BRITISH VIRGIN ISLANDS: An Introduction
The British Virgin Islands (BVI) remains a leading offshore international business and finance centre, recognised for its stable, innovative, business-friendly legal and regulatory environment. 2024 was significant for the jurisdiction, with the enactment of changes to the BVI Business Companies Act, 2004 (as amended), referred to as the BVIBC Act, which came into effect on 2 January 2025, and other legislative developments.
Economy
The territory’s tourism sector has continued its growth from the previous year alongside the financial services sector, and these two areas still represent the two main pillars of the economy. The Russian invasion of Ukraine and the Israel-Hamas war continue to be of global concern for countries around the world, including the BVI. Although interest rates have come down somewhat, they remain high and continue to impact global clients in the jurisdiction and persons resident in the jurisdiction. Notwithstanding the international issues, the BVI saw a year-on-year increase in cruise ship arrivals, including new ocean liners, day trippers and yachting activities. The direct flight from Miami to the BVI, effective in 2023, has been very successful, resulting in increased daily flights and direct visitors to the territory.
The territory’s financial services sector is doing well with respect to company incorporations, limited partnerships and investment funds, which supported an increase in investment fund managers, investment business licensees and trust businesses. At the end of the third quarter of 2024, active companies stood at 363,583, limited partnerships at 2,547, registered investment funds at 2,024 and approved managers at 989. BVI trusts remain attractive legal vehicles for succession planning, including the BVI’s sought after VISTA trust, and the widely used private trust company.
Domestic real estate and banking activities have experienced growth, albeit with some constraints due to higher interest rates. Fortunately, interest rates have decreased slightly in the last few months.
Significant Worldwide Deals
As in previous years, BVI entities were involved in significant capital markets and M&A deals worldwide. BVI firms acted in high-value, complex, and innovative transactions worth billions of dollars, including acquisitions, complex restructurings, initial public offerings and new fund launches.
Some noteworthy transactions include NYSE listed Despegar’s proposed acquisition of Prosus, a leading global technology company. The transaction, structured as a BVI statutory merger, valued Despegar at approximately USD1.7 billion and represents a 33% premium to Despegar’s closing share price as of 20 December 2024.
Autodesk Inc’s acquisition of PayApps Limited, a BVI company that runs cloud-based construction software for submitting, assessing and approving progress payments for contractors, was also implemented through a BVI statutory merger.
In 2024, Visa acquired Pismo, a cloud-native issuer processing and core banking platform founded in Brazil in 2016, in a USD1 billion deal. New York Stock Exchange-listed US fintech company Shift4 (NYSE: FOUR) acquired Israel online merchant bank and payment service provide Finaro (formerly Credorax) in a cash and share deal worth at least USD575 million.
Thor Urbana completed a financing transaction with Banco Inbursa, S.A., Institución de Banca Múltiple, Grupo Financiero Inbursa, valued in the region of USD80 million for the development of hotel properties in the Caribbean. The BVI was also involved in the consensual cross-border restructuring of Digicel International Finance Limited and certain affiliated entities (the Digicel Group) of approximately USD3.8 billion of its indebtedness.
Initial public offerings (IPOs) in 2024 included Junee Limited (Junee) and mF International Limited (MFI) on NASDAQ and BBB Foods in a USD589 million NYSE IPO.
Dispute Resolution and Insolvency
In dispute resolution and insolvency, several high-profile matters involving BVI law firms and insolvency practitioners continued in 2024, such as the Three Arrows Capital bankruptcy and spin-off cases resulting from the 2022 collapse of crypto exchange FTX. The BVI International Arbitration Centre also remains active and has an increased presence in domestic and international arbitration.
Regulatory
On the legislative front, the BVI Business Companies (Amendment) Act, 2024, which was enacted in September 2024, came fully into force on 2 January 2025. It ushered in important changes to the BVI company law regime, including the private (non-public) filing of a company’s register of members and beneficial owners with the BVI Registrar of Corporate Affairs. It is important to note that these filings are non-public and that the information may only be accessed by competent authorities and law enforcement agencies in the lawful discharge of their duties. Filing exemptions are available for some types of entities. The September 2024 filing of the first set of annual financial returns for companies was extended to the end of the first quarter of 2025.
The Virtual Assets Service Providers Act, 2022, (the “VASP Act”) came into force on 1 February 2023, and provides a regulatory framework for supervising virtual assets service providers. The VASP Act saw its first set of approvals in 2024, including Portofino Technologies Global, a prominent cryptocurrency market maker known for its over-the-counter trading services for institutional clients. Portofino was approved to offer virtual asset services such as fiat-to-crypto exchange and exchange between various virtual assets.
In 2024, the Virgin Islands Shipping Registry also officially became the Virgin Islands Shipping and Maritime Authority pursuant to the Virgin Islands Shipping and Maritime Authority Act, 2023. As a statutory body, the Authority now has greater autonomy in making decisions that generate revenue, facilitate growth, and expand its services to keep up with international maritime community demands and market trends.
AML/CFT/CPF
Following the Caribbean Financial Action Task Force’s evaluation of the BVI jurisdiction in 2023, the resulting Mutual Evaluation Report was released in early 2024. The report acknowledged the BVI’s efforts to tackle money laundering, terrorist financing, and proliferation financing risks while also offering recommendations to strengthen its AML/CFT/CPF systems. The BVI government confirmed ongoing work in the identified areas and issued a National Action Plan, which is currently in the implementation phase. The BVI Financial Services Commission, responsible for regulating financial services in the territory, is working to implement the recommended actions outlined in the Plan.
Contributions to the Global Economy
The Pragmatix Report of 2022, commissioned by BVI Finance, remained very relevant in 2024 as the BVI continued to promote global capital flow and facilitate important transactions that would otherwise be impossible. The jurisdiction remains significant in the global economy and continues to offer a “net benefit” to countries worldwide “due to its scale of contribution to investments and jobs.”
The issue of creating a public register of beneficial ownership for BVI companies remains active in the territory. However, in November 2022, the European Court of Justice declared these registers invalid in the EU on privacy grounds. This judgment, coupled with subsequent representations, led the UK to agree with the BVI and other overseas territories and crown dependencies to implement a "legitimate interest" test before access to beneficial ownership information is granted. This means that a public register of beneficial ownership in the BVI is not likely in the near future.
Since the creation of the Ministry of Financial Services in 2023, with a minister dedicated to financial services, the government has been more focused on the industry which continued to grow and evolve throughout 2024.
As in previous years, BVI financial services sector participants, including lawyers, accountants, insolvency practitioners and corporate services professionals, continue to use their significant skills and expertise to address innovative, complex and high-value transactions for the global market.
Overall, the outlook for the BVI remains highly positive. Industry practitioners are confident that the territory will continue to rise above worldwide economic challenges while meaningfully contributing to the global economy.