British Virgin Islands: Country and Foreign Investment
Economy and Currency
The currency of the British Virgin Islands has been the United States dollar since 1962, although banks maintain accounts in sterling as well. There are no exchange controls. The two mainstays of the economy are tourism and offshore financial operations. Minor industries include fishing, rum distilling and construction. Exports include fish, rum, sand and gravel, fruits and vegetables.
Tourism accounts for an estimated 45% of GDP. BVI is also an established centre for the charter yacht industry. Agriculture is minimal since there is very little arable land; the islands consist mainly of hills and beaches with the exception of Anegada which is very flat.
The financial services industry in the British Virgin Islands can fairly be described as a runaway success, particularly in recent years, with more than 1m BVI companies having been incorporated the BVI is the largest provider of offshore entities. There is no doubt that the BVI is an attractive offshore destination, offering stability, high levels of privacy, good reputation, flexible legislation, English language etc. Other centres have all these things also; but the BVI seem to be flavour of the month. The most important offshore activities are trust management, mutual funds and captive insurance. Banking has not been encouraged, as an apparently successful defence against money-laundering.
Minister for Finance Ronnie W. Skelton told assembly members in 2010 that the government had received almost 60% (US$164 million) of its total revenue from the financial services industry in 2009.
GDP growth has been muted in recent years, but GDP per head at US$30,341 in 2009 is one of the highest in the world.
The BVI is an associate member of the Organisation of Eastern Caribbean States (OECS), which is gradually constructing a free trade zone. The members signed an economic agreement on December 29, which will form an Economic Union in the region. The new treaty updates the Treaty of Basseterre, which first entered into force in June 1981, and entered into force on August 1, 2011. It will further remove barriers to trade between national markets in goods, services, movement of capital and labor forces, which will transform the islands into a single financial and economic space. Eleven sectors have been listed in the treaty for joint action. These include civil aviation, agriculture, tourism, education, environmental sustainability, marine, disaster response, and telecommunications.
The OECS includes the islands of Antigua and Barbuda, Dominica, Grenada, St Lucia, St Vincent and the Grenadines, Montserrat, St Kitts and Nevis. Anguilla and the British Virgin Islands (BVI) are associate members. The islands, except the BVI, already share a number of institutions including a central bank and a common judiciary.