Virgin Islands Law Blog

Virgin Islands Law Blog

U.S. Virgin Islands law & politics

Protecting Your Business and Personal Devices in the Wake of WannaCry

Posted in Corporate & Financial Services

A major cyberattack recently hit about 200,000 computers across more than 150 countries, with an especially considerable effect on individuals with older computers and operating systems, as well as large organizations and universities.

The attack was performed via malware that has since become known as “WannaCry,” which was created and published by a hacker group called Shadow Brokers. It developed the malware from tools that were originally created by the U.S. National Security Agency— one of the reasons it was so effective.

In the attack, the system would lock down certain files and then demand $300 in Bitcoin, a digital currency, within six hours to receive instructions to restore those files. The attack resulted in more than $40,000 being paid out, according to Bitcoin transaction tracking company Elliptic. The hackers have not yet been caught.

Mitigating the impact of a potential attack

In the wake of such an event, it is important to remind all users of the importance of digital and device security. Below are a few steps you can take to protect all your personal and work devices and the information stored on them.

  • Back up all data: You should make regular backups of all your files, data and programs. At least once a month is a good baseline, but weekly is a better option to ensure you will not lose too much in the event of a ransomware attack.
  • Make regular updates to antivirus software: New malware is constantly being created to exploit vulnerabilities in networks and devices. Thus, antivirus software must regularly be updated so your computer is able to address any potential viruses that attempt to attack it. Microsoft and other large software companies also release patches for other programs that address known vulnerabilities.
  • Regularly update your operating system: Windows, for example, has regular updates it releases. If you get a message on your computer telling you there is a new update and you must restart to install it, do not delay for long—these updates are critical for preserving the security of your computer and all the data on it. If you are using an older operating system, continue updating to a new one to ensure you have access to the security features and updates you need to stay protected. Windows 8.1, for example, will have limited support as of January 2018, making an upgrade to Windows 10 highly advisable.
  • Have processes in place to address cyberattacks: It is important to be prepared for any cyberattack that could affect you or your business. Have a company-wide policy that addresses steps to take in the event of an attack, and make sure your employees are familiar with them.
  • Consider security of outside partners or vendors: Even if you are not directly hit by a cyberattack, your company could still be affected if one of your key suppliers or vendors becomes a target. When looking for such partners, make sure they are prepared to handle any potential cyberattacks.

If you have any questions about cybersecurity and the legal liability associated with it, consult a dedicated attorney in the U.S. Virgin Islands.

 

Ravinder S. Nagi is Assistant Managing Attorney at BoltNagi, a respected and well-established intellectual property and business law firm that serves clients throughout the U.S. Virgin Islands.

Federal Lawmakers Look to Repeal Estate Tax

Posted in Tax & Estate Planning

Throughout the 2016 campaign, then-candidate Donald Trump repeatedly voiced his distaste for the estate tax, which he and the others who oppose it have taken to calling the “death tax.”  Although no legislation to repeal the tax has been proposed in Congress over the past few months, it certainly seems likely that lawmakers will try to move forward with a measure sometime soon.

The “death tax” pejorative refers to the idea that the tax is effective upon the death of the estate owner. Critics of the estate tax say this essentially means that people’s estates lose money simply because they pass away, unfairly preventing their heirs from inheriting the full value of those estates.

It’s worth noting that the estate tax affects only a small percentage of wealthy American families, and contrary to some criticisms, it has no discernible impact on most owners of small businesses.

According to data from the Tax Policy Center, there are only about 20 small businesses and farm estates in the country that paid any estate tax in 2013. Those that were affected paid an average rate of just 4.9 percent of the estate’s total value.

President Trump has said that “a lot of families go through hell over the death tax,” but additional information from the Tax Policy Center reveals that there were only about 4,700 total taxable estates in 2013. To that end, approximately one in 550—out of the 2.6 million people who died that year—had to deal with the estate tax at all.

In addition, approximately 90 percent of the amount of money collected from the estate tax is paid by the top 10 percent of income earners, with the richest one-tenth of a percent paying more than 25 percent of all estate taxes. As one can see, it’s an issue that largely is only relevant to the very wealthy.

What happens if the estate tax is repealed?

President Trump has already hinted to his plans if the estate tax were to be repealed. Under this plan, beneficiaries would pay a capital gains tax on any assets they sell based on the original cost of those assets. In some circumstances, this tax could be quite low. If, for example, someone purchased a share of Apple stock at a low price years ago, and that stock is now worth significantly more, the tax would still be based on the original price.

Therefore, while there is a slight trade-off involved, wealthy people currently affected by the estate tax would likely come out paying less under Trump’s plan.

The problem proponents of the estate tax have with this is that the tax affects so few people that repealing it does not make much sense. The tax currently generates extra revenue without the need to implement more taxes on lower- and middle-class Americans.

If you are interested in how a repeal of the estate tax could affect you, your business and your estate planning process, meet with a skilled U.S. Virgin Islands estate planning lawyer.

 

Steven K. Hardy is Chair of the Corporate, Tax & Estate Planning Practice Group at BoltNagi, a respected and established tax and estate planning law firm serving individuals and businesses throughout the U.S. Virgin Islands.

Business Leaders Push Trump Administration for Quicker Approvals, Simpler Regulations from EPA

Posted in Government Relations

Various industry groups in the United States are pushing The Trump Administration for a faster permit process and simplified environmental regulations.

Many of these groups are associations representing industries such as drilling, mining, refining and building. These associations have submitted hundreds of pages of documents to the Environmental Protection Agency (EPA) and the U.S. Commerce Department, outlining certain regulations they wish to see either eliminated entirely or at least significantly modified.

The EPA has been the target of most of these suggestions. President Trump has already signed executive orders in just his first few weeks in office geared toward cutting regulations that he believes to be a burden on certain industries. Many Obama-era protections to the environment have been rolled back or eliminated, including those geared toward combating climate change. Most recently, Trump backed out of the Paris Climate Accord in a move he justified as being beneficial for American businesses.

The reforms implemented on EPA regulations have been the subject of public debate, with many individuals and groups regarding the proposed (and implemented) rollbacks as possible threats to public health and the environment. However, many business groups have embraced the plans to boost growth across numerous industries.

The focus among industry groups

Numerous industry organizations have been focused on making the permitting process for installations and facilities easier. For example, some have pushed for the Trump Administration to decline a previously planned tightening of ozone rules laid out in the U.S. Clean Air Act’s National Ambient Air Quality Standards. Opponents of these stricter regulations claim they would make it difficult to implement new operations and facilities.

Other groups have said that certain requirements under the Clean Air Act as being redundant and unnecessary. These include the Maximum Achievable Control Technology rules, New Source Performance Standards and the National emissions Standards for Hazardous Air Pollutants.

According to a representative from the National Association of Manufacturers, industry groups had one proposed change that would have replaced eight different regulations with one that achieves the same result environmentally, but at a reduced cost for compliance.

On the other hand, environmental groups and others have voiced their concerns regarding how such changes could undermine environmental protections. The EPA’s official comment period for these proposals ended May 15.

Business groups will continue to push for fewer regulations under the new administration, and the administration appears to be willing to listen. There is the potential for growth in some industries, but businesses and individuals in others may wonder what sort of environmental impact these changing regulations could have.

 

Tom Bolt is Managing Attorney at BoltNagi, a widely respected business and government relations law firm focused on serving clients throughout the U.S. Virgin Islands.

How to Conduct Due Diligence When Buying a Business

Posted in Corporate & Financial Services

As you prepare to purchase a business, you must perform due diligence when it comes to reviewing and researching all available information related to that company. The goal with this research is to ensure you will not be surprised by any financial or legal issues if you decide to go through with the deal.

Below are some of the specific considerations that you should focus on while conducting due diligence:

Finances

Review all the audited financial statements you can get your hands on. You should also carefully analyze balance sheets, cash flow statements and income statements, along with any tax returns filed within the last five years.

In reviewing all these documents, you should be able to determine whether the business was collecting its accounts receivable in a reasonably timely manner, if it was paying off its debts, the kind of margins it was running, how much bad debt the business was writing off and whether there were any outstanding liens on the company, among other issues.

Legal issues

Analyze all the company’s professional and consulting agreements, licenses, permits, insurance policies, lawsuit-related documents and any documents related to intellectual property. It’s important to be sure all existing agreements are enforceable, that the company has the rights to its intellectual property, that the business has been appropriate insured and that all licenses and permits are current.

It is also good to get a heads up about any pending legal action involving the company.

Structure

The structure of the business could affect your decision to purchase it. If it is a corporation, for example, you should ask for a copy of the bylaws, articles of incorporation and meeting minutes from shareholder or board meetings. You specifically want to make sure the business complies with all regulations relating to its structure, that the business structure is in line with your plans for the company and if you will need to buy out any shareholders after making the deal.

Employees

Get copies of employee handbooks, agreements, wage information, benefits plans, non-compete or non-disclosure agreements and any other contracts the company has with its employees. You should be on the lookout for any ongoing disputes with employees or whether existing policies make it more likely that employees will sue the company at some point. 

Operations

Get lists of all customers, vendors and suppliers, along with any operations manuals the company might have. Using this information, you can consider the types of inventory systems the company has implemented, the diversity and growth potential of its customer base, the type of equipment and infrastructure the company has in place and how much diversification is in the company’s supply chain.

For further guidance on due diligence before buying a company, work with a skilled U.S. Virgin Islands corporate planning attorney.

 

Steven K. Hardy is Chair of the Corporate, Tax and Estate Planning Practice Group at BoltNagi, an established and respected business law firm serving clients throughout the U.S. Virgin Islands.

Checklist for Hiring a New H1-B Visa Program Employee

Posted in Labor & Employment

American businesses that require highly skilled workers have the option of looking at international candidates who are working in the United States on a visa or who are graduating from an U.S. college. This is made possible through the H-1B visa program.

There are a few steps in the H-1B process for hiring foreign nationals who are already in the country. These steps include:

  • Establishing the prevailing wage for the position: The prevailing wage is determined by the statistical average pay for workers performing the same job in the same area.
  • Filing a Labor Condition Application: You must file this form with the U.S. Department of Labor, verifying that your proposed hiring of the H-1B worker fulfills the requirements for wages and working conditions.
  • Filing a Petition on Form I-129: This document is filed with United States Citizenship and Immigration Services (USCIS).

Form I-129: More information

The process of preparing and filing the H-1B petition (Form I-129) may be the most complicated part of the process. To accomplish this, the employer must include certain information with the application, including:

  • The Form I-129 Petition for a Nonimmigrant Worker, H Classification Supplement to Form I-129, and the H-1B Data Collection and Filing Fee Exemption Supplement, the first two of which require signatures.
  • A letter of support from the employer confirming their job offer to the potential foreign employee and outlining all terms and conditions of the arrangement.
  • Copies of the foreign worker’s immigration and identification documents, as needed. These documents could include their passport, visa, USCIS Forms I-797, I-94 Arrival/Departure Record, and/or SEVIS Form I-20 (for F-1 students).
  • Copies of all transcripts and educational degrees of the foreign worker. U.S. equivalency evaluation reports are required if the degrees and transcripts are from another country.
  • Documentation proving the foreign worker has lawful status in the United States.
  • A base filing fee (visit www.uscis.gov for current fee information).
  • Fraud prevention fee and ACWIA fee, unless an exemption applies to the foreign worker (again, visit www.uscis.gov for fee information).
  • Public Law 114-113 Fee, required for any employer with 50 or more employees based in the United States, at least half of whom are in L or H-1B status.
  • An LCA (certified labor condition application) from the Department of Labor.

For more information on what you need to collect and the steps you must take to hire an employee through the H-1B visa program, contact an experienced international law attorney in the U.S. Virgin Islands.

 

Ravinder S. Nagi is Assistant Managing Attorney and Chair of the Labor and Employment Law Practice Group at BoltNagi, a widely respected and well-established international law firm serving individuals and businesses throughout the U.S. Virgin Islands.

U.S. Virgin Islands Signs Tax Agreement with Airbnb

Posted in Government Relations

The U.S. Virgin Islands and Airbnb recently reached a landmark agreement that will allow the popular service for apartment and room rentals to collect the  12.5 % Hotel Room Occupancy Tax on behalf of hosts. Airbnb will then remit those funds to the Territory’s Bureau of Internal Revenue.

The deal also establishes a framework by which Airbnb will help promote more tourism in the U.S. Virgin Islands, with particular attention paid to the Territory’s cultural and historical heritage.

This is not the first time Airbnb has invested in an agreement of this kind in the Caribbean. The company has been focused on creating a community in which homeowners can rent out their own properties to create additional options for tourists in the region.

Home sharing and renting have become major trends in the tourism industry thanks in large part to the explosion in popularity of services like Airbnb and HomeAway. With this agreement, the U.S. Virgin Islands can take in revenue more reliably, with hosts not having to worry about handling remittance transactions themselves. Governor Kenneth E. Mapp said the benefits of the agreement are far-reaching and would perhaps impact the hospitality sector most significantly.

All part of the plan

This latest agreement with Airbnb is just one component of the Mapp Administration’s five-year plan to provide economic stability to the government through increased revenue collection, better management of resources and the spurring of economic growth in as many areas and industries as possible.

There are currently about 2,000 active listings on Airbnb in the U.S. Virgin Islands. On average, a host in the Territory will earn about $7,700 a year. In almost every case, money earned through Airbnb is a supplemental income that helps families to pay their bills and improve their overall quality of life. The selling point for Airbnb users is that staying with a host gets them a more authentic and up-close view of the Territory, especially when it comes to recommendations for sites and restaurants to check out.

Local authorities in the U.S. Virgin Islands have made it clear that growth and diversification of tourism in the islands—along with the improvement of tax collection for hosts and the government—is top priority. This agreement helps to provide a boost for each of those areas.

For more information on how the USVI government’s commitment to tourism, especially related to this new Airbnb deal, could affect your company, work with a skilled business law attorney in the U.S. Virgin Islands.

 

Tom Bolt is Managing Attorney of BoltNagi, a respected and well-established business law firm serving clients throughout the U.S. Virgin Islands.

USVI Attorney General: Physicians Must Treat Medicare, Medicaid Patients

Posted in Government Relations

Recent efforts on the part of U.S. Virgin Islands Governor Kenneth E. Mapp have resulted in the federal Medicaid program being made available to an additional 19,000 citizens in the Territory. However, reports continue to circulate about physicians denying medical services to Medicare and Medicaid patients.

An official complaint regarding this denial of care was made by Dr. Frank Odlum, Chair of the Board of Medical Examiners for the U.S. Virgin Islands, to Attorney General Claude Walker. Walker said he is “deeply troubled” by the nature of the complaints, one of which involved a doctor terminating a patient’s ongoing care after that patient was no longer covered by private insurance and was placed on Medicare instead.

U.S. Virgin Islands law requires doctors to provide care to Medicaid and Medicare patients. Here is an excerpt of the law:

All health care providers who, in addition to their employment with the Government of the Virgin Islands, engage in a private practice and receive financial assistance toward the payment of their medical malpractice insurance premiums under this section, shall accept Medicare and Medicaid for payment of health care services from patients in their private practice, and in addition must provide medical services to veterans of the United States Military Services that are covered by an insurance carrier.

As the Attorney General went on to say, the words contained in the statute are clear in their meaning—that doctors must accept Medicaid and Medicare patients into their care. There are no exceptions from this obligation in the U.S. Virgin Islands.

Doctor participation rate in Medicaid often subject to criticism

This is far from the first time the Medicaid program has seen some controversy over doctor participation. In fact, one of the most common criticisms of the program is that the rate of physician participation is lower than the rate for beneficiaries of Medicare. Some imply the Patient Protection and Affordable Care Act of 2010 has made access to Medicaid worse for the people who need it. However, there are some additional factors to take into consideration:

  • Federal statistics show the percentage of doctors accepting new Medicaid patients has remained steady at around 70 percent, with no evidence for decline under the ACA.
  • Doctor participation rates only measure patient care to a certain extent. One also should consider the number of doctors and their geographic distribution.
  • Participations vary from jurisdiction to jurisdiction, and mostly based on reimbursement rates.
  • Studies show beneficiaries of Medicaid fare as well as most privately insured people on certain important measures of care access.

Generally, while there may be a lot of excuses raised about low levels of doctor participation, these excuses are tenuous at best. Physicians in the U.S. Virgin Islands are expected to follow the law regarding admittance of Medicaid and Medicare patients.

For more information on the legal aspects of this public policy issue, speak with a knowledgeable government relations attorney.

 

Tom Bolt is Managing Attorney and Chair of the Government Relations Practice Group at BoltNagi, a widely respected and established government relations law firm serving individuals and businesses throughout the U.S. Virgin Islands.

Developing a Retirement Plan When You’re Self-Employed

Posted in Labor & Employment

As someone who is self-employed, you have the unique ability to control your own retirement plan. This might be an overwhelming prospect if you are unfamiliar with retirement planning, but once you have familiarized yourself with the process, you will find this total control to be quite beneficial.

The following are a few issues to should consider as you begin the process of selecting a plan:

  • Tax benefits: Some types of retirement plans allow you to make larger contributions than others. The larger the contribution you can make, the larger the tax break you are likely to receive.
  • Plan costs: Certain types of retirement plans are more expensive and require more work to maintain. You may need to hire a financial planner to help you determine your contributions. In other cases, you may need to file certain reports with the government. You should decide if the costs (of both time and money) are outweighed by the benefits of your potential plan.
  • Required contributions: Some types of retirement plans require you to make minimum annual contributions, while others allow you to contribute at your leisure. If the amount of money you make varies from year to year, you might want to have some more flexibility with your contributions, something you won’t be able to get from every type of plan.
  • Deadlines: There are deadlines to establish your plan. Sometimes that deadline is December 31 of the year you wish to begin making contributions, while others can be established before tax return due dates.

Common plan examples

The following are a few of the most common types of retirement plans used by people who are self-employed:

  • SEPs: A simplified employee pension (SEP) plan offers you some much-needed flexibility. You can contribute up to 25 percent of your business income up to $54,000, but there is no minimum contribution at all. You are never locked into a contribution amount, so if you had a great year you can max out your contributions, while if you had a down year you can simply skip your contributions.
  • Solo 401(k): A solo 401(k) plan gives you higher contribution caps and provides you with similar flexibility to an SEP. However, it requires more work to set up than an SEP, and once your plan reaches a certain size, you must file a special tax return for it.
  • Roth IRA: A Roth IRA contains investments in stocks and bonds through mutual funds and other investments. The total contributions allowed for an IRA is whatever is less between your taxable income and the limit for your age. Limits grow higher as you get older, as well.

For more information and guidance on your best strategies for planning your retirement while self-employed, meet with a trusted estate planning attorney in the U.S. Virgin Islands.

Ravinder S. Nagi is Assistant Managing Attorney and Chair of the Labor and Employment Practice Group at BoltNagi PC a respected and well-established labor and employment law firm proudly serving clients throughout the U.S. Virgin Islands.

Could an Implied Contract Be Legally Binding?

Posted in Corporate & Financial Services

An implied contract exists when two or more parties do not have a written contract in place, but there is a legal obligation based on the circumstances to uphold fairness for each party. While it’s typically a good idea to get any important contracts in writing, there are situations in which implied contracts are legally binding.

There are basically two types of these contracts: implied in-fact contracts and implied at-law contracts.

Implied in-fact contracts

A contract that is implied in fact establishes an obligation between all parties to the contract based on the situation’s facts. If parties conduct themselves in a way that suggests they had reached an agreement or understanding, the law generally states that there was an implied in-fact contract in place.

For example, imagine you are hired by someone to do some weekly landscaping and gardening work every Saturday, and are paid upon completion of each week’s work. You perform the job for five weeks in a row without incident, but on the sixth week, the person who hired you refuses to pay. Even if your agreement with this person was not in writing, a court would likely find that the person who hired you acted as though there was an agreement in place and that he or she did not live up to that implied in-fact contract.

Implied at-law contracts

In an implied at-law contract, there is a duty for the parties involved to perform certain duties, even if it’s against one of the party’s will. Without this duty, one party would be unfairly impacted by the actions of another party. In such a scenario, one party would be entitled to restitution for his or her losses, even if there was not an intent to enter a contract by either party.

This can get quite complicated. As an example, imagine a person gets into a car accident and suffers a broken bone, and then another person arrives at the scene to call an ambulance and help the injured party to safety. Later, that person is billed for their medical expenses, but they refuse to pay, having never intended to need medical treatment to start. The person is obligated to pay, however, because otherwise he or she would have unfairly benefited from the hospital’s services. The law determines there is an implied at-law contract in place between the patient and the hospital.

In short, just because a contract is not written down does not mean it is not legally enforceable. Even verbal contracts can be considered legally binding in some circumstances.

Regardless, it is always a good idea to get a contract in writing. For more information and guidance on establishing and enforcing sound business contracts, speak with an experienced business law attorney in the U.S. Virgin Islands.

 

Tobi A. Russeck is an attorney in the Litigation Practice Group at BoltNagi PC, a widely respected and established civil litigation law firm serving clients throughout the U.S. Virgin Islands.

Checklist for Covering Your Legal Obligations After the Death of a Family Member

Posted in Tax & Estate Planning

The time immediately following the death of a loved one can be incredibly stressful and hectic. If you have been appointed to the role of estate administrator, you will have a lot of work to do in the near future.

Here is a checklist of some of the most important responsibilities you must take care of when a family member passes away:

Immediate concerns

  • Arrange organ donation: If your loved one was an organ donor, the donations need to be made as soon as possible so that medical professionals can use them to save the lives of other people.
  • Contact immediate family: Inform all immediate family members of the death right away. You can contact close friends and extended family after all immediate family has received notification.
  • Follow your loved one’s body wishes: Whether the person wanted to be buried, cremated or donated to science, it is important to follow the guidelines they outlined in their estate planning documents.
  • Begin funeral preparations: Hopefully, your loved one will have left behind instructions for their funeral. Regardless, you will need to begin preparations for the funeral quickly. This includes choosing a funeral home.
  • Make sure property is secure: Your loved one’s home, possessions and vehicle should all be locked up and secure as soon as possible.
  • Notify the post office: Begin forwarding the deceased’s mail to your address. This will also help you determine which subscriptions and accounts need to be canceled. This can be done online in the Quick Tools section at www.usps.com

Before the funeral

  • Meet with the funeral director: Talk about the format of the funeral, the burial site, any traditions you have in your family and anything else important to you loved one.
  • Spread the word about the funeral: Inform as many people who knew your loved one about the funeral as soon as possible.
  • Write an obituary: Create a public obituary with funeral information. Send it to local newspapers and websites.

After the funeral

  • Obtain death certificate copies: These documents could be important for canceling certain accounts and dealing with creditors.
  • Notify the Social Security Administration office: This is especially important if your loved one had already been receiving benefits. The funeral home may assist with this.
  • Stop coverages: End coverages for health insurance, life insurance and any other policies your loved one had.
  • Notify lenders and banks: Make sure all banks and lenders, along with credit card companies, know of your loved one’s passing.
  • Cancel driver’s license: Inform the Bureau of Motor Vehicles about your loved one’s passing so the agency removes their name from its records.

For further tips on how to proceed after the death of a loved one and what steps you need to take, work with a trusted estate planning attorney.

Steven K. Hardy is an Associate with BoltNagi PC and concentrates his practice in estate planning and probate matters.

BoltNagi is a widely respected and established estate and tax planning law firm that serves clients throughout the U.S. Virgin Islands.