• Legal firms employ 535 people and contribute US$129 million in gross value added to the BVI economy
• The BVI has a ‘legal framework renowned for quality, confidence and stability’
The British Virgin Islands’ legal services and legal framework is helping to drive over US$1.5 trillion of investment globally, according to a detailed report published today.
Based on the strength of the BVI’s legal framework, the report describes the BVI as ‘a leading centre specialising in the incorporation of vehicles for cross-border business and accompanying company law and legal services.’
It also finds that the legal sector is the second biggest employer in the BVI’s international business and finance centre with 535 people and the largest gross value added contributor at US$129 million.
The report, Creating Value: BVI’s Global Contribution, undertaken by Capital Economics, an independent economics consultancy, analyses the significant global economic contribution of the BVI. It finds that the BVI mediates over US$1.5trn of cross-border investment flows, the equivalent to 2% of global GDP.
The report – the first of its kind – also finds that over US$15bn of tax revenues are generated annually for governments around the world, via investment mediated by the BVI and the resulting economic activity. The UK (US$3.9bn), the EU excluding UK (US$4.2bn) and China and Hong Kong (US$2.1bn) are the largest beneficiaries of this tax generation.
Commenting, Lorna Smith, OBE, Interim Executive Director of BVI Finance said:
“The report highlights how the BVI’s legal framework and legal services have played an integral role in the jurisdiction becoming a global bastion for cross-border trade and investment.
“Furthermore, the report highlights how through its framework of common law, a highly regarded commercial court and ultimate right of appeal to the Judicial Committee of the Privy Council in London, the BVI is an extremely attractive destination for conducting international business.
“As well as the legal framework and innovative company law, as exemplified through the International Arbitration Centre, the report outlines the quality of legal services available. In particular, it highlights the specialism in litigation, dispute resolution and legal support to cross- border commercial transactions and activity.”
Peter Tarn, Board Member of BVI Finance and Partner at Harneys added:
“Through its companies and its courts the BVI provides a vital risk allocation and dispute resolution platform based on neutral, predictable and accessible laws.
“Demand for this has placed the legal community at the heart of the BVI economy in a way which is true in few other places in the world. Lawyers will undoubtedly continue to be central to the development of the international business and finance centre in the BVI but other professions and technologies have important roles to play as well.”
Commenting on the key findings of the report, Mark Pragnell, Head of Commissioned Projects at Capital Economics and the report’s author said:
“The BVI provides the legal structures that allow companies, institutions and individuals to safely and efficiently carry out their business and make investments across international borders.
“The ‘BVI Business Company’ is a widely used and dependable vehicle to facilitate cross- border trade, investment and business. Over 140 major businesses listed on the London, New York or Hong Kong main stock exchanges use BVI vehicles to support their international investment activities. Similarly, major international development banks, such as the World Bank’s International Finance Corporation, use BVI Business Companies to help fund vital projects.
“Our report shows that the BVI is a global powerhouse for cross-border investment equating to a conservatively estimated $1.5 trillion across its 417,000 active BVI Business Companies.”