US VIRGIN ISLANDS TRENDS AND DEVELOPMENTS Contributed by: Marjorie (Jorie) Roberts, Sean E Foster, Renée Marie André, David Bornn, Lisa M Wisehart and Duncan J J Kessler, Marjorie Rawls Roberts PC
only required to employ five full-time employees, and the EDA has the authority to lower the five- employee minimum or to permit a business to have several years to meet the five-employee minimum upon a showing of good cause. A full- time employee is someone who works at least 32 hours a week. A beneficiary must post all positions with the USVI Department of Labor (DOL) and must notify the DOL when positions are filled, among other reporting requirements. At least 80% of the beneficiary’s employees must be USVI residents, unless a waiver is granted. Beneficiaries must purchase goods and services locally when available, make certain contribu - tions to scholarships and public education, and provide a plan for civic participation. Beneficiar - ies must also provide employee benefits and enact a management training programme. The application process requires a detailed application, including details of the beneficiary’s ownership, financial information and a back - ground check for beneficial owners with more than a 5% interest. Submission of the applica - tion is followed by the application’s presentation at a public hearing before the EDC commission - ers and a review of the application by the EDC commissioners. Since 2020, the public hearings have been held virtually and the EDC has not yet indicated when public hearings will return to being in person. Upon approval by the EDC, benefits are avail - able for initial periods of 20 years for investments on the islands of St Thomas and St John, and for 30 years on St Croix. Beneficiaries that make an additional investment in the beneficiary business in infrastructure, new construction or refurbish - ment during the term of their existing certificates may be entitled to extensions of their benefits upon the expiration of their certificates. Separate
from the above options, a beneficiary may seek an extension of 100% of benefits for an addi - tional ten years on the same terms. In 2016, an International Financial Service Entity (IFSE) category was added to the list of busi - nesses eligible for benefits. An IFSE must also be licensed as a bank pursuant to the Interna - tional Financial Services Center Regulatory Act administered by the Division of Banking, Insur - ance and Financial Regulation in the Office of the Lieutenant Governor. In recent years, new hotel applicants under the EDC Program have committed to constructing low-density developments, including “glamping” style accommodation designed to promote envi - ronmental sustainability and low-impact con - struction. Other hotel beneficiaries have restored historic structures in the USVI to showcase local culture and traditions. Hotel Development Program The Hotel Development Act (HDA) Program is also administered by the EDA, and was initially passed in 2011 to provide a means for financ - ing new hotel development projects (and hotels seeking substantial upgrades) in the USVI. In 2019, the HDA Program was amended to pro - vide for the development, construction, recon - struction and renovation of commercial facilities and other hotel facilities. The hotel room occu - pancy tax (HROT) can now be 100% utilised by developers of new hotels, or up to 50% of the HROT for existing hotels where at least 70% of the units were previously damaged – by hurri - canes, for example – for the development, con - struction, reconstruction and renovation of the facility. The 2019 amendment also provides for the imposition of an economic recovery fee (ERF)
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