Economy and Banking Sector of the British Virgin Islands

The British Virgin Islands (BVI) are a British overseas territory situated in the Caribbean Sea.

Tourism and offshore financial services are the most important sectors of the British Virgin Islands' economy: each generates roughly half the national income.

There are 6 banks operating in the British Virgin Islands.

Location Caribbean Sea
Population (2012)27 800
EU Status not part of the EU (OCT)
Dependent Territory Of United Kingdom (British Overseas Territory)
Economy
National Currency USD (United States dollar)
Credit Ratings (as of Sep 2016)
    Fitch-
    Moody's-
    S&P-
Taxation
Double Taxation Agreements 1 signed agreements
Information Exchange 
    Exchange on Request 25 signed agreements
    Automatic Exchange starts in September 2017
FATCA IGA in effect since 30 June 2014, Model 1
Banking Sector
Deposit Guarantee Scheme 
    Maximum Protected Amount 0 USD
Banking Supervision Financial Services Commission
Banking Sector Structure 
    Number of Banks6
 List of Banks in British Virgin Islands

EU Status

British Virgin Islands is one of the OCTs (Overseas Countries and Territories) of the European Union. This means that although its nationals are in principle EU citizens, British Virgin Islands is not part of the EU or directly subject to EU law.

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Taxation in British Virgin Islands

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

British Virgin Islands signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Switzerland
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Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

British Virgin Islands signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 01 January 2013 the date of coming into force is given in brackets):

 Aruba (Apr 2013)
 Australia
 Canada (Mar 2014)
 China
 Czech Republic
 Denmark
 Finland
 France
 Germany
 Iceland
 India
 Ireland
 Netherlands (Jul 2013)
 Norway
 Sweden
 United Kingdom
 United States

There are also several agreements between British Virgin Islands and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 01 January 2013 of signing the agreement is given in brackets):

 Curacao
 Faroe Islands
 Greenland
 Guernsey (Apr 2013)
 New Zealand
 Poland (Nov 2013)
 Portugal
 Sint Maarten (Dutch part)

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

British Virgin Islands signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Further Information:
Automatic Exchange of Information on Financial Accounts
Countries Which Will Not Automatically Exchange Account Information

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FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

British Virgin Islands has FATCA agreement with the U.S. in effect since 30 June 2014 (Intergovernmental Agreement Model 1). Financial institutions operating in British Virgin Islands are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is non-reciprocal: the British Virgin Islands' financial accounts hold in U.S. financial institutions will not be reported to the British Virgin Islands' authorities.

Further Information:
FATCA and European countries

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the British Virgin Islands' Banking Sector

Deposit Guarantee Scheme

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

There is no deposit guarantee scheme in British Virgin Islands.

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Banking Sector Structure

Currently there are 6 credit institutions operating in British Virgin Islands.

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