US VIRGIN ISLANDS Trends and Developments Contributed by: Marjorie (Jorie) Roberts, Sean E. Foster, David Bornn, Lisa M. Wisehart and Duncan J.J. Kessler, Marjorie Rawls Roberts PC
areas in Charlotte Amalie on St Thomas, along with adding Cruz Bay on St John, encompassing the area surrounding the Cruz Bay Creek, Frangipani Lane and Gallows Point. The benefits available to beneficiaries under the EZC Program are an income tax credit of 90%, a gross receipts tax exemption of 100% and a property tax benefit of 100%. Applicants must have businesses/ activities that are in accordance with the incentivised activities for the zone in which the applicant is apply - ing. For example, applicants in the Garden Street area of downtown Charlotte Amalie, St. Thomas, must be engaged in “live work”, sports and entertainment, good community, experiential tourism, the arts or restaurants. To qualify under the EZC Program, an applicant must (among other things) make a minimum capital invest - ment of USD10,000 and employ a minimum of two full-time USVI resident employees, either directly or through a contractor. The application process requires the submission of a description of the history and cur - rent condition of the property within the Enterprise and Commercial Zone and details of the construction or rehabilitation efforts to be undertaken. Applications are considered by the EZC commissioners. Upon approval, benefits are available for five years. Research and Technology Park Program The Research and Technology Park Program (“RTPark”) seeks to support the USVI’s expanding technology and knowledge-based sectors to pro - mote the growth, development and diversification of the USVI economy. Examples of knowledge-based businesses found in 17 V.I.C. Section 482 (i) include e-commerce, electronics, information technology and research businesses. In addition, the RTPark works to broaden the capabilities of the University of the Virgin Islands (UVI) by providing it with financial sup - port and training opportunities for UVI students, and by creating a research environment that combines the resources of UVI with those of the public sector and private industry. The RTPark has begun promot - ing enrichment programmes for USVI students K-12 through Science, Technology, Engineering and Math - ematics (STEM) afterschool enrichment programmes
and summer camps to strengthen the local pool of talent in STEM fields long-term. Beneficiaries of the RTPark currently operate in the areas of data analytics, web content development, interactive media management, e-commerce, soft - ware development and licensing, technology-based management and business process services, inter - net advertising, telecommunications and information technology, application development, financial tech - nology and medical device technology. Oversight of the RTPark Program is vested in the seven-mem - ber RTPark board of directors (the “Board”), which includes the chairperson of the UVI board of trustees and the president of UVI. In most cases, an applicant, through a legal repre - sentative, negotiates the terms of a tenancy with the RTPark’s executive director. Negotiations include: • the amount of the one-time entry fee paid by the applicant (typically at least USD50,000 and up to USD100,000, depending on the size of the appli - cant); • the applicant’s obligation to pay annual manage - ment fees to the RTPark (typically between 1.5% and 3% of the applicant’s gross income); • the structuring of a charitable donation to UVI that can include scholarships, internships, faculty sup - port, funds for specific programmes and in-kind contributions of time, typically starting at a total of USD35,000 annually; and • the percentage of equity interest to be awarded to the RTPark (often a 1% non-voting, no distribution “Class B” interest). Once negotiations have been finalised, a term sheet is entered into between the applicant and the RTPark, providing the basis for the formal application that covers the applicant and its owners. The final terms are memorialised in the Protected Cell’s Park Tenant Agreement, which serves as the operative document defining the relationship between the Protected Cell, ie, an approved applicant, and the RTPark. Each RTPark application requires payment of a USD2,500 application fee.
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