While noting that the increases will encourage the Virgin Islands Trade Commission to become a self-sufficient entity, Premier and Minister of Finance Dr Natalio Wheatley said considerable research went into the fee structure of business licenses.
The Finance Minister also said that during the process this research, it was necessary for the territory to compare its fee structure to similar jurisdictions such as the Turks and Caicos Islands.
This comparison led to the discovery that the BVI’s fees are significantly lower.
“Compared to other territories such as the Cayman Islands, [their fees] are five to 10 times higher with a range of $150 to $400,0000. Turks and Caicos annual fees for business licenses range from $150 to $10,000 depending on the type of business. There are currently 45 categories of business activities and 65 fee classifications. Twenty categories are reserved for Turks and Caicos Islanders, or Turks and Caicos Islanders-controlled businesses,” Dr Wheatley explained.
The BVI’s existing fees range from $25 to $250 for Belongers and $200 to $600 for non-Belongers.
But with the increases, the cost of Trade Licences will be up to six times more expensive for locals. The new prices for non-Belongers are seven to 25 times higher than the previous cost.
“As it relates to the new proposed structure, the fees range from $150 to $1,500 for Belongers and $1,500 to $15,000 for non-Belongers depending on the category of business. The proposed fees still remain relatively lower than that of Cayman and on par with Turks and Caicos. We have aimed to be competitive and relatively affordable while balancing the need for the Virgin Islands Trade Commission to generate revenue to become more self-sufficient and make a contribution to the overall finances of the Virgin Islands,” the Finance Minister said.
The Premier said the revised fees will apply to the trade license fee for different activities. He explained that Schedule 1(A) of the Act provides for activities that are open for both Belongers and non-Belonger investors, while part B of the schedule provides for economic activities which are reserved for ownership by Belongers only. Part C provides for economic activities which require joint venture ownership with Belongers.
“The fees applicable to Belonegrs are different to those applicable to non-Belongers and these are simply a reflection of the fact that as citizens of the Virgin Islands, persons are entitled to some benefits and consideration, support and encouragement and to engage in entrepreneurial activity in their homeland,” Dr Wheatley said.
“The difference in the fees between Belongers and non-Belongers also recognises that non-Belongers are considered Foreign Direct Investments (FDI) within the Virgin Islands. The new structure also encourages more local participation and involvement in the economy while promoting fair competition between locals and FDIs,” the Finance Minister added.