US VIRGIN ISLANDS Law and Practice Contributed by: Marjorie (Jorie) Roberts, Duncan J.J. Kessler and Jessica McKenney, Marjorie Rawls Roberts PC
2.2 Procedure to Obtain Approval and Sanctions for Non-Compliance There are no specific steps for foreign investors to follow in order to obtain approval before investing, although investors in real estate may be subject to the withholding percentage of real-estate purchase price. The businesses themselves may be subject to CFIUS review if involved in the sectors mentioned in 2.1 Approval of Foreign Investments . If a business is a banking (including a foreign bank), insurance or financial services entity, then it is subject to licens - ing and regulation by the Virgin Islands Division of Banking, Insurance & Financial Regulation, which is administered by the Office of the Lieutenant Governor and/or the Virgin Islands Banking Board, of which the Lieutenant Governor serves as the Chairman, but this is not necessarily specific to foreign investors. For investors that want to invest with the benefits of a tax incentive programme, eg, the EDC or RTPark Program, applicants must apply for benefits and be approved through those respective programmes. 2.3 Commitments Required From Foreign Investors Foreign investment itself is not conditioned upon cer - tain commitments, although those seeking to benefit from one of the USVI incentive programmes have cer - tain commitments relating to local employees, using local businesses, charitable contributions, etc, which are generally statutory and apply to all applicants. All USVI exempt companies (as described in 3.1 Most Common Forms of Legal Entity ) must still file a spe - cific annual report and annual franchise tax report pre - scribed by the Lieutenant Governor for exempt com - panies and pay an annual franchise tax of USD1,000. See 13 V.I.C. § 860. 2.4 Right to Appeal USVI companies have access to the US court system for dispute resolution. The District Court of the Virgin Islands operates no differently from the district courts in the 50 states, and it is in the Third Circuit – the same as Delaware. Moreover, cases can be heard in the Superior Court of the Virgin Islands.
• “Facilities, Tourism and Communications Devel - opments – including Hotels/Guesthouses, Health Care, Recreation and Retirement Facilities, Trans - portation, Utilities (including Alternative Energy Industry), and Telecommunication”; • “Designated Services Businesses”, as defined in 29 V.I.C. § 703 (g), which includes, among other listed businesses, investment managers, trading services, financial services, medical services, and other businesses serving clients outside the USVI as deemed appropriate by the EDC; and • “International Financial Service Entities”. Under 29 V.I.C. § 708 (t), applicants in this category are exempt from most of the regulations governing other EDC entities but must comply with provisions of the International Banking Center Regulatory Act. The SSTZ Program provides incentives for investment in the industries of production, warehousing, trading, transportation and forwarding, fairs and expositions (hotels, training and conference facilities), financial and credit services, think tanks, etc, within a desig - nated area along the south shore of St. Croix. The RTPark Program provides investment incentives for companies with a focus on technology, research and science, or fields that are extensively “knowledge or skills based”. While these programmes do not limit foreign invest - ment generally, they each have their own rules and regulations, and application and approval processes, to qualify for admittance into the programmes and subsequent benefits. The EDC and SSTZ Programs require that applicants be approved by the EDA, a USVI government entity, and the RTPark Program requires approval of the RTPark Board, a quasi-gov - ernment entity. Both the EDA and RTPark Programs have continuing compliance commitments related to ownership structure, legal documentation and finan - cial reporting. Lastly, foreign investors in USVI real estate are subject to the Foreign Investment in Real Property Tax Act of 1980, which is codified in Sections 897 and 1445 of the Code.
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