US VIRGIN ISLANDS Trends and Developments Contributed by: Marjorie “Jorie” Roberts, Sean Foster, Alexander Polinsky and Duncan J. J. Kessler, Marjorie Rawls Roberts PC
States” wherever the latter appears. Consequently, the income tax provisions of the Code, the Treasury Regulations promulgated thereunder, and revenue rul - ings and revenue procedures issued by the IRS are generally applicable in the USVI, with certain limita - tions. As a US territory, the USVI occupies a unique status: although it is part of the USA, it has been granted authority by the US Congress to enact special tax laws to encourage investment in business operations. The USVI offers many opportunities for investors who seek a politically stable jurisdiction with targeted eco - nomic incentives, legitimate protection of their assets from taxes, and an enticing location with excellent telecommunications. Benefits for family offices, investment managers, venture-capital management, and investment banking and similar businesses Overview of USVI economic incentive programmes The infrastructure to support family offices and invest - ment and consulting businesses in the USVI has large - ly been in place since 1986 through the Economic Development Authority (EDA) and its various invest - ment programmes and their predecessors. The Eco - nomic Development Commission (EDC) programme, administered by the EDA’s seven-member Board, offers exemptions and reductions to entities qualified as EDC beneficiaries, and offers reductions to direct and indirect owners of entities qualified as EDC ben - eficiaries if the owners are bona fide residents of the USVI. Businesses can also qualify for tax incentives under the Research and Technology Park (RTPark) pro - gramme, which seeks to support the USVI’s expand - ing technology and knowledge-based sectors to pro - mote the growth, development and diversification of the USVI economy. In addition, the RTPark works to broaden the capabilities of the University of the Vir - gin Islands (UVI) by providing it with financial support and training opportunities for UVI students and creat - ing a supportive research environment that combines the resources of UVI with those of the public sector and private industry. Oversight of the RTPark pro - gramme is vested in the seven-member RTPark Board of Directors (the Board), which has the authority to
review and approve or disapprove applications from potential beneficiaries, referred to under the RTPark programme as “Protected Cells”. The RTPark programme is ideal for applicants engaged in energy and research and system devel - opment, business process outsourcing and financial technology, especially where technological resources are critical elements. By way of illustration, RTPark beneficiaries currently operate in such areas as data analytics, e-commerce, software development and licensing, technology-based management and busi - ness process services, block chain and crypto, inter - net advertising, telecommunications and information technology, financial technology and medical device technology. Additionally, the USVI legislature enacted in 2020 the Virgin Islands South Shore Trade Zone Act (SSTZ), which designates approximately 3,000 acres in the “south shore” area of St Croix. This area features a deep-water port, is a short distance from the Henry E. Rohlsen Airport, and has established roads and utility infrastructure. The SSTZ formally adopts this area as an “Enterprise Zone”. The goal of the SSTZ is to establish a business zone that eliminates traditional barriers to commercial trade and investment in support of industries such as light manufacturing, trans-shipment, agricultural sector, micro-manufacturing, industrial development and the territory’s green and blue economy sectors. Other economic incentive programmes managed by the EDA include the Enterprise Zone Tax Credit Pro - gram (EZTC) and the Sustainable Tourism Through Arts-Based Revenue Streams (STARS) Act. The EZTC seeks to revitalise blighted or distressed communities in certain designated zones and encourages collabo - ration among private, public and non-profit entities. Each designated area has a specific list of targeted sectors or industries that apply to that area, such as tourism or hospitality businesses, “Greenbelt” start-ups, technology start-ups, or cultural and crea - tive industries, among others. Economic incentives include various gross receipts or income tax credits for various expenditures, building construction or improvements, job creation or business activities as
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