The British Virgin Islands (BVI) remains the top offshore jurisdiction in the world, according to the 2017 edition of the Vistra 2020 Report, launched in Hong Kong and Singapore last week. The report ranked the United Kingdom the number one jurisdiction (onshore), followed by Hong Kong (midshore), the BVI (offshore) and the United States (onshore).
Vistra 2020: The Uncertainty Principle: The State of the Trust, Fund and Corporate Services Industry 2017 examines trends and factors that have shaped the global financial services industry since the publication of the last report in 2015.
The report found that in Asia the top growth drivers of the industry are increased client sophistication; asset protection; cross border trade / foreign direct investment; wealth planning; privacy and client anonymity; and higher tax in developed markets.
The Asian growth drivers listed in the Vistra Report support the BVI’s position as Asia’s number one international finance jurisdiction. “The BVI is ‘an embedded brand’ and still the go-to for most structuring conduits,” outlines the report.
Chinese and Asian investors can utilise the trust-related offerings of the BVI to develop succession planning and secure asset protection through Virgin Islands Special Trust Act (VISTA) trusts and Private Trust Companies (PTCs). Those services also make the jurisdiction attractive to family offices in Hong Kong and on the mainland. BVI trusts and wealth-planning services insure privacy, since assets are held in the trustee’s name, while the identity and interests of the beneficiaries remain confidential.
Nearly 60 percent of respondents in the report think that by 2020 technology will disrupt the industry with innovation that will lower costs and fundamentally change business models. For example, technology will help customers open BVI bank accounts who currently cannot do so at banks where they do business. The difficulty opening and maintaining a bank account was the key business constraint in Asia, according to the report.
Ms. Elise Donovan, Director, BVI House Asia, said: “The newly licenced Bank of Asia, the first online, cloud-based bank, will launch later this year. It is poised to drive banking costs lower while increasing the level of convenience and efficiency afforded to customers opening BVI accounts.”
Globalisation from China into the West is one of the big trends that is going to dominate the economic view of the world over the next few decades, according to the report.
“The BVI remains a leader in corporate structuring for Chinese outbound investment across a range of sectors,” Ms. Donovan said. “The increase in Chinese outbound investment bodes well for the BVI to continue as a leader in this area.”
The BVI assists clients in structuring Chinese outbound investment in energy, infrastructure, technology and agriculture, among other sectors. The BVI’s attributes - a legal system based on English common law, internationally compliant regulations and tax neutrality - make it an especially attractive jurisdiction to channel outbound Chinese investment along the Silk Road Economic Belt, the 21st Century Maritime Silk Road, and to facilitate China’s Go Global strategy.
“Our industry bolsters the global economy; it facilitates exchanges, prevents extra layers of taxation, presents neutral venues, and protects investors with robust legal systems,” the report concludes. That is the important role the BVI plays in facilitating international business, not just in China and Asia, but around the world.