recently as mid January 2024 as politicians aim to meet strict implementation deadlines. The April General Election certainly shifted focus as the most hotly contested election since 1999, when the current “at large” election system was first implemented and the NDP entered the political equation. The arrival of the American Eagle flight on 1 June, heralded the first direct flights to the American mainland since the short-lived BAe 146 flights in the 1980’s. As we move deeper into 2024 the new administration it is facing a serious challenge to address the many infrastructure issues that need to be fixed.
The 2023 general election, the first in the wake of the Commission of Inquiry and the arrest the year before of former Premier Fahie, was set up to be a tightly fought contest. With the VI Party fielding a full-strength team, the NDP and PVIM parties elected to run as separate parties, thus splitting the opposition vote. With a turnout of 57.5%, the at-large vote was won by the opposition with three seats (68% of the at-large vote) to one VIP seat (32% of the at-large vote). However, the VIP performed well in the districts, winning five of the nine seats. With a total of six seats, the VIP were unable to form a Government leaving the opposition parties, with seven seats, to agree on a coalition government. While discussions were on-going, elected at-large NDP representative Lorna Smith agreed to join with the VIP to form the Government, becoming Deputy Premier in the process. Post-election, the Government has created a new Ministry of Financial Services, Labour and Trade (Minister Hon. Lorna Smith) and a Ministry of Environment, Natural Resources and Climate Change which is one of three ministries under Premier Wheatley.
As it approaches its first anniversary, the new administration has a number of challenges on its hands. Not least is tackling the myriad serious outstanding infrastructure challenges facing the territory. The Governor has confirmed that the original post Hurricane Irma offer by the UK for a loan guarantee to assist the BVI with rebuilding is no longer available, although a new loan offer could be available if
the BVI government was able to meet certain requirements stating: “The UK government is happy to have discussions in this area should further borrowing be required. In particular, if there can be flexibility under the financial management protocols that can be agreed with detailed proposals made to the UK government, that can help to reduce the cost of borrowing for the BVI government.” The Premier has acknowledged the need to borrow to address the failing infrastructure and has previously suggested a resilience fund to attract foreign investors to make donations to the rebuilding of the BVI in return for tax breaks in their home countries. While it remains to be seen how the upgrading of the infrastructure will be funded, the state of infrastructure is viewed by local businesses as a major disincentive to private sector investment.
The Commission of Inquiry in 2021 provided a detailed look at how the BVI Government operates, with the report identifying fifty recommendations for the Government to address. While the UK Government decided against imposing direct rule on the BVI, the passing of an Order in Council (Privy Council), which would allow the UK to swiftly suspend the constitution and transfer powers to the Governor, has remained a point of contention with the Premier and BVI politicians. Following comments by the Governor on the possible need to explore “options for additional resources, powers and technical expertise to accelerate reforms”, the Premier reported the Governor to the United Nations Special Committee on Decolonisation stating : “I did place on the record my administration’s objection to the UK continuing to maintain an Order in Council in reserve, that can immediately suspend the constitution. It is not necessary. UK parliamentarians, CARICOM, OECS and the C-24 agree with our position. I also expressed our deep concern about recent statements by the Governor, regarding him potentially obtaining additional powers over the Virgin Islands. This also is not necessary.”
The causes for concerns by the Governor, have been laid out in each of the first four (to date) quarterly reports on the progress towards implementing the recommendations of the COI Report and in particular the slow pace of implementation in many areas. The
COI recommended that reviews be carried out into certain areas, with four of these reviews eventually being made public following pressure from the Governor prior to the election. He was also instrumental in the release of the Report on the Examination of the House of Assembly’s pandemic Assistance Grants, which was prepared by the Auditor General. While this report is still being absorbed by the public and reported on in the press, a number of politicians were quick to be critical of the findings.
In his preface to the third quarterly report, the Governor wrote : “I recognise that some of the initial deadlines in the Framework Agreement proved unrealistic and have had to be revised, but the deadlines need to remain ambitious and we cannot leave delivery to the last minute. Lord Goldsmith set out in his letter that reforms must have “taken root” no later than May 2024.”
With Governor John Rankin set to retire from the UK diplomatic service with the new Governor, Mr Daniel Pruce, set to replace him in later this month January 2024 as we go to press. In his final quarterly report, the Governor has stated that he will request additional temporary constitutional power to ensure the implementation of the outstanding COI recommendations. This announcement has set off a fierce condemnation of this request by the Government with the full support of the Opposition. With the BVI facing a number of important milestones, including the on-going constitutional review and an end date to the implementation of the main COI reforms, the on-going relationship between the UK and the BVI remains very much in focus.
While the general election was in full swing, the debate between those standing for election focused on the issues that mattered to the people of the BVI; infrastructure, education, cost of living crisis, health and the NHI, the post Irma/pandemic recovery to name but a few, there was also debate on the future of the BVI; independence and the relationship with the UK, the constitutional review, airlift and the expansion of the airport at Beef Island and how the economy will fare in a changing world. Now that the dust has settled, the new administration will need to focus on the many issues facing the Territory and develop a road map to demonstrate how these issues will be addressed.
The National Sustainable Development Plan (Vision 2036 : Building a Sustainable Virgin Islands) was published in March 2023 with the assistance from the United Nations Economic Commission for Latin America and the Caribbean (ECLAC). The roadmap is to develop
a plan for the Virgin Islands for the next fifteen years. The Preface to the report states: “The result has been a people centred achieved integrated roadmap based on a unique vision for the country. Some of the important issues discussed include providing opportunity for the youth; preserving the environment while developing the blue economy; managing diversity while maintaining customs and traditions; sustainable infrastructure given the ravages of recent hurricanes; restarting the economy given the climate risks and COVID 19; and the preparation and movement towards more autonomy and the implications of such governance advancements.”
At the launch of the Plan, the Premier stated: “I am highly confident that together we will realise our shared vision of transforming these islands into the economically, socially and environmentally balanced home that we desire and future generations deserve.” The press release noted that the National Sustainable Development Plan (NSDP) emphasises Good Governance; Economy; Infrastructure; Environment; Health and Wellness; and Education and learning, and it is directly aligned with the Sustainable Development Goals adopted in 2015 by the UN, whose agencies will be supporting these efforts. The implementation of the Plan will be facilitated by the Sustainable Development Goals National Coordinating Committee, (SDGNCC) that will be led by the Permanent Secretary in the Premier’s Office.
The Blue Economy for the BVI has been the focus of a UNDP (United Nations Development Programme) report entitled “Virgin Islands Strategic Blue Economy Roadmap 2020-2025” which “sets out an integrated approach to ocean based sustainable development, which brings together economy, environment and society, consistent with the Sustainable Development Agenda (2030), Aichi Target 11 of the Convention on Biological Diversity and the Paris Agreement on Climate Change (2015).” The report identifies six focus areas for the marine estate being enabling conditions; marine tourism; fisheries; aquaculture; marine information and science needs and new and emerging opportunities.
The Blue Economy is interpreted as maximising “the economic value of the marine environment in a sustainable manner, that preserves and protects the sea’s resources and ecosystems.” The BVI, in particular, has an economy that is reliant on industries that interact with the sea, from local fishermen to the charter industry, which is the backbone of overnight tourism in the destination. The report identifies that the BVI lacks a comprehensive strategy and framework at the national level. It aims to provide a framework for the Government to develop strategies and goals and provide effective co-ordination among the various Government agencies that are responsible for maritime and ocean affairs.
While the Government has put in place frameworks for the National Sustainable Development Plan and the Blue Economy, focus remains on the financial services sector and tourism, both of which are considered to be the twin pillars of the economy. Ever since the mid 1980’s, when the financial services sector expanded in the BVI, the industry has been the backbone of economy, regularly contributing around 60% towards total government revenues. However, the industry has faced external pressures particularly after the financial crisis in 2008, when developed economies endured a period of austerity with the focus on multi-nationals using no tax, or low tax ,financial centres to avoid paying higher corporate tax rates. This was compounded by a series of damaging data leaks (the Panama Papers 2016; Paradise Papers 2017 and Pandora Papers 2021) resulting in a move to improve transparency in financial centres.
Threats to Government revenues, generated by financial services were identified in the IMF’s 2010 report “British Virgin Islands:
Financial Sector Assessment Program Update— Financial System Stability Assessment.” One of the key findings of this report stated : “The heavy reliance on the financial services industry for revenue in the territory creates significant pressure on the FSC to continuously update and adopt regulatory practices that are credible internationally, as well as practical in the jurisdiction.” The report also noted that the BVI’s fiscal health was deteriorating and the economy had been in a deficit position for several years. The report stated that “generating revenue growth is the challenge of the future—it is clear that financial sector growth has slowed as the corporate registration business may have matured. Further growth in this sector must come from value-added services.” The report also noted that “the chief threat to the thriving offshore business is the loss of reputation internationally and the authorities are well attuned to this risk.”
After the report was released, the financial services sector experienced a sustained decline in the total number of companies incorporated in the BVI falling by approximately 22% between the end of 2011 and 2023. However, a fee increase in 2018 helped cushion the fall in Government revenues from financial services which increased to $232M in 2018, a 32% increase compared to 2017 and have remained above, or close to, $200M in the years since.
US$285,000,000
Graph 3 shows the relationship between new company incorporations in the BVI, the net direct revenue to Government from financial services and total Government revenues between 2016 and 2022. The data indicates that while the number of new incorporations has fluctuated, and total incorporations is gradually falling year on year, direct revenues generated by the financial services sector to the Government has remained steady, following the increase in fees in 2018.
As the second pillar of the economy, tourism is important more for the employment it provides (approximately 25% of the workforce) and contribution of approximately one third of the BVI’s GDP than it is to Government direct revenues (3% in 2019; source BVI Macro Fiscal Unit). The yachting sector contributed an estimated 52% of visitor expenditure in 2015 and provides many benefits to the BVI through the distribution of tourism throughout the islands. This sector of the industry was also the first to start operating again in the aftermath of Hurricane Irma in 2017, while land based tourism infrastructure took considerably longer to rebuild.
In early May 2023, the BVI Yachting, Hotel and Tourism Association was launched and in July organised three days of stakeholder meetings, inviting speakers to present and members of the public to attend. These stakeholder meetings were welcomed by the community and were an opportunity to give voice to the concerns that have impacted the tourism sector. As noted in the National Sustainable Development Plan “foreign direct investment in the VI has been sporadic and this is particularly evident in the tourism sector. Apart from recovery efforts new resort development has been slow, especially when compared to other competitors in the region. Any new trade and investment policies must balance the need for critical investment in the sector with preserving the uniqueness of the VI’s tourism product.”
The report continues : “The lack of Foreign Direct Investment (FDI) has limited the growth potential of the tourism industry. Room inventory for example is much lower than other competing jurisdictions, thereby limiting the ability to host major events such as conferences and sporting activities. Deteriorating public infrastructure including ports, roads, water transportation and water & sewerage has made it difficult to support the tourism industry to the standard that is expected from a luxury destination. Absence of a comprehensive long term tourism strategy to guide the development of the industry for the next 10 – 20 years could lead to an unstructured approach to its sustainability and growth.”
Tourism has shown a slow revival after the twin impacts of Hurricane Irma in 2017 and the pandemic which closed borders in 2020 although this improved in the 2022-23 high season. Graph 4 shows overnight and cruiseship arrivals (12 month moving average) from 2016 to May 2023 with the impacts of Hurricane Irma in 2017 and the pandemic shutdown in 2020-21. Comparing January to May arrivals between 2017 and 2023, the cruiseship industry has already recovered, with 7% more arrivals in 2023 compared to 2017. However, overnight arrivals still lag behind over the same period, down 37%, but have increased by 68% compared to the same period in 2022.
While the 2022/23 high season tourism traffic provided grounds for optimism that the industry is recovering, data indicates that overnight and day tripper tourism fell by 58% between 2016 and 2022 from 425,384 arrivals to 179,718 indicating that this sector has a long way to go before the then record arrivals of 2016 are again achieved.
Access remains a critical driver for the recovery of tourism. While significant political weight has been placed upon improving air travel to the BVI, arrivals by sea have traditionally accounted for around 80% of overnight arrivals until Hurricane Irma, as shown in Graph 5. By 2022 the number of overnight tourists arriving by sea had dropped to 63%. The destruction of the West End ferry terminal in Hurricane Irma, and the inability of the Government to rebuild it except with a temporary structure, has had a significant impact on the arrival of tourists by sea, with the terminal only opening back up to international ferry services in November 2022, albeit with a limited service.
Graph 6 illustrates the arrivals by port of entry on Tortola between Beef Island (air), Road Town and West End (both arrivals by sea mainly via ferry from St Thomas, but includes some individual vessels arriving in the BVI to clear customs and immigration). The West End ferry terminal accounted for over 40% of arrivals through the Tortola ports of entry between 2015 and 2017, but this share had fallen to 25% by 2022. It also accounted for around 30% of all arrivals prior to Hurricane Irma but 23% by 2022. The data indicates that the loss of tourist arrivals through West End as a port of entry has not been replaced by an increase in tourist arrivals through other ports of entry. Between 2016 and 2022, arrivals through the Terrance B Lettsome International Airport fell by 21%, Road Town ferry terminal by 27%, West End ferry terminal by 66%, Jost Van Dyke by 85% and all ports of entry on Virgin Gorda by a combined 93%.
While the arrival of the American Eagle flight direct from Miami has been a welcome breakthrough in travel to the BVI, with additional daily flights being added for the 2023/24 holiday season, the question remains about how the port infrastructure can be improved to encourage more arrivals. The Recovery and Development Agency (RDA) announced in May that bids for the reconstruction of the West End ferry terminal would be invited in July 2023 for the approximately $15 to $20M redevelopment project with bidders being pre-qualified. This is now going back out to pre-qualification, with
construction hoped to commence in early 2024. The Road Town ferry terminal is at full capacity for arrivals and while repairs are planned for the terminal, any redevelopment or expansion of the facility remains on the drawing board.
Discussions to extend the runway at Terrance B. Lettsome International Airport at Beef Island have been taking place since 2006, two years after completion of the existing runway extension. Successive administrations have tabled plans for the extension with a 7,200 ft runway along the existing alignment being the favoured option. The NDP progressed plans for the expansion after the 2011 election, eventually awarding a contract for the extension in December 2016 to a Chinese construction company. However, by early 2017, internal Government support for the airport expansion was in doubt, with the cost of the expansion raising doubts in the minds of some of the elected representatives. The VIP presented an alternative alignment for a new runway in 2020, although this alternative never progressed beyond the concept stage. The current administration has indicated that it also wishes to expand the runway and facilities although no concrete plans have been announced as yet. While formal plans have not been presented to the public, there have been suggestions a shorter runway in the 6,000 ft range would be less expensive to construct and therefore more likely to be developed.
In the interim, the Government is exploring additional options for direct flights to the mainland to increase airlift to the BVI. Whenever a decision is finally made regarding the airport expansion, the Government will also have to address how the development will be financed, a detail that has frustrated the airport expansion to date.
Taking a high-level view of the real estate market, there has been considerable activity in the market post Hurricane Irma and after pandemic, when the BVI Government provided a stamp duty waiver to Belongers acquiring property between May 2020 and December 2021, after which it was limited to first time Belonger purchasers. While it is a cause for celebration, that so many BV Islanders and Belongers have taken the opportunity to invest in real estate, it has been noticeable that there has not been a significant increase in foreign investment, in the BVI at a time when other Caribbean jurisdictions witnessed record real estate markets in 2021 and 2022.
As mentioned above, the National Sustainable Development Plan has commented on the general lack of direct foreign investment in the BVI, particularly in the tourism sector where new developments over the past 30 years have been very limited. With the Government facing an uncertain future with respect to revenues generated from the financial sector, it has to pivot to other sectors of the economy to fill any shortfall in revenues whether in tourism, construction or through stamp duty tax generation.
In the last edition of Outlook for the Real Estate Sector, we commented on the then Government’s interpretation of breaches of landholding licences, which resulted in substantial penalties being imposed on some vendors. This, along with delays in the processing of landholding licences, has created uncertainty in the market at a time when the real estate market in the United States is starting to contract. There have been several instances where purchasers have withdrawn from contracts to acquire property in the BVI as a result of these delays.
The new Ministry of Environment, Natural Resources and Climate Change has responsibility for the processing of non-Belonger landholding licences and we understand is looking into these issues with, hopefully, stakeholder meetings to obtain feedback from real estate and legal practitioners. While the slowdown in the processing
of landholding licences and new interpretations about breaches of landholding licences are certainly problematic and need to be addressed, the underlying reasons for a historic lack of foreign investment in the BVI, whether by developers looking to undertake new resort construction or by private investors seeking to acquire a home, need to be addressed. In a small island economy, it is natural for Government to impose restrictions on foreign investment, to ensure it is in line with policy and investment goals and the landholding licence system provides a very effective regulatory tool. However, the tendency has been to expand restrictive policies, which have discouraged inward investment in areas where the Government has a stated desire to see growth, such as the construction of additional hotel rooms and other visitor accommodations.
In previous editions of the Outlook for the Real Estate Sector, we have also summarised three acts which the Government has introduced : BVI Investment Act (2021), BVI Business Licence Act (still to be assented to) and the Trade Commission Act, which is now under review by the new minister of trade. While the policy for the BVI Investment Act has yet to be developed, and there remain unknowns particularly with the threshold of investment, this Act and the Business Licence Act could have a significant impact on the way investment is controlled in the BVI. At the mid year BVIYHTA stakeholder meetings, local businessman and property developer Colin O’Neal gave a presentation on developing in the BVI and a plea for a BVI trade and investment body to be established to encourage investment for both BV Islanders and foreign investors alike. We would certainly encourage the Government to revisit the Investment Act and Business Licence Act, both of which will be heavy on administration, unlikely in current form to provide new incentives for foreign investment, and support Mr. O’Neal’s call for a trade and investment body similar to those established elsewhere in the Caribbean.
Chart 1 provides an overview of all real estate transactions in the BVI which show how the market increased post Hurricane Irma in 2017, with the total number of transactions increasing by 98% between 2018 and 2021 before falling by 30% in 2022. This trend continued in 2023 with a total of 84 transactions recorded by June compared to 128 through June 2022, a fall of 34% in total transactions over this six month period.
The trend in the volume of sales measured by total dollar value followed a similar pattern, with sales increasing by 106% between 2018 and 2021, a reflection of the policy put in place by the Government to waive stamp duty for Belonger purchasers until the end of 2021. A fall of 23% in the volume of sales would have occurred in 2022 had it not been for a single land sale at Oil Nut Bay of $44.3M, which increased total volume of sales by 12% instead. Sales volume in 2023 in the first six months fell by 65% compared to 2022 although it included the single lot sale at Oil Nut Bay of $44.3M in May 2022. If that sale is excluded, total sales in the first six months of 2023 fell by 37%.
Chart 2 summarises the sale of land and homes in the BVI to Belongers and Non-Belongers between 2018 and June 2023. The data indicates that the market has been dominated by sales to Belongers and BVI Islanders, who have predominantly been purchasing land (70% of sales to Belongers) while sales to Non-Belongers have predominantly been of homes (65% of sales to Non-Belongers).
For the combined lot and home market, Belongers have accounted for 85% of all transactions between 2018 and June 2023 and 44% by sales volume ($). The lower share of sales volume ($) reflects the preponderance of lot sales to Belongers at a lower sales point and also the single lot sale at ONB at $44.3M, which significantly increased the total investment by Non-Belongers during this period. If this sale was excluded, Belongers would have 49% of the market by sales volume ($).
As with the total sales chart, the market peaked in 2021. Once the stamp duty waiver programme was terminated, except for first time Belonger purchasers, a 38% fall in transactions for Belongers between 2021 and 2022 was recordrd. In contrast, there was a
57% increase in sales to Non-Belongers in this period, reflecting the general improvement in market conditions elsewhere in the Caribbean, albeit the total number of sales to NonBelongers only increased from 23 sales in 2021 to 36 sales in 2022.
The direct impact of the real estate market to the Government is through the generation of stamp duty when property is sold. Current stamp duty rates are 4% of the sale price (or valuation whichever is the higher) for Belongers and 12% for Non-Belongers. Chart 3 summarises the average stamp duty per sale transaction for Belongers and Non-Belongers between 2018 and June 2023, on the basis that each transaction attracts stamp duty at the rates above (and ignoring the stamp duty waiver programme).
It is evident from the Chart, that the stamp duty generated by Non-Belongers at 12% is significantly higher than the stamp duty from Belongers at 4%. It is also because NonBelongers are predominantly acquiring homes with a higher selling point than lots which form the bulk of sales to Belongers. Analysis of the sales of lots and homes between 2018 to June 2023 shows that the average stamp duty generated per transaction to a Belonger is $9,260 per compared to $164,779 per transaction to a Non-Belonger.
Apart from the direct tax being generated through stamp duty, the real estate market has a number of positive indirect impacts on the economy, primarily through investment through construction, employment and generation of hotel accommodation tax on short term rentals. The villa market is also an important part of the tourism sector, providing an alternative to the expansion of hotel rooms, with each rental contributing to the circulation of money in the
economy through car rentals, restaurants and bars, supermarkets, booking of day excursions and other businesses associated with the tourism industry.
Tracking the location of property sales in the BVI indicates that the majority of both home and lot sales have occurred on Tortola, which has accounted for 73% of home sales and 85% of lot sales between 2018 and June 2023 as shown in Chart 5.
Chart 4 shows the distribution of home sales by price range between 2018 and June 2023. Over 80% of the market for homes in the BVI is dominated by sales under $1.0M while home sales over $2M account for just under 7% of the market. As we move away from the sale of damaged homes post Hurricane Irma, there should be evidence that the market for houses over $1.0M is starting to take a larger share. There were a total of 166 homes sold under $1.0M between 2018 and 2022 reducing to 121 between 2021 and June 2023.
Belongers acquired 81% of the homes sold under $1.0M and 40% of homes sold between $1.0M and $2.0M. They also accounted for 29% of sales over $2.0M, which demonstrates investment is made by local purchasers across all price ranges in the BVI, although the level of investment falls significantly between $1.0M to $1.5M.
While Non-Belongers only account for 27% of all homes sold in the BVI after 2018, they account for 71% of the home market over $2.0M. Given the number of homes on the market in the BVI over $2.0M, foreign investment is integral to the sale of higher end property market. The lack of foreign investment impacts the higher end market for homes, where properties tend to remain on the market for longer and there is a greater differential between original asking price and eventual sale price.
Virgin Gorda accounts for just 10% of lots sold over the same period but 22% of homes sold. The sister islands account for 5% of lot and homes sales between 2018 and June 2023. In contrast, the value of transactions indicates that Virgin Gorda accounts for 35% of total homes sales and 72% of total lot sales. Excluding the single lot sale of $44.3M at Oil Nut Bay, Virgin Gorda still accounts for 64% of total lot sales by value.
The data shows that Virgin Gorda remains a higher value market compared to Tortola. Excluding the single lot sale at Oil Nut Bay, the average lot sale on Virgin Gorda is $1.46M per transaction compared to $89,000 on Tortola. This reflects the sale of lots at developments including Moskito Island, Little Dix Bay as well as Oil Nut Bay which are all located within the Virgin Gorda market. Similarly, the sale of homes on Virgin Gorda averages $1.17M per transaction compared to $619,000 on Tortola.
Tracking property listings for homes within the BVI, provide sellers with a better understanding of the competitive set when considering placing their property on the market. Understanding how many properties are for sale within a particular price band and in which island locations, enables sellers to appreciate the choice that a purchaser may have when contemplating a purchase. Chart 6 shows the distribution of homes listed for sale in the BVI by price range and location.
As at June 2023, there are 179 homes for sale in the BVI, with 109 for sale on Tortola, 41 on Virgin Gorda and 29 on other islands. There is a marked difference between Tortola and Virgin Gorda in the distribution of listings between price bands. On Tortola 73% of all listings are below $2.0M compared to just 15% on Virgin Gorda, whereas 54% of listings on Virgin Gorda are over $3M compared to just 11% on Tortola.
Understanding the time properties remain on the market and the price differential between the listing price and the eventual sale price, also assists sellers when placing a property on the market. Unlike more active markets elsewhere in the Caribbean, the BVI consistently has a significant inventory of homes for sale and a relatively small pool of purchasers, which diminishes significantly at higher prices. We typically expect to see houses which are listed at higher prices remain longer on the market and to experience a larger differential between asking price and eventual sale price than homes listed for sale below $1M.
Chart 7 shows the differential between initial listing price and eventual sale price by price range for a selection of approximately sixty villas sold on Tortola and Virgin Gorda between 2021 and 2023.
What is evident from the data, is just 5% of all listings are for homes under $500,000, which indicate that there is limited inventory available for first time purchasers who may have limited capital and access to financing. The recently completed Joes Hill residential development project, undertaken by the BVI Social Security Board comprises 52 residential units which are aimed at first time purchasers who need to be BV Islanders or Belongers. With pricing starting at $275,900 for a one bedroom condo and ranging up to $625,000 for a three bedroom townhome, it was recently reported in the press that only four sales are currently proceeding within the development, with high purchasing costs and the inability to meet bank lending requirements being an impediment to some potential purchasers being able to proceed. The national budget estimates for 2024 included funding for the acquisition of this development by the government.
There is a similar pattern on both Tortola and Virgin Gorda where the differential between initial listing price and eventual sale price increases in higher price bands. In many instances, sellers will have reduced their listing price until it was more in line with market expectations. The average time for a home on the market in this data set on Tortola was 5.5 years, compared to 3.5 years on Virgin Gorda. As with the price differential data in Chart 7, the time on the market generally increased in higher price bands.
The data demonstrates that many sellers opt to list their properties at unrealistic asking prices before eventually reducing the price and finding a purchaser. This process can take a number of years before a seller eventually aligns with market expectations. Reducing the available inventory, by making the purchasing process quicker, and easier, for foreign investors to acquire property in the BVI will help to reduce the time it takes to sell property and reduce the differential between asking and eventual sale prices.
As we move into 2024, there is much to reflect on and to look forward to. While the BVI general election did not present the change in direction that many had expected, the election itself demonstrated what is best in the BVI; a population that is able to determine its political leaders through an undisputed democratic process, where those able to vote can do so without fear or favour. Now the dust has settled, politicians are engaging with the public to hear about concerns in the private sector. It remains to be seen what actions may be taken, but few dispute that the underlying infrastructure in the BVI urgently needs concentrated attention. BB
As an open economy, the BVI is very much impacted by the United States and other global economic forces. Higher material costs driven by record inflation rates, fears of a US economic recession, international conflicts, high insurance rates, and slowing post pandemic growth all contributed to stagnating construction home starts from Q1 of 2023. According to the IMF’s October 2023 World Economic Outlook report:
“The baseline forecast is for global growth forecasted to slow from 3.5 % in 2022 to 3.0% in 2023 and 2.9% in 2024, well below the historical (2000–19) average of 3.8%.
Advanced economies are expected to slow from 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024 as policy tightening starts to bite. Emerging markets and developing economies are projected to have a modest decline in growth from 4.1% in 2022 to 4.0% in both 2023 and 2024. Global inflation is forecast to decline steadily, from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024, due to tighter monetary policy aided by lower international commodity prices. Core inflation is generally projected to decline more gradually, and inflation is not expected to return to the target until 2025 in most cases.” This weak growth trend is the lowest since 2001, but the decline in global inflation is welcome news.
From a local standpoint, 2023 was a pivotal year. Elections were held for the first time in the post COI and post pandemic environment, with the incumbent Virgin Islands Party (VIP), led by Dr. The Honourable Natalio D. Wheatley, retaining the leadership of government. As the minister in charge of tourism, part of his remit is to encourage hotel development in the territory. The Premier has stated that he sees the role of the BVI Government to facilitate, streamline, and accommodate the construction sector to enhance business opportunities and employment.
The general outlook for 2024 for the construction sector in the BVI is one of slowed growth that reflects the impacts of outside forces such as higher interest rates, record insurance premiums, and tightening lending practices. By the end of Q4 of 2023, inflation levels saw noticeable reductions along with interest rates.
From the standpoint of impactful construction news, The Ministry of Communications and Works lists a number of new tenders expected to be released to local contractors: Projects ranging from interior fit-out work at the R.T. O’Neal Administration Complex, infrastructural works and the West End Ferry Terminal. These projects have been in the design phase for sometime, but 2024 is expected to finally usher in groundbreaking for many. On the private sector side, there are a few developments in the planning stages. The West End Marina has great potential for the territory and by extension hiring of several contractors. The YCCS Mega Yacht Marina in North Sound, Virgin Gorda which has been left vacant and partially damaged from the Hurricanes of 2017 and in a legal quagmire since, seems to be showing signs of life as the demand for the facility’s reopening have become louder.
As architecture, development, and construction firms prepare for 2024, most check in with the Town and Country Planning Department to determine the number of development applications on hand. In 2023, TCP processed 269 applications - 195 residential and 74 were non-residential. This is not necessarily on the face of it a good or bad thing. Another statistic of note is that there were 212 building permits issued - 162 residential and 50 non-residential. These are generally positive numbers even if just half of these permitted projects proceed into full construction, many local contractors and local hardware companies will be busy. Most applications are new, from the groundup residential projects and planners have seen an increase in multi-family units. This growth may be driven by the financing models that the banks require. The BVI’s primary pillars continue to be tourism and financial services, and with the increasing BVI population, the need for housing continues to grow. One-to-two-bedroom apartment units are seen as the most sought-after, and due to an oversupply, the territory’s rental rates have peaked; however, the demand continues to grow, albeit slower.
The North Sound of Virgin Gorda has been ground zero for successful resort developments for years. However, multiple completed commercial projects in the Valley on the southern end of the island have popped up and are catering to the increased economic activity. These projects tend to be mixed-use developments, including retail, restaurants, offices, and marine-related businesses. The recent upgrades at the Virgin Gorda Yacht Harbour - in the physical, human resources and marketing space has been most welcomed as that marina and boatyard repositions for 2024 and beyond.
The BVI needs outside investment. Opportunities exist for profitable development, but the consensus among developers is that the BVI is business unfriendly. Development agreements integral to financing are protracted processes that delay progress, thus frustrating investment. Developers/hotel operators by their very nature must be creative with financing models as regional banks continue tightening their lending practices and intentional de-risking policies.
As a comparison, we can look to the neighbouring US Virgin Islands for inspiration, a new reality. They have been able to carve out a significant space in hospitality and tourism over the last several years by offering attractive economic incentives. Strengthened by 15 direct daily flights, the neighbouring territory is now one of the fastest-growing tourist destinations regionlly. For them to have arrived in this strong position, they created an economic strategy and action plan, a “2040” plan. They also have a Hotel Development Program called the Hotel Development Act (HDA), which provides opportunities for financing new hotels and renovations.
“The Hotel Development Act (HDA) Program, also administered by the EDA, was initially passed in 2011 to provide a means for financing new hotel development projects (and hotels seeking substantial upgrades) in the USVI. In 2019, the HDA Program underwent a complete overhaul to promote the USVI tourism industry and provide for the planning, financing, reconstruction, renovation, and maintenance of new and existing hotels in the territory. Specifically, the programme was amended to provide for commercial and other hotel facilities’ development, construction, reconstruction and renovation. Now, the hotel room occupancy
tax (HROT) can be 100% utilised by developers of new hotels, or up to 50% of the HROT for existing hotels where at least 70% of the units were previously damaged – by hurricanes, for example – for the development, construction, reconstruction, and renovation of the facility. Additionally, the amendment provides an economic recovery fee (ERF) to finance, fund, or cover the costs incurred for renovation, reconstruction, construction, improvement, and development of hotel properties and related facilities or infrastructure.
The amount of the ERF is the difference between the percentage rate of hotel room occupancy tax applicable at the time of the application (currently set at 12.5%) and a percentage rate over such tax, not to exceed 7.5%, which is determined by the applicant and subject to implementation protocols. The ERF can be collected and deposited into an ERF trust account for 30 years and is only available to applicants applying before 31 December 2028. The developer can use any funds remaining after completion of the approved project for other expenditures for improving or enhancing the ERF project.” Source: Chambers & PARTNERS
For example, the recently completed Westin Hotel on Frenchman’s Reef was a 480-plus key hurricane-distressed property that Fortess, Inc. bought from Diamond Rock Hospitality. Millions in capital were injected into infrastructure by the USVI Government to assist with this re-development. Legislation like this and a commitment to attract investment is where the BVI must focus.
Locally, the Prospect Reef Resort, which continues to deteriorate in a post-hurricane state, presents investors with the most readily available development opportunity - local and foreign. I envision the ideal mix of a four-star, mixed-use branded lifestyle resort with 150 keys, a conference centre, multiple restaurants, pools, and branded residences. The all-inclusive model can be explored as well. Developers are constantly looking for unique projects to invest in.
The Caribbean hotel market has continued to blow away occupancy levels and ADR (average daily rate), with some islands seeing double-digit growth. As other regions have slowed in their pandemic recovery, the Caribbean continues to court US travellers, significantly leading to the current boom. The demand remains strong, with air arrivals approaching 2019 levels. Most industry professionals
point to 2019 as the region’s banner year. How does this translate to the BVI? The BVI is no different, at least in terms of deficient occupancy levels. There is an approximate three-thousand-room hotel key deficit. There are a few developments that are aligned with major hotel brands that are in the design and planning stages. Such projects will require professional contractors with sophisticated delivery systems, accountability and a strong labour force. With increased airlift capacity led by American Airlines direct flights from Miami, industry experts expect more hotel opportunities to materialise in the territory.
Long Bay Hotel, which partially reopened in 2023, and The Peter Island Resort recently announced their reopening plans for later in 2024 present the final resorts to reopen post the hurricanes of 2017, with the latter being much anticipated. One of the biggest differences one will notice at Peter Island is that all of the units are now on the beach.
The BVI’s average construction cost per square foot is a commonly asked question. Unfortunately, this number varies quite a bit depending on the sophistication and experience of the contractor, the design, site location, and current market trends. Other factors like interest rates, material pricing, and supply chain lead times impact the local construction market.
In the early stages of the design process, landowners seeking to build should understand what they can afford. This can be achieved by meeting with local banks and going through a high-level credit vetting process. I recommend hiring an experienced architect as a design guardian to ensure the best development decisions to stick within a budget. A budget should also reflect the current and average persquare-foot rates. According to the 20222023 Market Trend Report by BCQS, which details the Caribbean & Latin America Construction Markets, the British Virgin Islands residential market ranges between $160 on the modest quality side to - $590 on the high-quality side. At the early stages, a simple exercise can be done to determine a ballpark budget by multiplying your proposed home square footage by a number within the range listed above.
On the commercial side, for a 1-3 story structure with interior fit-out included, ranges from $360-$525. These ranges can vastly determine if a project moves out of the concept stage to construction documentation. The financing side of the
process is well aware of these figures and will want to see rental projections based on local forces.
An example of a recently completed and successful commercial development is JOMA Properties Cocoplum and Oleander Buildings in Port Purcell as part of their Waterfront Development. They projected having both buildings fully leased by the end of last year, with BVI Tourist Board occupying one floor.
As has been the case for decades, residential construction continues to be the dominant construction building type. Single-family homes, usually for first-time home builders, are the primary clients of contractors. With its lack of traditional hotel rooms, the BVI has always been driven by a strong villa rental market. For the past ten years, there has been an oversupply of villas on the market, leading to a gradual slowdown of the medium to higher end residential construction market. The oversupply is mostly a product of a protracted landholding license process that has derailed dozens of land transactions over the years. An overhaul and improvement in this process is quite advanced.
At the end of Q4 2023, the Ministry of Environment, Natural Resources, and Climate Change announced significant changes to the Non-Belongers’ landholding policy. In recent years, development stakeholders have languished due to the long timelines associated with getting a landholder’s license approved, where six months turned into ten months or longer. Land sales ground to a crawl as some buyers and sellers were frustrated and moved elsewhere to invest. With buyers and sellers walking away, this led to delays in government stamp duty collection,
realtor commissions, legal fees, architects and contractors getting involved in projects, and reduced investor confidence in the territory and market buzz for the destination. Industry stakeholders met with BVI Government officials to establish a workable way forward, eventually leading to revisions to the current legislation. Major takeaways include:
Increased “Development Period”
• The timeframe to complete the development increased to five (5) years with an option to grant an additional two (2) years upon request with the relevant application fee.
Forfeiture Proceedings
• The Governor can enforce forfeiture if developments have not been completed within seven (7) years.
Rental policy
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Clarification of Penalties
• We learned of a few landholding license holders who faced heavy fines for simple property adjustments after construction. These potential fines lead to many conversations with the MENRC and the eventual amendments.
Ultimately, will these much-needed changes reduce the timing of approvals?
The reality is that the sooner the approvals are granted, the faster the injection of capital can happen for BVI Government stamp duty and many construction and development-related businesses and the wider economy.
There are many challenges and opportunities available to local contractors.
According to the Department of Trade, Investment Promotion and Consumer Affairs, there are over 150 construction companies. This large number of firms creates an increased amount of competition. Most of these firms have a small workforce with a dedicated foreman, which limits their capacity to take on more than one project at a time and their cash flow and liability. The cost of doing business in the BVI presents an exercise in patience. Extended work permit processing delays are commonplace and provide operational challenges.
Opportunities available for contractors are capacity building from the many RDA and Caribbean Development Bank Tenders. Since 2017, contractors have learned how to submit successful tender responses. Collaboration between architects and or contractors is highly encouraged. The West End Ferry Terminal’s most recent tender saw five (5) joint ventures seeking to construct the facility. Increasing the potential for winning tenders based on the combined efforts of two firms is happening with more success and frequency.
Some more successful tendering contractors have increased their capacity by hiring quantity surveyors, project managers, and procurement experts. These skills are vital for medium to large firms seeking more extensive, complex, and paperwork-driven projects. A final opportunity to consider is for medium to large construction firms to open an office on Virgin Gorda to serve the needs of the growing population centred around tourism.
In closing we see 2024 as a year of slowed economic growth mixed with flattening interest and inflation levels. These factors will neither slow down or deter the usual and dominant single family home construction market, but they wont lead to an increase in them either. BB
The British Virgin Islands an archipelago of small islands and cays located a few miles east of the US Virgin Islands and about 95 km (59 miles) east of Puerto Rico. It is part of the Leeward Islands in the Lesser Antilles. The North Atlantic Ocean lies to the east of the islands, and the Caribbean Sea lies to the west.
Tortola where the main airport and the capital Road Town are located is the largest island. Other main islands include Virgin Gorda, Anegada, and Jost Van Dyke which can be accessed from Tortola by ferry, private boat and airplane (with the exception of Jost Van Dyke).
There are three main ways to get to the British Virgin Islands. The first is to fly directly to Beef Island Airport on Tortola (daily flights from Miami, Puerto Rico and other Caribbean Islands). The second is to fly to Cyril E. King airport in St Thomas in the US Virgin Islands (with direct connections from the mainland United States) and then take the ferry to Tortola. There are other connections from North America and Europe via regional and local airlines out of St. Maarten, Antigua and Barbados.
The BVI has an independent legal and judicial system based on a combination of English Common Law and local statutes, orders and civil procedure rules.
Lower level disputes and petty crimes are resolved in the Magistrates’ Court. More serious matters are dealt with in the Supreme Court (officially known as the Eastern Caribbean Supreme Court of which the BVI is a member state). Appeals from the Supreme Court lie to the Eastern Caribbean Court of Appeal and the final appeal lies to the Privy Council.
The British Virgin Islands hosts the Commercial Court of the East Caribbean Supreme Court which serves the expanding needs of commercial litigation in the Territory and the Eastern Caribbean. The court officially opened on 30th October, 2009 (although it was in operation since May 2009) and specialises exclusively in domestic and cross-border commercial and insolvency matters. It hears such matters from nine Caribbean nations and territories, including Anguilla, Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St Vincent, St Lucia and the BVI.
The BVI is a centre for the resolution of domestic and international disputes. The British Virgin Islands’ Arbitration Act 2013 came into force on October 1st, 2014 making provisions for a modern arbitration centre. The BVI International Arbitration Centre provides neutral, efficient and reliable dispute resolution services. The state-of-the-art facilities offers a variety rooms for hearings and meetings, video and audio conferencing, interpretation and translation services and concierge services.
The BVI is self-governing overseas Territory of the United Kingdom with the King as the Head of State represented locally by the Governor. The Governor is responsible for external affairs, defence and internal security, the Public Service and administration of the Courts. The ministerial system of government is led by an elected Premier, a Cabinet of Ministers and the House of Assembly. The Cabinet consists of the Premier, four other Ministers and Attorney General as an ex officio member. The Cabinet is responsible for formulating and implementing policy. The House of Assembly consists of 13 elected members of which nine are tied to electoral districts and four “at large” seats.
The BVI is self-governing overseas Territory of the United Kingdom with the Queen as the Head of State represented locally by the Governor. The Governor is responsible for external affairs, defence and internal security, the Public Service and administration of the Courts. The ministerial system of government is led by an elected Premier, a Cabinet of Ministers and the House of Assembly. The Cabinet consists of the Premier, four other Ministers and Attorney General as an ex officio member. The Cabinet is responsible for formulating and implementing policy. The House of Assembly consists of 13 elected members of which nine are tied to electoral districts and four “at large” seats.
The population of the British Virgin Islands is estimated at over 30,000 residents. The majority of persons are of Afro-Caribbean decent. Minority ethnicities include Caucasians, East Indians, Middle Eastern, and Asian. The major force driving population growth has been immigration mainly to meet the shortage in local labour supply. Approximately 70 percent of the employed are foreigners and the Government sector is the major employer followed by the tourism industry, the financial services sector and the construction sector. Labour relations in the BVI are governed by the Labour Code, 2010. This comprehensive piece of legislation provides for the framework for the settlement of disputes, health and welfare in the workplace, basic conditions of employment including pay, overtime, vacation and sick leave, benefits including the requirement retirement benefits. It also sets out the requirements for foreigner employment under the work permit regime.
Social Security is a compulsory insurance plan to which employers, employees, selfemployed and voluntary contributors contribute. Benefits are paid out when certain contingencies arise including sickness, maternity, and employment injury. An age benefit is paid out from 65 once the minimum contributions have been made (10 years). Trade unions are virtually non-existent and workdays lost through industrial action are infrequent. The government has set a minimum wage of $6 per hour.
New Year’s Day
Monday, 1st January
Anniversary of H. Lavity Stoutt’s Birthday Monday, 4th March
Good Friday
Easter Monday
Whit Monday
Sovereign’s Birthday
Virgin Islands Day
Emancipation Monday
Emancipation Tuesday
Emancipation Wednesday
Heroes’ and Forefathers Day
Commemoration of the Great March of 1949 and Restoration of the Legislative Council (TBD)
Christmas Day
Boxing Day
Friday, 29th March
Monday, 1st April
Monday, 20th May
Friday, 14th June (to be confirmed)
Monday, 1st July
Monday, 5th August
Tuesday, 6th August
Wednesday, 7th August
Monday, 21st October
Monday, 25th November
Wednesday, 25th December
Thursday, 26th December
The BVI economy is based on two distinct economic pillars, namely Tourism and Financial Services. Growth in the tourism and the financial services industries has resulted in expansion of the construction sector, both private (residential and commercial) and public, the real estate sector (residential and commercial) and the wholesale and retail sectors. The BVI’s economy is one of the strongest in the Caribbean.
The BVI’s principal trading partner is the United States. The majority of imported goods originate from the United States including Puerto Rico and the US Virgin Islands. The BVI is not a major exporter of goods but instead services in the form of tourism and financial services.
Publicly provided education is free at the primary, secondary and now territory levels thereby facilitating access to all children. Education is compulsory up to the age of 16 and the Education Act, 2004 regulates all aspects of the Territory’s education system including Early Childhood Education.
The Government’s Ministry of Education operates 17 primary schools and four secondary schools, including a technical-vocational school and a school for disabled students. There are also several private primary and secondary schools; some parochial and some secular. The H. Lavity Stoutt Community College (HLSCC) is a two-year tertiary institution offering associate degrees in the areas of business, natural science, social services, hospitality, computer studies, marine studies and financial services. Through affiliations with other tertiary institutions HLSCC also offers degree and master’s programmes in various disciplines. The College also offers specialty courses based on the needs of the local labour market.
Currently, primary health care is provided by Dr. D. Orlando Smith Hospital (formally the Peebles Hospital) and community health centres/clinics on Tortola and the outer islands – Virgin Gorda, Anegada and Jost Van Dyke. Access to full treatment at Dr. D. Orlando Smith Hospital from the outer islands can also be achieved when required via helicopter or ferry evacuation.
The new facilities of the Dr. D. Orlando Smith Hospital opened at the end of 2014 and offers apart from emergency care, haemodialysis, medical imaging, physiotherapy and laboratory services. Additional medical services as well as specialty treatments in dermatology, orthopaedics, plastic surgery, chiropractic care and dentistry are provided by a small private hospital and several private medical clinics. Patients requiring treatment services beyond the scope of the Dr. D. Orlando Smith Hospital are referred to Puerto Rico, the US Virgin Islands, Jamaica, Barbados and mainland United States.
The BVI Health Services Authority (BVIHSA) established under the BVI Health Services Authority Act, 2004 is responsible for managing the public health care service throughout the Territory including the general administration and functioning of the Dr. D. Orlando Smith Hospital and the recruitment and training of health care professionals. In September 2020, The BVIHSA achieved full accreditation with the accrediting body DNV-GL (Det Norske Veritas (Norway) and Germanischer Lloyd (Germany)).
The contributory National Health Insurance (NHI) Scheme provides universal affordable health care to all BVI residents.
With its crystal-clear waters and white sand beaches, breath-taking scenery, intricate coral formations, tranquil atmosphere and warm people the BVI is a popular destination for sports enthusiasts as well as those who want a peaceful vacation. The largest island Tortola is the major hub for most visitors and the starting point for discovering the other islands. Major attractions include the nature trails at Sage Mountain National Park on Tortola, the huge boulders at the Baths on Virgin Gorda, the pristine waters of White Bay on Jost Van Dyke, the wreck of the Rhone off Salt Island and the flamingos at Nutmeg Point on Anegada. Yearly scheduled activities which attract numerous visitors include: the Emancipation Festival in August, the Anegada Lobster Festival in November, and the BVI Spring Regatta in April.
Sailing is one of the most popular activities for tourists. The year-round trade winds and numerous islands, inlets and cays has given the BVI the title of the ‘sailing capital of the world’. Other water sports such as scuba diving, snorkelling, windsurfing, kite boarding, paddle boarding and kayaking are also extremely popular.
The BVI is also a popular port of call for major cruiseships. The Cyril B. Romney Tortola Pier Park opened in 2016 can accommodate larger cruiseships and the landside development includes shops (international brands and local treasures), restaurants and entertainment.
The Government and private sector continue to rebuild and upgrade tourist attractions and infrastructure post Hurricane Irma in 2017. Other infrastructural developments expected in the near future include upgrades to the T.B Lettsome International Airport and various ports of entry throughout the BVI.
Tourist arrival numbers were approaching pre-2017 levels at the end of 2019 with expectations for this upward trend to continue into 2020 and 2021. Unfortunately, the COVID-19 crisis has resulted in tourism numbers plummeting in 2020 and 2021. With the rebound of global travel tourism arrivals to the BVI have started to increase.
Marketing and promotion of the products and services of the financial services sector is conducted by the BVI Finance.
The Financial Investigation Agency (FIA) which was launched in 2004 functions as a specialist investigative law enforcement arm of the government with the objective of curbing financial crime. Its primary focus is to investigate the BVI financial services industry and support the Virgin Islands mutual legal assistance regimes.
The BVI London Office and the BVI House Asia in Hong Kong were commissioned to establish a presence in Europe and Asia to take advantage of economic opportunities not only limited to financial services and tourism.
The BVI is one of the largest centres for the incorporation of business companies with around 1 million companies incorporated since the enactment of the International Business Companies (IBC) Act in 1984. Over 360,000 are still active as of end of 2022. Because of the flexibility of its use BVI business companies have been used in a plethora of business transactions and structures including structured finance and securitisation, succession planning, IPOs and listings on stock exchanges and joint ventures etc. The incorporation regime has changed somewhat with the introduction of new company legislation – the BVI Business Companies Act, 2004 which replaced the IBC Act repealed on January 1 2007. The core features of the IBC Act which made it a success remain along with improvements to ensure the longevity of the Virgin Island’s market share. The new Act for instance widens the range of corporate vehicles available for use, simplifies the statement of capital and the registration of charges.
Effective January 2018 the incorporation fee and annual fee payable to maintain a standard company authorised to issue up to 50,000 shares increased from US$350 to US$450, and for a company authorised to issue more than 50,000 shares, from US$1,100 to US$1,200.
The BVI captive insurance market is one of the fastest growing and largest in the world with the majority of business originating from the United States. Other countries of origin include Guernsey, Taiwan, Switzerland, the Middle East and South America. In addition to this excellent geographic spread of business, there also has been a significant distribution of captives from an industry segment standpoint. The captives cover the following industries: finance and insurance, construction, health care and retail trade. The domestic insurance market is, however, smaller in comparison. The new Insurance Act, 2008 which replaced the 1994 provides a modern structure for licensing, supervision and administration of insurance business in the Virgin Islands while simultaneously meeting international insurance standards. The Insurance Regulations 2009 which replaced the 1995 regulations provides clarity on details relating to insurance business in and from within the BVI. Both came into force on February 1st, 2010. More recently the Insurance (Amendment) Act and Regulations 2015 provide greater flexibility for captive insurers with the introduction of two new categories for captive licences.
The growth of the financial services sector in the BVI was mainly due to the success of the International Business Company (IBC) (now known as the BVI Business Company subsequent to the enactment of new incorporation legislation – BVI Business Company Act, 2004) first unveiled 40 years ago in 1984. In later years the BVI secured business that was redirected from Panama during the Noriega regime and from Hong Kong when it was handed back to China in 1997. The Asian market thus accounts for a large portion of company incorporations in the BVI.
Modern and innovative legislation, a robust regulatory framework, clever marketing, economic and political stability, quality technology and communication facilities and a full range of legal, banking and account services have contributed significantly to the continued growth of incorporations. Closely related sectors such as captive insurance, investment business (mutual funds),
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The BVI is one of the premier jurisdictions for fund domiciliation and is now is regulated by the Securities and Investment Business Act (SIBA) and Regulations which came into force on 17th May, 2010 replacing the Mutual Funds Act 1996 (as amended 1997). SIBA sets out the new legislative framework under which the Financial Services Commission (FSC) regulates individuals, mutual funds and other investment related entities conducting business in and from within the BVI. Persons such as investment advisers, those dealing in investments or arranging dealings in investments, managers, custodians, those providing administration services with respect to investments, and operators of investment exchanges are now required to be licensed. SIBA introduces the authorised representative regime where all BVI funds are required to appoint an authorised representative resident in the BVI and licensed by the FSC. SIBA also provides a framework for dealing with insider trading and market abuses.
The BVI continues to update its regulatory regime to meet the needs of stakeholders. The Approved Managers Regime came into force the end of 2012 and creates a new regulatory environment for fund managers by reducing the regulatory burden under SIBA. The SIBA (Amendment), 2012 facilitates the new regulations for the Approved Managers Regime.
The most recent amendment to SIBA in 2019 and the corresponding regulations provide for the recognition and regulation of closed-ended funds by way of the Private Investment Fund. The new regime came into force on 31 December 2019.
Additionally, the FSC has created two new regulated fund categories – incubator fund and approved funds. They were created in order to provide more flexibility to smaller and start-up financial services businesses. Under the new fund categories, managers and principals of smaller, open-ended funds may be approved to conduct business within a lighter regulatory framework. The Securities and Investment Business (Incubator and Approved Funds) Regulations 2015 come into force on 1 June 2015.
The Virgin Islands is characterised as a conservative banking jurisdiction. At the end of 2022 there were 7 banking institutions licensed to operate in and from within the BVI with total assets of approximately US$2.8 billion. The domestic market is serviced by the following commercial banks which offer a wide range of competitive services: Republic Bank BVI Limited (formerly Scotia Bank (BVI) Limited), First Caribbean International Bank, First Bank Virgin Islands, Banco Popular de Puerto Rico, VP Bank (BVI), the National Bank of the Virgin Islands and the Bank of Asia. The banking sector is regulated by the Financial Services Commission under the Banking and Trust Companies Act, 1990 and subsequent amendments.
Financing and money services businesses also fall under the regulatory remit of the FSC. The Financing and Money Services Act (2009) sets up the licensing and regulatory framework governing local businesses in the BVI conducting consumer financing, lending, and money payments and transfers. Subsequent legislative amendments in 2018 broaden the reach of the regime by expanding the range of licenses offered and including for more sophisticated financing arrangements utilising FinTech.
In 2020 the Government instituted a levy on money services Class A licensees that is those businesses providing money transmission services outside of the Virgin Islands (excluding banks). The 7% withholding tax applies to the gross amount being transmitted as provided for in the Financial and Money Services (Amendment) Act (2020).
The Virgin Islands boasts a modern comprehensive insolvency regime that meets the needs of the growing incorporation, investment and financial services activities in the BVI. The governing legislation, the Insolvency Act 2003, makes provisions for the licensing and regulation of insolvency practitioners a wide range of liquidation and rehabilitation alternatives, a director’s disqualification regime and the establishment of an Official Receiver’s office.
Trust Management forms a major component of financial services activity in the Virgin Islands. Revised legislation, together with the highly flexible BVI Business Company, has opened up wider markets for the BVI trust.
Trusts are formed under the Trust Ordinance 1961 (based on the English Trustee Act 1925), as updated and amended by the Trustee Amendment Act 199 3 and 2003. The amendment Acts considerably modernise and update the legislation, creating a more flexible regime for trusts.
The Virgin Islands Special Trusts Act, 2003 (VISTA) is another piece of legislation which updated the trust regime. VISTA trust, overcomes many problems associated with the “prudent man of business rule”, which typically made trusts unattractive vehicles to hold assets which settlers intended trustees to retain. The Act enables a shareholder to establish a trust of his company which disengages the trustee from management responsibility and permits the company and its business to be retained as long as the directors see fit.
The majority of Virgin Island trusts are exempt from all taxes provided there are no beneficiaries resident in the BVI, and that the trust does not conduct any business in the BVI or own any land in the jurisdiction.
There is a large and sophisticated community of professional advisers on trust matters in the Virgin Islands. Companies offering trust services must be licensed under the Banks and Trust Companies Act, 1990.
The British Virgin Islands passed the Economic Substance (Companies and Limited Partnerships) Act, 2018, and the Economic Substance (Companies and Limited Partnerships) (Amendment) Act 2021 (the Substance Legislation) which addresses the European Union’s concerns about entities in financial services jurisdictions like the BVI over their ability to demonstrate “economic substance”.
The Act outlines which entities need to comply and what are their obligations. Entities that conduct ‘relevant activities’1 and ‘core income-generating activities’2 are subject to the ‘economic substance’ requirements. Relevant activities include: Banking business; Insurance business; Shipping business; Fund management business; Finance and leasing business; Headquarters business; Holding business; Intellectual property business; and Distribution and Service Centre Business.
Section 8 of the Act identifies further economic substance requirements. The Act also introduces additional reporting obligations to ascertain ongoing compliance. The BVI International Tax Authority (ITA) is the ‘competent authority’ under the Act and is responsible for enforcing the economic substance requirements. Entities must be able to show that they have an adequate level of employees and expenditure in the BVI and appropriate physical offices or premises for the core income generating activity.
The Rules (and Explanatory Notes) on Economic Substance which contains explicit information on how the economic substance requirements may be met and guidance on the interpretation of the legislation and the manner in which the ITA will carry out its obligations are now available. Additionally, the Economic Substance Portal went live on 12 June 2020 and facilitates the electronic filing of economic substance information by BVI registered agents on behalf of their clients.
The BVI’s commitment to business innovation progressed with the passing of the Financial Services (Regulatory Sandbox) Regulations, 2020. This provides the licensing, operational and regulatory environment to support innovative FinTech business initiatives. The Sandbox provides 2 clear benefits: allows FinTech businesses to test their innovations for a defined time period while permitting the FSC to access possible legal and regulatory structures that may be needed to support new financial service products. On 31 August 2020 eligible businesses could apply to the FSC for admission to the sandbox regime.
As the sailing capital of the Caribbean and an esteemed corporate domicile, the Virgin Islands is also a popular jurisdiction for the registration of ships. As a Category One Register, within the Red Ensign Group, large vessels of unlimited tonnage and mega yachts of up to 3,000 gross tons can be registered in the Territory. In both instances, the owners must be a Virgin Islands citizen, British citizen, British Overseas Territories Citizen, British subject, a British national under the Hong Kong Order 1986, a national of a European Union member state, or a body corporate incorporated in a member state of the European Union or a British possession, including the Virgin Islands. If you do not meet the nationality requirement, you may register a company in the Virgin Islands in order to register a vessel.
Registration procedure also requires the deregistration of the vessel from its current registry, a survey of the vessel and the submission of ownership documents to the Registrar of Shipping. The registration fee is $550, and an annual fee of $100 is payable to maintain registration. In addition, there will be legal fees charged by the firm you choose to assist you with registration.
A Tax Information Exchange Agreements (TIEAs) is a bilateral agreement that has been negotiated and signed between two countries to establish a formal regime for the exchange of information relating to civil and criminal tax matters. The purpose of TIEAs is to promote international co-operation in tax matters through exchange of information. TIEAs grew out of the work undertaken by the Organisation for Economic Cooperation and Development (OECD) to address the lack of effective exchange of information among financial centres. Information exchange is based on requests relating to specific criminal or civil tax matters that are under investigation.
The BVI has a long tradition of providing legal assistance to foreign regulatory and law enforcement authorities and continues to be committed to the OECD’s principles of transparency and effective exchange of information. Under the guidelines provided by the OECD and the new international tax standard emanating from the G-20 Summit in April 2009, jurisdictions are required to sign at least 12 TIEAs. To date the BVI has signed 28 TIEA’s.
The BVI has agreements with Ireland, the Netherlands, Curacao, St. Maarten, Aruba, the United States, the United Kingdom, Australia, New Zealand, France, the Faroe Islands, Greenland, China, India, Germany, Poland, Portugal, the Czech Republic, Guernsey, Isle of Man, Canada, Japan and South Korea and the Nordic group of countries Sweden, Norway, Finland, Denmark and Iceland.
1 Section 6, The British Virgin Islands passed the Economic Substance (Companies and Limited Partnerships) Act, 2018
2 Section 7, The British Virgin Islands passed the Economic Substance (Companies and Limited Partnerships) Act, 2018
The International Tax Authority (ITA), established under the Ministry of Finance, is the Competent Authority in respect of all matters relating to Tax Information exchange. It ensures that the BVI effectively exchanges tax information with other countries under the laws of the Virgin Islands and the relevant TIEAs.
For a deeper dive, also see the section on Real Estate - The Outlook for Real Estate, which is updated for each edition.
Buying and Selling Property in the BVI
Foreigners planning to purchase property in the British Virgin Islands require a Non-Belonger Land Holding License. Agreements to purchase property are therefore made contingent upon such a license being obtained by the purchaser.
Application for a Non-Belonger Land Holding License is made to the Government of the British Virgin Islands, Ministry of Environment, Natural Resources and Climate Change.
If the application for a license relates to undeveloped or partly developed land, the applicant will be required to make a commitment to the Government of the British Virgin Islands to expend a specified sum on development within a specified time period.
The purchase of property by all persons including citizens and foreigners is subject to a Government stamp duty subsequent to transference of the property. The rate of 12% of the purchase price or appraised value whichever is higher, is payable by any foreigner and citizens are required to pay a 4%. The stamp duty on leaseholds is lower. Other costs associated with the purchasing of property in the BVI include: legal fee (usually between 1.5% to 2% of the purchase price), bank fees, 10% deposit to the seller’s agent to be held in escrow on the signing of the purchase agreement, pending acceptance and completion.
There are no restrictions on an overseas investor reselling a developed property. The property must however, be advertised for four weeks in the local press to give any local person the opportunity to purchase the property on the same terms.
The Government introduced on 22 October 2020 the Financial Services Industry Expedited Work Permit Processing Initiative to assist in alleviating bottlenecks that existed as the BVI creates a more business friendly environment. The service is extended to businesses and their employees in the financial services industry including banks, auditing companies, insurance companies, registered agents, legal firms etc. Benefits include reduced processing timelines, online applications, remote payment of fees, and designated service for ancillary departments such as Immigration and Inland Revenue. An expedited fee of $150 is required in additional to the customary work permit processing charges. BB
Government Ministries and Departments
Website: www.bvi.gov.vg
Due to the commencement of repairs to the Central Administrative Complex Ministries and Departments have relocated throughout Road Town and its environs.
Premier’s Office
Cutlass Tower, 3rd Floor
Road Town, Tortola
Tel: (284) 468-2152
E-mail: premieroffice@gov.vg
Ministry of Finance
RFG Building
Francis Drake Highway, Tortola
Tel: (284) 468-2144
Fax: (284) 468-3299
Email: finance@gov.vg
Ministry of Health & Social Development
Voronica’s House of Commerce
Long Bush, Road Town, Tortola
Tel: (284) 468-2272/2174
E-mail: ministryofhealth@gov.vg
Ministry of Communication and Works
Manuel Reef, Pieces of Eight, Tortola
Tel: (284) 468-2183
Fax: (284) 468-3090
Email: mcw@gov.vg
Ministry of Environment, Natural Resources, and Climate Change
Pusser’s Building, 3rd Floor
Lower Estate, Tortola
Tel: (284) 468-2147
Email: nrl@gov.vg
Ministry of Education, Youth affairs, and Sports
Ward’s Building, 2nd Floor Road Town, Tortola
Tel: (284) 468-2151
Email: mec@gov.vg
Ministry of Financial Services, Labour, and Trade
265 Waterfront Drive
Road Town, Tortola
Tel: (284) 468-2152
Email: mfslt@gov.vg
Ministry of Tourism, Culture and Sustainable Development Cutlass Tower, 2nd Floor Road Town, Tortola
Tel: (284) 468-2161
Email: mtcsd@gov.vg
Immigration Department
RJT Edifice Building, 2nd Floor Wickham’s Cay 1, Tortola
Tel: (284) 468-4700
Fax: (284) 468-4729
E-mail: immigrationinfo@gov.vg
Labour Department
2nd Floor, Ashley Ritter Building Road Town, Tortola
Tel: (284) 468-4707/4780
Fax: (284) 468-2570
E-mail: labour@gov.vg
Statutory Bodies/ Associated Agencies
Financial Investigations Agency
Ritter House
Wickhams Cay II Road Town, Tortola
Tel: (284) 494-1335
Fax: (284) 494-1435
BVI Finance Cutlass Tower, 4th Floor Road Town, Tortola Tel: (284) 852-1957
E-mail: info@bvifinance.vg Website: www.bvifinance.vg
BVI Tourist Board 3rd Floor, Akara Building Road Town, Tortola Tel: (284) 852-6020
Fax: (284) 494-3866
E-mail: info@bvitourism.com Website: www.bvitourism.com
The BVI Commercial Court
Old Banco Popular Building Main Street Road Town, Tortola Tel: (284) 468-2724 Fax: (284) 468-2729 cdecsc@gov.vg
Financial Services Commission 18 Pasea Estate Road Town, Tortola Tel: (284) 494-1324/4190 Fax: (284) 494-5016
E-mail: commissioner@bvifsc.vg Website: www.bvifsc.vg
Telecommunications Regulatory Commission
27 Fish lock Road
LM Business Centre 3rd Floor Road Town, Tortola Tel: (284) 468-4165 Fax: (284) 494-6786
E-mail: contract@trc.vg Website: www.trc.vg
Virgin Islands Shipping Registry
Ground Floor Ritter House, Wickams Cay II Road Town, , Tortola Tel: (284) 468-9646/9499
Fax: (284) 468-2913
E-mail: vishipping.gov.vg Website: www.vishipping.gov.vg
BVI International Arbitration Centre Ritter House Wickhams Cay II Road Town, Tortola Tel: (284) 393-8000
E-mail: info@bviiac.org Website: www.bviiac.org
Government Overseas Offices
BVI London Office 15 Upper Grosvernor Street
London WIK 7PJ
United Kingdom
Tel: + 44 207 355 9570
BVI House Asia
Suite 5106, 51/F., Central Plaza, 18 Harbour Road, Wanchai, Hong Kong
Tel: (852) 3468 8533
Fax: (852) 3107 0019
BVI Tourism Offices
New York 1 West 34th Street
Suite 302, New York, NY 10001
Tel: 800-835-8530 / 212-563-3117
Fax: 212-563-2263
E-mail: info@bvitourism.com
Los Angeles
6601 Center Drive
Suite 500, Los Angeles, CA 90045
Tel: 213-304-2993
United Kingdom
15 Upper Grosvenor St., London W1K 7PJ
Emergency Numbers
Police & Ambulance 911/311
Search & Rescue (284) 499-0911
BVI Electricity Corp (284) 494-3911 (284) 494-3912
Fire and Rescue (284) 494-3473
Health Services (284) 852-7500 (284) 394-3497
Police HQ (284) 368-5371 (284) 494-3822
Water and Sewage (284) 468-5766 (284) 499-2924
PUBLISHER’S NOTE:
E-mail: info@fiabvi.vg Website: www.fiabvi.org
Tel: + 44-207-355-9585
Fax: + 44-207-355-9587
E-mail: info@bvitourism.com
After many years of prognostication, formal study and endless discussion, a new stand-alone Ministry of Financial Services, Labour and Trade was established after the general elections of last April, with the Hon. Lorna G. Smith, OBE assuming the helm as the first minister of the new portfolio. Minister Smith, who is most eminently qualified for this position, takes control of the financial services sector at a pivotal time in its evolution. Never a sector without multiple challenges lined up like a holding pattern for aircraft - each waiting on its turn to land at an international airport, the jurisdiction entered its fifth decade with its dominant pillar of the BVI economy in need of an experienced and able dedicated pair of hands at the ministerial level.
The myriad challenges facing the sector include maturity, strong global competition - not just in the offshore space, but increasingly from mid-shore and onshore, the slide in the jurisdiction’s lead product BC incorporations, BO pressure for an open registry, the Mutual Evaluation Report on the BVI, a Chinese economy that seems to have lost its footing, the rise of AI and a post-pandemic global economic environment where supply chains now seem to be focused entirely on national security concerns. We at Business BVI view this dedicated ministry as a unique opportunity for the new minister to bring the singular focus required to future-proof this important sector. Accordingly, in late January we sought and were granted an audience with Minister Smith for an in-depth conversation about her vision for the future of financial services in the territory.
My guiding philosophy work in the interest of people and I believe that financial services industry, over 57% of Government to that.
Firstly, congratulations on becoming the territory’s first Minister of the new portfolio of Financial Services, Labour and Trade, you are clearly immensely qualified to assume this responsibility. With eight months on the job under your belt, how are you doing?
It’s been a very tough eight months, but the BVI has never been without its challenges. We have faced them head on with the support of the industry and with the support of my staff. I think that I’m doing alright. I find that the key is to be frank with everybody. When I say frank, I’m including all stakeholders, including the United Kingdom Government, letting them know that I represent the people of the British Virgin Islands and I represent the interests of the British Virgin Islands in terms of financial services. In terms of business development, I have been working with the banks. I have a lot more work to do, but they are on board in terms of supporting business development and improving their levels of service to domestic customers although they can do a lot more and I will be staying in close contact with them. In terms of labour, the focus for this year has to be on workforce development for British Virgin Islanders, especially. It surprised me that as much as 60 percent, in fact higher, of the
philosophy is that I must of the BVI and its that supporting the industry, which brings in Government revenues is critical
workforce is on work permits. We need to ensure that work permits are only issued where there is no possibility of a BVI Islander doing the work. Of course we need to bring in skilled individuals to support our economy but we also want to make sure that our own people attain those same skills and rise to the top of their chosen profession.
Do you have a philosophy or set of guiding principles that you rely on as you navigate what is an enormous responsibility, particularly on the financial services side, given the Treasury’s reliance on the sector for revenue?
My guiding philosophy is that I must work in the interest of the BVI and its people and I believe that supporting the financial services industry, which brings in over 57% of Government revenues is critical to that. However, residents must benefit from this significant contribution. I’m not just talking about revenues, I’m talking about Virgin Islanders being involved in the workforce. We have stats that tell us residents are involved in two-thirds of the financial services industry — I’m talking about them occupying more
senior level positions in the industry. So, for me, my guiding philosophy is what’s best for BVI, whether it’s financial services, labour, trade or business development.
You have assumed ministerial leadership of the sector at a very pivotal point in the evolution of the sector here in the BVI, one that is facing maturity challenges, very strong global competition not just in the offshore space but increasingly from onshore, the slide in the jurisdiction’s BC incorporations numbers, BO pressure for an open registry, the Mutual Evaluation Report a Chinese economy that seems to have lost its footing economically and a post COVID global economic environment where supply chains now seem to be focused entirely on national security concerns. Given such myriad challenges facing the sector what are your top three priorities for the sector?
Our reputation is the foremost of my concerns. As your readers will know the Mutual Evaluation Report on the BVI was recently published simultaneously by the Caribbean Financial Action Task Force (CFATF) and the International
Monetary Fund. We are committed to rigorously implementing its recommendations as we laid out in the National Action Plan which was published on the same day as the Report. I am pleased to say that the Government has prioritised resources to support this work and I can confirm that a number of the necessary actions are already underway.
High standards of financial integrity which meet global standards are essential to our reputation as a wellregulated international financial centre. Our goal is to ensure that the BVI is always a hostile environment for illegitimate financial activity. By swiftly and effectively implementing the required actions, I believe that we will continue to ensure that this is the case.
BVI is always at its most successful when it looks outwards. There is no question that we must shore up our largest market: China. We have begun to do that — in fact, we had a delegation from the Financial Services Commission visit China late last year. Everybody is concerned about why the numbers of new registrations are falling, although I am pleased to say that existing BVI companies are
High standards of financial integrity which meet global standards are essential to our reputation as a well-regulated international financial centre. Our goal is to ensure that the BVI is always a hostile environment for illegitimate financial activity.
lasting longer, speaking to the wider array of services we are providing. However, we are assured by the industry that it’s not China. It’s not that business is going south, or anywhere else. It really is the global situation in which we find ourselves. However, be assured that we are not just sitting around. The Government will visit Asia, including China, specifically and Singapore in the late spring. Yes, it’s about protecting what we have, but also adding value to that industry. I am pleased that the BVI delegation will be led by the Premier. This Ministry will of course be represented
We have exciting new areas to talk about including in the areas of FinTech and I will be meeting many business colleagues over there.
So, a high level delegation is set to visit China in the late spring?
Yes. However, just as we did with Guyana, we don’t just want to make it a financial services delegation, but a broader representation of the private business sector. If there are opportunities — and it’s up to the businesses as to whether the timing works for them — we would certainly welcome that wider cross section of business representatives. The one thing we expect, as in Guyana’s case, is that people pay for themselves — that’s very important. It is the standard, but think there is plenty of opportunity and I am looking forward to broadening the opportunities for all businesses and we will invite interested persons.
You mentioned that in addition to China, that you would do Singapore. Just those two countries?
Singapore in the short term because that country is equally important to the BVI. We are looking at India probably in 2025. In China, we have our representative, Ricardo Wheatley, and we expect he will do more in terms of making sure opportunities for new business continues to be robust. But China is a big country. We will always visit Hong Kong and Beijing We will also be in Shenzhen where we expect to sign a Memorandum of Understanding. We have had a relationship with that country for
years.
Yes, we haven’t done a trade delegation to Asia since the pandemic. Not since the pandemic, that’s right. They were closed to visitors. So, we’re looking forward to it. It’s such factors that contribute to this downturn, as does global conflict. All those factors contribute to our challenges.
Where do you think there might be more diversified opportunities? Are there any other global trends that we should be tapping that will potentially drive the sector?
FinTech is driving everything. For the last two years, the government has been contributing to training residents in this field. Last year I think, we contributed something like $75,000 to the program at HLSCC. Don’t forget, last year we also passed the Virtual Assets legislation, which is significant. I was talking to the FSC just recently and they have a significant number of applications already — a very significant number in fact, but we must get the licensing process right. Although applicants are in a hurry, we have to get it right. Given the experiences globally, we want to be careful that when we do issue licenses, there will not be any difficulty going forward.
Another intriguing area is Climate Finance. The BVI is on the frontline of climate change as anyone who lived through the 2017 hurricanes is well aware. So we must identify solutions which cannot only benefit our financial services industry but also the BVI as a society. We have a Blue Economy Plan and we have considerable experience in our financial services industry. Moving forwards I am hoping that we can create the right investment vehicles in areas such as blue carbon which will enable investment into the BVI and both provides a return for investors but also the funding to enable us and our infrastructure to become more climate resilient.
India, the Middle East led by Saudi Arabia, the UAE, Israel, Africa as a continent, Vietnam, Indonesia and
Mexico have one dominant factor in common - post pandemic, they are all rising as global economic power houses. What is your thinking given your pivotal role is establishing BVI House Asia in expanding that concept to position the BVI brand in these countries as they rise, much as we did with China?
We must invest in order to see returns. I was involved in establishing The BVI London Office and BVI House Asia, and I think we’ve made some preliminary forays, if you want to call them that, into the United Arab Emirates. We have to do more research into that area, however. India seems to present another strong opportunity. I don’t know that we’ve done enough in Malaysia, but I think Southeast Asia is right for investment from the British Virgin Islands.
Recently the Chancellor of the Exchequer updated the British Parliament on a raft of measures — some already in place and others on the way — which he said were “difficult decisions to put our economy back on track”. The speech for the HM Treasury Autumn Statement 2023 that was delivered by Jeremy Hunt quoted the Office for Budget Responsibility as saying “the combined impact of these measures will raise business investment, get more people into work, reduce inflation next year and increase GDP”. Not included in the speech, but buried on page 99 of the document of policy changes laid before the parliament is a small note about a specific consultation: “The government will consult on the design of a new framework for encouraging the establishment and growth of captive insurance companies in the UK. The consultation will launch in spring 2024.” The report argues that to keep this business, Britain needs to become like Bermuda, Singapore and Switzerland by promoting the market it regulates. The report delved deeply into Bermuda’s leading role as a captive domicile, noting that the island’s solvency regime operates in a proportionate way, reducing barriers for low risks entities such as international reinsurers.
QUESTION: Some view this as a direct challenge to Bermuda given its dominance in the captive insurance and reinsurance space. Should offshore jurisdictions such as the BVI view onshore centres such as London as serious long term competitors?
Its an interesting question. Hong Kong and Singapore, for example, consider themselves to be mid-shore; ie between offshore and onshore, and with Brexit we recognise that the United Kingdom itself will have to look at opportunities beyond the EU. We know that there are those who want to see much more deregulation in the UK’s financial services sphere. That’s is why we must always be frank with the UK because sometimes, they might be acting on the basis of enlightened self-interest. We must always make sure our country and our jurisdiction come first. As far as captive insurance itself is concerned, we have noticed some previous BVI captive insurance vehicles moving to Nevis . We need to assess the reasons for this and how to counter what attraction Nevis might have. I’m sure you’re going to ask me, so let me bring it up now. General Insurance; it’s a huge problem. We need to have it and it must become a national conversation; the premiums are not going down. I believe the UK and the USA offer government organised insurance for potential natural disasters like floods, but I think we need to have a regional conversation; because what impacts us, impacts the rest of the Caribbean in terms of the high cost.
The new reality is that every year now, there are numerous multi-billion-dollar catastrophes all across the globe and these are projected to increase as far as the eye can see, putting in play new growth opportunities in the insurance sector.
We as a government, as a country, would be better off dealing with insurance as a region because we have the same challenges in terms of hurricanes and earthquakes.
If as a jurisdiction we are to capitalise on the global trends you mentioned above, what would you identify as three key infrastructure projects - physical or policy, that the jurisdiction must address if it we are to be able to benefit from these trends?
The airport is a given. Beyond that, there are other projects. First, our roads have deteriorated to a level that they are almost not-motor able in some areas. You drive up to East End for example, there in Fat Hogs Bay, the holes can take you in. I’m serious! I mean, I was up there this weekend
on my way to Virgin Gorda, and it’s really, really bad. I’m very glad that the government has committed to raising significant loans for road works. I think the minister is talking about 30 plus million dollars, My own philosophy is one I have stated publicly: I believe that government needs to bite the bullet and borrow as much as three to four hundred million dollars and address the infrastructure needs. Address those needs comprehensively. We cannot continue expecting to compete with the likes of Bermuda and Cayman with our roads in the state they’re in, our sewage in the state it’s in, our waste management, our power generation and our IT infrastructure. We need to borrow some real money, and I believe it’s possible to do so. I know that there are borrowing guidelines that we must adhere to, but I think we must borrow a significant sum of money. The banks, I believe, would be willing to loan to the government. Our debt service record over the years has been excellent.
In the global marketplace, fit for purpose infrastructure is now viewed as a given as part of a jurisdiction selling proposition. Absolutely.
When people compare BVI to Cayman or Bermuda, they expect a certain level of functionality of its infrastructure.
The income per-capita of the BVI is comparable to Bermuda and Cayman; how could we be so far behind them in terms of infrastructure? We must do what needs to be done, not just for the financial services sector but also the broader economy and the quality of life in the territory. People come here after Cayman and Bermuda and they’re very disappointed with the level of infrastructure in the territory.
We can no longer get away with it. The other part of borrowing a substantial amount of money is that it will be spent over a period of time thus also helping the broader economy.
Exactly, exactly. It helps stimulate the economy.
You travelled to London late last fall and the matter of BO was high on your agenda for your discussions with the FCDO. Where is the jurisdiction heading with regards to BO
This year is full of challenges. We need to maintain our numbers for the foreseeable future, expand the services we offer so companies are registered here for longer, expand our FinTech offering and attract more digital assets and thoroughly investigate how climate finance can benefit both the industry and our population through the creation of a new employment sector as we make our infrastructure more resilient.
and the public registry being pushed by the UK? Is an agreement on this matter in the offing before Labour comes to power in the UK?
We have been clear over the years on the matter of BO. We committed in 2020 to public access to registers, saying we would do so when it became the global standard. We also said we would stay aligned with the Fifth Anti-Money Laundering Directive. Then, at the end of 2022, the European Union Court of Justice made the decision that a person’s right to privacy was paramount in relation to public access to registers of beneficial ownership. So that, in essence, was something of a game changer that we had to take into account. Even though the British would say, quite correctly, they are not a part of the European Union, our business is global; we cannot afford to be sued, taken to court for violating a legal decision. We’ve had negotiations with the UK, and we’ve made sure to discuss the matter with the Crown Dependencies, the Cayman Islands and Bermuda, aligning our position i.e. the establishment of an appropriate framework for public access to registers of beneficial ownership by the second quarter of 2025. This is a position that all Crown Dependencies and Caribbean Overseas Territories have taken. It’s been tough negotiating with the UK but as I began by saying: for us, the BVI’s position is the BVI’s
position — securing our own future sustainability is paramount. Just as it will be in their case.
It’s interesting and notable to hear of our cooperation with your other OT ministerial colleagues as you go down this road.
I really enjoyed the relationship and the negotiations and the discussions I had with my colleagues, especially in Bermuda, and Cayman.
We’re in the same pond. Different places in the pond, but the same pond, and if the water evaporates we are all exposed.
The Honourable E. David Burt, the premier of Bermuda, I have found to be very helpful. He’s been very honest, very accessible, and I have found working with him a really excellent experience.
He seems to be leaning to a more regional position on matters. Some people are misinterpreting it, but strategically, I think he’s doing the right thing in that regard. I will say: one of the benefits beyond your own qualifications and abilities, is now having a ministry of financial services with a singular daily focus.
Exactly. And anticipating what’s around the corner.
Without getting in the political weeds, we are all aware that 2024 will be an election year in the UK and for months now the Labour Party had been ahead of the governing Conservatives by an average of 20 points. As minister of financial services and being the strategic thinker you are, how are you: A) Preparing for the eventuality of a Labour government should that be the decision of the UK electorate? and B) How do you see a Labour government in the UK affecting the sector after nearly 14 years of Tory governance and policies?
We know their position. But we must do several things. We have a good All Party Parliamentary Group, but many are standing down or have seats at risk so with a new Government we will be looking to form a new Group. All of the Overseas Territories have established a good relationship with the Opposition Spokesperson on the Overseas Territories and we enjoy a strong relationship with the Speaker of the House, Rt Hon Sir Lindsay Hoyle MP. With a new Labour government, at least a third of them are going to be new to the political scene and to the House of Commons. If we can pick the right all-party parliamentary group for starters, then we can begin the process of educating them about the BVI. We know it will be an uphill battle because we must educate all of them on the fact that what we do is legitimate, and that we contribute positively to the global economy. We’re not just sitting idly by on our hands.
Do you have any sense of what a potentially Labour government posture is going to be towards the OTs?
Past Labour Governments have been supportive of the Overseas Territories and making new friends and explaining to them how the BVI works will be an important priority.
Beyond that, we know that Dame Hodge is going to the House of Lords.
As I said, our job is getting out there and ensuring that members of the House of Commons and the House of Lords know how the BVI works and the value we bring to the global economy. Members of the House of Lords have been very protective of our constitutional position and I hope that continues.
We know it is early days yet but I am sure you are paying close attention to the rise of generative AI. Any early thoughts on how you see this technology affecting the future direction of the financial services sector?
It’s a lot, and we can’t ignore it. The last debate that we had at HLSCC was focused on AI and the future of financial services. The Debate may not be seen as a significant event, but it shows you that the industry is thinking about AI. The other good thing is that among the subjects that come within the purview of this ministry is digital transformation. While it’s not the same as AI, we will of course have to take that into account in terms of the future of BVI. You read about the impact of AI on employment and that is a great concern, because AI can do just so many things. We must aim to make sure AI works in our favour. One such area is that of compliance which helps ensure accuracy in terms of clients. We must make sure that it works in our interest and that people are not disenfranchised.
The government’s role is to try its best to understand where the technology is going; look at the economy that we have with a view to where the impact will be felt, and how it can help to mitigate that impact while helping to drive economic growth.
Yes, it’s not going away. Sherry Ortiz did have an AI expert on compliance at her conference last year. So, it’s something that the industry is watching, and the industry is very conscious of.
You clearly have deep roots in the private sector side of financial services which you bring to this position as the sector’s first stand alone minister. How are you utilising those relationships to help in repositioning the sector and moving your agenda forward? Are you, for example, establishing informal committees to look at specific areas of concern?
I haven’t set up a lot of informal committees as yet, but everybody is willing to help. The way BVI Finance is structured, there is a board and individuals on that board are very helpful — I can pick up the phone and call them. For instance, even with public access to registers of beneficial ownership: I know the director of international business has a committee comprised of persons from the private sector to support and advise her on the specific area of legislation. So, we use the private sector in this industry, it’s an important element. In addition, we of course have several retired financial
services experts who have made their home in the BVI, plus of course the inestimable Dr. Robert Mathavious –always a good guide for me!
Of all the 13 elected members in the current HOA you are in a unique situation with your own resident former Premier on hand to bend his ears on new ideas and thorny issues. How has Dr. Smith helped in your transition to being advised as opposed to being an advisor?
Yes! He’s one of my advisors, I bounce ideas off him. We don’t always agree as you know, but I’m grateful. Let me put it this way, I’m grateful to be in this position. He gives me excellent advice on a number of areas.
From what is another unique vantage point-that of having worked directly with the Hon HL Stoutt who was clearly the dominant leader of the modern BVI, what three lessons have your adopted from that experience in your new ministerial position and as Deputy leader of the territory?
Every day he taught me, for example, to think in the interest of BVI. He taught me also to think big. He was a bold thinker, he taught me to be bold. He taught me the importance of listening and taking advice from the humblest of places. Everybody has something to offer. In terms of advice and he taught me to just do what is right and to be fearless because you are acting in the interest of the territory. As you know, he was a man of high standards and he taught me the importance of always meeting those standards.
Finally, what canary in the coal mine is keeping you up at night?
This year is full of challenges. We need to maintain our numbers for the foreseeable future, expand the services we offer so companies are registered here for longer, expand our FinTech offering and attract more digital assets and thoroughly investigate how climate finance can benefit both the industry and our population through the creation of a new employment sector as we make our infrastructure more resilient. I console myself with the fact that BVI has always been full of challenges, and we have always overcome. I hope and expect that we will continue to do so. BB
E x p e r i e n c e l u x u r y l i v i n g w i t h
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