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On January 1, 2019, the "Law on Economic Presence" was passed in the British Virgin Islands to prohibit the registration and activities of legal entities whose main purpose is tax evasion and money laundering.
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The law was passed and written rather abruptly, as evidenced by the fact that its author, the lawyer Michael Fernes, was honored 300 thousand dollars. And all this because on December 31, 2018, the time for which the jurisdictions of the list of those who do not cooperate with the European Union could have expired. This list includes 92 overseas territories that have abused their special status in terms of tax and trade privileges, and most of them are particularly loved by immigrants from the countries of the United States. former USSR.
What is the British Virgin Islands? Overseas British territory consisting of 60 islands and reefs of a total area of 153 square kilometers, located in northeastern Canada. The US dollar is the main currency of the islands. There are no restrictions on the conversion or transfer of foreign currency to or from the country. Although tourism is the main sector of economic activity, 41% of the world's offshore companies are registered in the British Virgin Islands.
The law introduces a number of new requirements for legal entities applying for registration with the BWO: real activity in the islands, prohibition of absence of "economic presence" – director, office, "adequate expenses", etc. . The British Virgin Islands are losing the benefits that attracted those who wanted to seize the offshore "budget" company. Companies already registered on the islands benefit from a short transition period to coordinate their activities with the new law. In case of non-compliance with this condition, the registration will be canceled. In addition, companies registered with BWO must provide the authorities with any information "reasonably necessary" to verify compliance with the law.
Remember that offshore is a term that comes from offshore English, "out of bounds". It was used for the first time in one of the American newspapers in the late fifties of the twentieth century concerning a financial organization that moved its activities in a favorable fiscal climate. Currently, it is used to designate territories, mainly islands, where the legislation in force partially or totally exempts companies from the income tax levied outside the borders of the country of registration.
