US VIRGIN ISLANDS Trends and Developments Contributed by: Marjorie “Jorie” Roberts, Sean Foster, Alexander Polinsky and Duncan J. J. Kessler, Marjorie Rawls Roberts PC
seek an extension of 100% of benefits for an addi - tional ten years. RTPark programme requirements In most cases, an applicant, through a legal repre - sentative, negotiates the terms of its 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 applicant), the appli - cant’s obligation to pay annual management fees to the RTPark (typically between 1% and 2% of the applicant’s gross income), the structuring of a charita - ble donation to UVI (which can include scholarships, internships, faculty support, funds for specific pro - grammes and in-kind contributions of time, typically starting at a total of USD35,000 annually) and the per - centage and characteristics of an equity interest to be awarded to the RTPark (which is typically non-voting with no on-going distribution rights). The payments are typically based on the size of the applicant and its projected financial revenues. 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 cov - ers the applicant and its owners. After the application is submitted, the RTPark conducts a due diligence review, which includes a background check. The final terms are memorialised in the Park Tenant Agreement, which is executed by representatives for both the applicant and the RTPark and serves as the operative document defining the relationship between the Pro - tected Cell and the RTPark. Each RTPark application requires a USD2,500 application fee and a USD2,500 background check fee that covers up to two owners. Benefits under the RTPark programme are initially available for 15 years and can be renewed for an ini - tial renewal period of ten years, followed by subse - quent renewal periods of five years, subject to Board approval. Legislation for online gaming and sports betting markets The USVI Casino Control Commission (CCC), which oversees the two licensed casinos in the USVI, is also calling for updated legislation to allow the USVI fully to
participate in online gaming and sports betting mar - kets. The Casino Control Commission is also calling for updates to the USVI’s Internet Gaming and Gam - bling Act of 2001. The United States’ sports betting revenue reached USD13.8 billion in 2024 as identified by the CCC’s Chair. Legal requirements for tax incentives The USVI can grant tax benefits on any USVI source income and on certain income that is effectively con - nected with a USVI business, such as non-US source dividends, interest and royalties. USVI source income includes fee income for services performed in the USVI. Capital gains realised by a USVI business may also be eligible if certain requirements are met. Residency requirements The EDC and RTPark programmes provide personal tax benefits for bona fide USVI residents on their allo - cations or dividends. To be a bona fide USVI resident, a person must meet one of five alternative physical presence tests each year, have a closer connection to the USVI than any other location, and have a USVI tax home. The most-used “physical presence” test involves being in the USVI for all or part of 183 days in a given year. However, individuals who travel frequently can satisfy the physical presence test by spending no more than 90 days in the USA each year or by not having a significant connection to the USA at any time during the year (and specifically not having a home, voter’s registration or a spouse or minor children located in the USA). The establishment of a “closer connection” to the USVI involves such factors as hav - ing your primary home in the USVI, filing returns in the USVI as a USVI resident, obtaining a USVI driver’s licence, registering to vote and voting in the USVI, having a USVI bank account, etc, although no single factor is determinative. A “tax home” is the location of an individual’s principal place of business. In most cases, the individual must be a bona fide resi - dent of the USVI for the entire year to obtain benefits on their income from a benefited business, although there is a “year of move” rule permitting individuals to be bona fide residents if they move to the USVI in the
672 CHAMBERS.COM
Powered by FlippingBook