“Pursuing Global Success with BVI as Your International Partner of Choice”
Business BVI Asia Trade Mission Remarks By
Dr. the Hon. D. Orlando Smith, OBE,
Premier and Minister of Finance
The British Virgin Islands
21 October 2016
Good day ladies and gentlemen.
It is a pleasure to be here in this magnificent city which boasts the best of China and exemplifies the ambitions of China’s go global strategy.
This is my first time to this region of China, and I am thoroughly impressed with the city’s organization, its infrastructure, its strategic outlook, and perhaps most of all the tenacity of its people.
Earlier today, my Government Officials signed a strategic cooperation agreement wth the Administration Commission of Tianjin Binhai New Area. This will pave the way to strengthen Chinese enterprises’ investment, promote economic and trade cooperation; as well as greater cooperation between the financial industries of both regions.
Over the past couple days I delivered two addresses in Hong Kong and Beijing at two similar events under the theme Strategies for Global Success with BVI as your International Partner of Choice. Perhaps no other city is more fitting for that thematic engagement than Tianjin, therefore I wish to continue my remarks in this same vein.
You see on the heels of signing the agreement, it is very fitting that we begin to discuss strategies for our mutual global success. Let me explore a few of these with you…
Firstly, we should build on our proven successes and adapt them to new engagements.
It is fair to say that BVI has become the international partner of choice for China, over the past 25 plus years. This success has been rooted in my government’s unwavering commitment as well as that of our service providers; to service the financial services needs of this nation. It is therefore imperative that as we develop this new relationship, that we be equally committed to this new region.
This is precisely why as the Premier and leader of my country I am here today -- to express to you personally my Government’s commitment to strengthening and developing our new relationship.
This is why some of our private sector financial services practitioners are here with me today -- to express to you their support and desire to help you achieve your strategic objectives. This mutual cooperation and commitment have worked well in other regions of China. It is therefore our expectation and intention to continue this collaboration into the future,so that we can move forward together.
Two other key successes that we must build on is; BVI’s company formation regime and its technological platform. BVI companies worldwide continue to command a large market share with over 430,000 that are active. The reasons for their popularity include security of assets, ease of operation, competitive pricing and maintenance and control facilitated by flexible corporate features.
The BVI has for many years had one of the most innovative and efficient systems of incorporating companies, VIRRGIN, and is a global leader in this regard. Incorporations can take place within one or two days, and VIRGGIN filing procedures have recently been streamlined even further.
VIRRGIN Lite was launched earlier this year to allow users located in Hong Kong to have external access to the online Registry system from outside the BVI. Among the services, certificates of good standing and certificates of incorporation can now be collected in this region, at our offices in Hong Kong. Essentially, we can now meet your requirements in your time zone.
In building on our successes, we will with the help of our corporate service practitioners, provide the corporate structures that will help build your factories, your ports and other infrastructure, the structures that will help to plan your wealth, finance your deals and insure your risks. And we will do so using our cutting edge incorporation system VIRRGIN, to ensure that your needs are efficiently met.
Secondly we must continue to look outward for growth as with the China’s Go Global Strategy and its Belt and Road Initiative.
You see, it is my firm belief that the future, our futures, the growth of our economies, depend on continued globalization of trade and opening of markets around the world. However, the world is changing and many sectors and nations are seemingly shunning the concept of globalization. In fact, we seem to be at the crossroads of protectionism.
Today, the world watches nervously as even in the US its presidential candidates on some level have touted some form of protectionism, whether it is regarding the US-China trade deficit or the rolling back of the Trans-Pacific Partnership agreement.
But globalization has worked for our world.
Globalisation has been by far the greatest driver of human progress. Over the past decades, it has caused poverty levels to decrease and middle class to rise. Hundreds of millions of human beings in every corner of the planet – including in our Caribbean region and in the BVI – have been lifted from grinding poverty and given opportunities.
Thanks to this movement, the blessings of infrastructure, health care, education and a high quality of life and other basic needs are being met for more people in more places than at any time in history and it is all thanks to our interconnectedness.
Globalisation has also impacted and influenced the regulatory system and standards. Over the past 20 years regulatory standards have improved and become globalized as standard setters such as the OECD and FATF have worked to make international financial centers operate at a level and transparent playing field. For any banking and financial transactions high regulatory hurdles, including AML must be met, in order to To do business in the global arena, you must be top quality and comply with the highest regulatory standards.
I would hasten to add that BVI does in fact comply with these global standards and has been doing so for many years.
Globalisation has also caused jurisdictions like BVI to serve as the wriing in the global economy. The fact that today capital that sits in New York, and London, and Tokyo, and Frankfurt, and Dubai and other financial centres around the globe can be pooled and put to use to build a factory in Uganda; or a bridge in Bolivia; or start a business in Tianjin – that has unleashed progress for people the world over.
Without offshore jurisdictions, global capital would struggle to be put to good use outside of national borders. If capital from multiple nations is to come together for a common purpose, it must be able to incorporate. Jurisdictions like the BVI have risen up over the past decades precisely to create a neutral space where capital from all over the world can come together and be deployed for a common purpose.
We therefore must resist the swelling tide towards protectionism and look outwards for growth and development
A third strategy that we should employ towards Global Success is to Innovate and Evolve; and do so incessantly.
The very idea of Tianjin Binhai Area is in itself an innovative concept that has proven successful in other areas and zones in China. I commend you for pursuing this innovative idea with vigour, and I also comment your many achievements thus far.
BVI too has recognized the need to innovate and evolve in order to achieve global success. You see, a year ago we launched the BVI Forward campaign, a far-reaching set of initiatives aimed at further strengthening the financial services sector and building greater awareness of the benefits derived from it.
BVI Forward introduces new services to benefit clients. This initiative evolved from an in-depth study of the Territory’s financial services sector, which was commissioned by the Government in 2014 and facilitated by global consultancy firm, McKinsey & Company.
One of our key initiatives of the programme is to attract more value added services into BVI. We wish to pursue areas such as small corporate headquarters and family offices, ecommerce, green tech, maritime operations, etc. Ultimately, we wish BVI to be a more substance-based company.
To support this, we have reviewed our immigration and labour laws to create greater efficiency in processes, as well as facilitate streamlined entry of business visitors and qualified investors. We expect to implement these changes in 2017.
Similarly, my government has recently approved the development of an investment policy to encourage greater investment in the Territory.
The BVI has also introduced a new Limited Partnership Bill that provides customized legislation for the formation and operation of limited partnerships. The bill, which will become law in early 2017, will introduce a modern, up to date and business friendly approach to limited partnerships.
In addition, to further augment our systems for dispute resolution, beyond the traditional court system, I am pleased to tell you that a new International Arbitration Centre is soon to become fully operational. This has been established to provide essential dispute resolution services on behalf of parties that choose to settle their disputes through arbitration in the BVI.
Let me take a moment to put in context a further important innovation that BVI is undertaking.
The issue of correspondent banking and the difficulty of opening and maintaining accounts is a potentially destabalising systemic issue which demands an innovative solution. This is because although the issue is now getting some attention from national and global organisations such as the US Office of the Comptroller of the Currency, the IMF and even closer to home by the Hong Kong Monetary Authority; it remains perhaps the most significant current threat to many economies.
For BVI it therefore requires a timely and innovative solution. I am delighted to support the launch of the new Bank of Asia in the BVI to help in this regard. The bank will be launched early in the New Year with the most advanced, cutting-edge technology and will be dedicated to filling a substantial market void to the benefit of the BVI and incorporated business companies.
I believe the Bank of Asia will play a key role in the development of a new global financial infrastructure, in parallel with China’s building of roads, railways and logistical support. I also believe that Bank of Asia can play a key and important role by moving out into the world to help reshape business and finance. You will be hearing more about Bank of Asia later at this conference and in the months to come
We expect that our innovation and evolution that BVI is undertaking and whch I spoke about for the past few minutes, would in turn support the global success of you—our newest strategic partner.
Beyond the financial services sphere, in Latin America and the Caribbean, there is a lot of Chinese business activity. On the logistics side there is a new canal being constructed in Central America, deep water and port development in Trinidad & Tobago and Brazil, and airport construction in Antigua. China’s reach into the world is growing and welcomed in many regions.
Ladies and Gentlemen, three years ago, BVI decided to “Go China”. Although we have been here for decades through our structures and service providers, we strategically established an office in Hong Kong – to allow us to be more responsive and deal with issues in real time and why we continue to engage with you at every turn.
Since then, today marks the 3rd strategic type cooperation agreement that we have signed with different area governments in China.
As the BVI and its business offer has evolved we have, in turn, observed China’s own plans and in particular the development of the long-term Go Global strategy, including the Belt and Road initiative and the plans that run alongside it. While the programme is of significant scale we believe that there are many ways in which the BVI can be a partner.
For example, in 2013 alone BVI companies enabled the investment of $82.5 billion into emerging market economies. I believe that speaks to the scale of expertise and the skills we have in the BVI who can assist you and it is my very firm hope that through this visit and the conversations that flow from it we can demonstrate how we can best support you in the future.
The BVI remains the gold standard in easy to use, easy to maintain IBCs and is at the forefront of regulatory compliance with the OECD, FATF, and other global standard setters. Just as the BVI has been instrumental in FDI flows into China, assisting that country become the most prominent market globally, the next decade or two will see the BVI work with the PRC as FDI flows reverse. China has already overtaken the US as the largest source of global M&A.
Our message on this mission is simple and clear. The BVI/China partnership has been one of success over the last quarter century. And today we have taken yet another step towards mutual global success with Tianjin.
In concert with one of the goals of One Belt, One Road policy I am happy to be a part of creating and enhancing of people-to-people bonds. I believe that in our relationship with you we clearly demonstrate the benefits that such bonds can bring to the enduring friendship between our two countries and I hope that through events such as today those bonds will only deepen.
BVI continues to be one of the world’s leading financial centres, and will continue to be so for the foreseeable future. In partnership with industry, we remain focused on what matters most – creating value for all industry stakeholders including businesses, investors, service providers and the people of the BVI.
That has been our recipe for success for decades and nothing that has occurred will change that. We have seen controversy come and go in the past. We will see it again. And always, we endure by remaining fixed on the fundamentals. That is how we serve not only those we represent, but the many who benefit from our industry throughout the world.
I leave you with the hope that as we gather today at this first BVI Tianjin event, we follow China’s leadership in Going Global, embracing globalization and the potentials it offers for more progress and a world economy that truly works for everyone. I look forward to the discussions to follow during the course of this afternoon.