US VIRGIN ISLANDS Law and Practice Contributed by: Marjorie (Jorie) Roberts, Duncan J.J. Kessler and Jessica McKenney, Marjorie Rawls Roberts PC
In parallel with the federal District Court, there is a two- tier territorial judiciary. The Superior Court of the Virgin Islands is the trial court of general jurisdiction that presides over both criminal and civil cases, as well as appeals from territorial administrative agencies, and has a specialised division for family cases, including juvenile matters. The Superior Court also has a mag - istrate division that presides over probate matters, landlord–tenant disputes, small claims, traffic viola - tions and certain misdemeanours. Decisions of the Superior Court are appealable to the Supreme Court of the Virgin Islands. The Supreme Court was estab - lished in 2004 by the Legislature and began exercising its authority in 2007. Decisions of the Supreme Court are appealable to the Supreme Court of the United States. Like most of the 50 states, the USVI follows the common-law tradition in which judge-made case law informs legal decision-making. The USVI previously followed the Restatements of the Law published by the American Law Institute. However, since the USVI Supreme Court case Banks v International Rental & Leasing Corp ., 55 V.I. 967 (V.I. 2011), the common-law principles are now established through a legal analy - sis by the court as outlined in Banks , and the legal analysis may still determine that the Restatement of the Law is the best rule. 2. Restrictions on Foreign Investments 2.1 Approval of Foreign Investments The USVI is part of the United States, so federal statutes governing foreign investment in the United States, such as the Foreign Investment Risk Review Modernization Act of 2018 and the regulations prom - ulgated thereunder, apply in the USVI. Additionally, the USVI is included within the defini - tion of “United States” in the United States’ exten - sive network of Treaties of Friendship, Treaties of Commerce, and Navigation and Bilateral Investment Treaties, officially known as Treaties Concerning the Encouragement and Reciprocal Protection of Invest - ment. These treaties provide a number of important benefits, most notably protection in the case of expro - priation. As a note, the US International Trade Admin - istration lists the Bilateral Investment Treaties currently in force between the United States and other coun -
tries. In contrast, the USVI is not included in the United States’ network of income tax treaties (nor are other US territories) and is not able to enter into its own tax treaties. However, the USVI has agreements with the United States for the exchange of information relating to taxes, namely, the Tax Implementation Agreement Between the United States of America and the Vir - gin Islands, dated 24 February 1987, and IRS Notice 2007-31, which includes the Working Arrangement. Legislating Foreign Investment and Growth in Particular Sectors The USVI does not have separate legislation or other rules limiting foreign investment in the USVI. Foreign businesses, like other businesses, must register to do business with the Office of the Lieutenant Governor and obtain the appropriate approvals and licences for their business. The USVI as an unincorporated terri - tory is also subject to the federal review process for any merger, acquisition or real estate transaction that involves critical infrastructure, sensitive personal data, or proximity to a military or government site (a “CFIUS review”). The USVI has local laws that address merg - ers and acquisitions as well. Not only does the USVI have few prior-approval or criteria requirements for foreign investment, the USVI has enacted a number of economic incentive pro - grammes to attract US and foreign investors to work and invest in the USVI. These programmes are gen - erally, but not always, managed by the Virgin Islands Economic Development Authority (EDA), which active - ly seeks investment in certain USVI sectors. Exam - ples of incentive programmes in the USVI include the Economic Development Commission (EDC), the University of the Virgin Islands Research and Technol - ogy Park (“RTPark”) and the South Shore Trade Zone (SSTZ) programmes. Eligible EDC beneficiary industries are outlined in 29 V.I.C. § 708 and include multiple categories: • “Legacy Virgin Islands Industries” – such as rum distilling, watch and jewellery manufacturing, and milk/dairy production; • “Product Assembly, Manufacturing, Repair and Maintenance and/or Export Operations”;
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