The FHTP standard requires that core income generating activities for certain sectors of business activity must be conducted with qualified employees and operating expenditure in the jurisdiction.
The review by the OECD follows the BVI’s implementation of the Economic Substance (Companies and Limited Partnerships) Act in December 2018. Starting in October 2019, entities that engage in relevant business, are tax resident and incorporated in the BVI must report their activity according to the requirements of the Act.
The FHTP will now proceed with an annual monitoring process, beginning in 2020, that will assess any changes in BVI’s legal frameworks, as well as the implementation of safeguards and enforcement measures.
Commenting on the recognition, Elise Donovan, Chief Executive Officer of BVI Finance, said:
“We welcome the peer review by the OECD of our new substance requirements. It is a significant positive development which follows months of hard work from Neil Smith and the team to draft and enact legislation which meets relevant substance requirements and continues to demonstrate BVI’s value to the global economy.
“The BVI remains a cooperative jurisdiction and committed to the BEPS standard. We always been clear in our commitment to meet and exceed the global standards, so we are pleased that our proactive approach has been recognised in the OECD’s review.”
If you really look closely, most overnight successes took a long time.