Will the BVI’s Resilience Ensure It Remains Relevant in the World of Offshore?

  • Written by Kate Mullan
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Back in 2013, after the data leaks involving the British Virgin Islands’ Financial Services Industry were published by the International Consortium of Investigative Journalists and pressure on the offshore industry from G8 leaders mounted, the public opinion of the industry and the BVI as a jurisdiction seemed rather bleak. OIL’s Offshore 2020 Report, then in its 4th year, revealed that the industry believed the BVI would slip in the rankings of the offshore sector’s top jurisdictions, as confidence was lost. The BVI, however, has proved its resilience.

Traveling between Dubai and the Cayman Islands, Business BVI caught up with Simon Filmer, the Deputy Group Managing Director at OIL, on his most recent visit to the BVI. Simon has been involved in the BVI’s Financial Services Industry for the last 16 years, but all together has lived in the BVI for 22 years. He joined OIL in 2013 and he has been on secondment to Dubai since March 2015. A significant development in 2015 for the Vistra Group, of which OIL is a part since merging back in 2011, is that they are currently in the process of changing ownership, having recently been acquired by Baring Private Equity Asia.

OIL’s leading market research, the Offshore 2020 report, is now in its 6th year. The full report will be released in the coming weeks, with presentations to be conducted in the BVI in January 2016. In advance of the release, we delved into some of the findings with Simon, as well as examining what the future holds for the offshore world and the BVI’s place within it.

Business BVI: Whilst Business BVI had an exclusive look at the report in September at our Hong Kong conference, when will it be released to the general public?

Simon Filmer: OIL’s Offshore 2020 report will be released to the public within the next month. This year, we have tried to deliver a more rounded report on the offshore industry, including speaking directly with people who criticize the industry and don’t support or see its benefits. We have tried to use this as an opportunity to address their concerns in a constructive way. What started as a very Asia focused review 6 years ago, has grown global with input worldwide, as participant numbers continue to grow year on year.

A key take away from this year’s report showed that respondents felt the BVI will remain relevant and resilient as a jurisdiction over the next five years.

BB: Respondents in the report see Common Reporting Standards being implemented globally and a central registry of beneficial ownership being very likely to occur over the next 5 years; what impact will this have on the BVI?

SF: The BVI has done a very job good at evolving standards and keeping pace with regulatory changes over the year, but now is a particularly significant time.

There are decisions to be made, there are changes that will be coming and it is critical as to how these changes are implemented and communicated to clients, and how the jurisdiction will continue to operate.

OIL has predicted that a non-public central registry of beneficial ownership will become a global standard within the next 5 years, and it could be a game changer. The public register of beneficial ownership that is currently being pushed by the UK is not realistic, nor is it an international standard. Importantly, our report shows that a majority of respondents think that new regulatory changes are political and will be applied inconsistently..

The BVI’s government, regulator and private sector have done very well at working together over the past 30 years to provide the best solutions for the industry – a task that is not easy in the current climate.

BB: By 2020 it is estimated in the report that the BVI and the Cayman Islands will drop slightly down the ranks of the top jurisdictions, what factors have influenced this?

SF: Negative perception of small offshore jurisdictions like the BVI and Cayman certainly plays a part in respondents’ predictions that ‘mid-shore’ jurisdictions (a term that OIL coined over the last few years) will eventually overtake the BVI in the rankings by 2020.

In the past, offshore jurisdictions were perceived as having light regulation, which is less the case now, but public perception is hard to change; it's too easy for the media and public to make jokes about sunny places for shady people. In comparison, mid-shore jurisdictions are larger countries with an element of offshore but without the stigma, which is used to their advantage. Clients and informed policy makers do understand that quality jurisdictions like the BVI are more strictly regulated than mid-shore jurisdictions such as Hong Kong, the UK, the US, New Zealand, etc.

Another important factor to take into consideration is that there is a global convergence of regulations and standards, unlike anything the industry has seen before, narrowing the differences between jurisdictions.

BB: On this new playing field, what will make jurisdictions stand out?

SF: A term OIL coined this year is the ‘super jurisdiction’, these are jurisdictions which fulfil the three criteria of being a client originating geography, a market where clients go to conduct their business and also a jurisdiction itself, all in one. Hong Kong, Singapore, the UK and the UAE are all examples. Super jurisidictions have an advantage over offshore centres like the BVI, as they can provide substance to structures, (important in the current regulatory environment), and clients can live and work there too, with their families

The BVI needs to focus on its unique selling points, what makes it stand out from other jurisdictions? Will it be competitive pricing? Its innovative and modern legislation? Its experienced staff and service levels? It needs to speak up for itself as the world’s largest offshore corporate domicile.

BB: What can the BVI do to continue leading the industry?

SF: The BVI must take charge and change the argument about offshore; we must collectively show the fiscal, financial and social benefits of the jurisdiction. Critics have quite nuanced and persuasive arguments against the offshore industry and the BVI needs to become more articulate about the positives of offshore and our own relevance in the industry.

The BVI is a strong and resilient jurisdiction that people continue to use. The current BVI Government has made a high level commitment to the Financial Services Industry, and that is greatly welcomed. However, we do need to see action from the Financial Services Implementation Unit off the back of the McKinsey report. It can’t just be lip service; the time to make progress is now.

In order to remain a strong and competitive jurisdiction, the BVI must retain a top-level professional work force, both training locally, as well as attracting talent from overseas.


As Business BVI wrapped up the interview, Simon made a resonating comment that the BVI needs world-class people on the ground and overseas to really show that we mean business.

Now is the time for the BVI to prove its worth to the industry; our people are what will set us apart.

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