The U.S. Virgin Islands receives a great deal of publicity for the vitality of its tourism industry, and rightfully so—there are so many beautiful beaches, plenty of sunshine and some fascinating historical sites to check out. However, the Territory also offers some attractive incentives for businesses that relocate here.
The Economic Development Authority and the Economic Development Commission (EDC) Program provide these incentives. Tax credits are available for companies in the manufacturing, service or technology industries, as well as for businesses that do outsourced work (such as call centers). The agencies’ goal is to bring a wider range of businesses to the U.S. Virgin Islands to continue expanding and improving the territory’s economy.
The official mandate for the EDC tax incentives is as follows:
- To promote more growth, development and diversity of the territory’s economy
- To benefit citizens of the U.S. Virgin Islands by developing such resources to the fullest possible extent
- To establish and preserve capital and job opportunities for the residents of the Territory
- To promote capital formation for economic development in the territory
Which specific benefits are available to relocating businesses?
The various benefits and advantages available for businesses that take part in the EDC program may include the following:
- A 90% reduction in corporate income tax;
- A 90% reduction in personal income tax;
- A 100 % exemption on gross receipt tax;
- A 100% business real property tax;
- A 100% excise tax payments;
- A reduction in the customers’ duty, from the normal 6% to just 1%; and
- Rental space made available at rates below the market average in the St. Thomas and St. Croix Economic Development Parks
There are also various other fringe benefits associated with investing in the U.S. Virgin Islands business community. These include an overall very business-friendly environment, a well-educated labor force, world-class telecommunication capabilities, plenty of prime real estate available and easy access to the most important business locations in the world. There are also shipping advantages and the ability to use legitimate “Made in the USA” labeling.
Finally, it is important to note that the U.S. Virgin Islands is exempt from the Jones Act, which requires all freight traveling between American ports to be carried on vessels bearing the U.S. flag. This creates more shipping opportunities, as freight carried between the U.S. Virgin Islands and American ports may be carried on foreign flag vessels.
Now is a great time for business owners and investors to consider making their investment in the U.S. Virgin Islands. If you would like to learn more, speak with a U.S. investment and relocation attorney.
Tom Bolt is Managing Attorney of BoltNagi PC, a respected and well-established business and corporate law firm that serves clients throughout the U.S. Virgin Islands.