In his third Budget Address as Minister of Finance, Premier of the Virgin Islands, Dr. the Hon. Natalio Wheatley, unveiled the government’s plans for 2025 under the theme “Laying the Blocks of Success.” The address built on the framework of “Building a Sustainable Nation,” as outlined in the National Sustainable Development Plan (NSDP) titled “Vision 2036: Building a Sustainable Virgin Islands.” Emphasizing resilience and strategic planning, Premier Wheatley highlighted the vital role of the financial services sector in driving economic growth and sustainability.
2024: A Year of Resilience and Achievement
Despite external challenges such as geopolitical tensions, inflationary pressures, and the lingering impacts of the pandemic, the Virgin Islands demonstrated economic resilience in 2024. The twin pillars of the economy—tourism and financial services—surpassed expectations, reinforcing the Territory’s position as a dynamic and adaptive global player.
In particular, the financial services sector showcased remarkable growth:
• 25.7% Increase in New Incorporations: By mid-2024, the Territory recorded 13,006 new company incorporations, with end-of-year projections reflecting a 14.3% growth over 2023.
• GDP Growth: Financial services contributed significantly to the projected nominal GDP of $1.76 billion in 2024—a 7.4% increase over the previous year.
Key Financial Services Developments
1. Strengthening Regulatory Standards
o Continued implementation of robust regulatory measures to combat illicit finance, in line with recommendations from the Caribbean Financial Action Task Force (CFATF).
o Ongoing reforms to enhance the Territory’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime.
2. Beneficial Ownership Reforms
o Introduction of new legislation to improve the collection and protection of beneficial ownership information, ensuring compliance with international standards while safeguarding investor privacy.
3. Technological Investments
o Upgrades to the VIRRGIN platform, supported by a $1 million investment from the European Union’s RESEMBID programme, will improve regulatory efficiency.
o Development of advanced Regulatory and Supervisory Tech solutions to streamline compliance and reduce costs for industry stakeholders.
4. Market Diversification
o Strengthening partnerships in Asia, focusing on clean energy, digital assets, and private equity opportunities.
o Growth of the Virtual Asset Service Providers (VASP) regime, positioning the BVI as a leader in the digital assets space.
2025 Financial Services Outlook
The Premier underscored the government’s commitment to advancing the financial services sector through strategic reforms, innovation, and international cooperation:
• Regulatory Enhancements:
o New reforms targeting the banking, trust, and corporate service providers sectors.
o Adoption of Basel II standards and enhanced consumer protection measures.
• Beneficial Ownership Transparency:
o Implementation of the second phase of beneficial ownership reforms in consultation with industry practitioners.
• National Financial Services Strategy:
o Launch of a comprehensive strategy to maintain the BVI’s competitive edge and global leadership.
• Global Tax Compliance:
o Partnership with KPMG to assess the impact of the OECD’s Global Anti-Base Erosion (GloBE) Rules, ensuring alignment with global tax standards while protecting the Territory’s interests.
• Tax Administration Enhancements:
o Introduction of new revenue streams through reporting entity fees and modernization of tax systems in collaboration with international partners.
Budget Allocations and Projections
For 2025, the government has proposed a budget of $407.9 million, with financial services playing a pivotal role in achieving these targets. Compliance with borrowing limits will be prioritized to ensure fiscal responsibility and sustainable growth.
A Vision for the Future
Premier Wheatley emphasized the government’s unwavering commitment to fostering innovation, transparency, and regulatory excellence in the financial services sector. Through strategic investments and forward-looking reforms, the Virgin Islands aims to secure its position as a world-class financial hub, driving sustainable growth and prosperity for the Territory and its people.
“By laying the blocks of success today, we are building a resilient and sustainable Virgin Islands for generations to come,” the Premier concluded.
To read the Premiers full statement click here.