Tax Haven British Virgin Islands Agrees to Publicly Register Company Owners Amid Pressure to Increase Transparency

The British Virgin Islands (BVI), a notorious tax haven and secrecy jurisdiction, has announced plans to introduce a public register of company owners. This move comes amid growing pressure on the BVI to increase transparency following numerous exposés by investigative journalists.

The Need for Transparency

The BVI, an overseas territory of the United Kingdom located east of Puerto Rico, has long been associated with money laundering, corruption, and tax evasion. Successive scandals have placed the territory under scrutiny, with reports suggesting that at least 20% of suspicious activity reports filed by US banks involve BVI companies.

• The BVI’s lack of transparency has made it difficult for authorities to track down the owners of companies created on the island.
• Countries can officially request information from the BVI, but not all countries have this capability, and even if they do, the process can be slow and cumbersome.

A Major Step Forward

The introduction of a public register of company owners is seen as a major step forward in increasing transparency in the BVI. The move is expected to be implemented by 2023, according to UK Minister Liz Sugg.

• This development is a significant victory for transparency advocates.
• It will help authorities to better track down the owners of companies and combat money laundering and tax evasion.

Unequal Treatment?

However, not all tax havens are receiving equal treatment. Anguilla, another tiny island territory with a population of just 17,000 people, has been placed on the European Union’s blacklist for failing to meet standards of transparency and fair taxation. In contrast, the Cayman Islands, which has a zero corporate tax rate and has welcomed tens of billions of dollars in profits from major US companies, has been delisted.

• Experts have expressed concerns that the use of lists to punish smaller tax havens exempts countries like Switzerland, Luxembourg, and the Netherlands, while allowing bigger players to escape scrutiny.
• “Blacklists are divisive and counter-productive,” said law professor Afton Titus. “This process is less about ensuring global tax transparency and more about creating a mechanism by which to publicly defend the interests of industrialized countries.”