The Dutch government includes BVI on tax blacklist 2020

In the beginning of October, the government of Netherlands announced the launch of consultation on next year’s list of low-tax jurisdictions to enforce existing and future anti-avoidance legislation. The British Virgin Islands is among sixteen countries included on the Dutch list, as one of jurisdictions with corporate tax rates of less than nine percent, and as such it will fall within the scope of new Dutch controlled foreign companies (CFC) rules, which became effective from January 2019 under the framework of the EU’s Anti-Tax Avoidance Directive.

Also, from 2021 withholding tax equal to the Dutch headline corporate tax rate will be imposed on interest and royalty payments to the jurisdictions named on the list. From July 2019, the Dutch tax authorities do not issue tax rulings to companies which are established in one of these jurisdictions.

Belize, which was present on the 2019 blacklist, has been removed from the proposed list for 2020, however, tax avoidance measures will apply to this jurisdiction as it remains included on the EU’s tax blacklist.

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BVI Government filed a lawsuit against BVI Airways director

British Virgin Islands Premier and Finance Minister Andrew Fahie has confirmed that the BVI government is suing its former attorney Lester Hyman, a director of the defunct airline BVI Airways. In a statement responding to questions about the lawsuit, Fahie said that the territory has interest in getting back US$7.2 million.

The case is now in the US Court, as the application was filed last month before the District Court of Columbia in relation to the above sum that was paid into the airline. The British Virgin Islands government is accusing Hyman, who is based in the United States and reportedly was a legal representative for the territory between 1987 and 2017, of “fraud at equity, breach of fiduciary care (trust) and loyalty, and negligence” in relation to the ‘failed airline venture’.

The sum of US$7.2 million was received by BVI Airways from the former NDP government to start direct flights between the BVI and Miami, US. However, later the airline laid off its staff, and the money have not been reimbursed.

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BVI company announced receiving of Nasdaq delisting determination letter

China TechFaith Wireless Communication Technology Limited, the BVI-based developer, owner and operator of commercial real estate properties, as well as mobile solutions provider in China, has received a delisting determination letter from Nasdaq, setting forth a decision to delist company’s American Depositary Shares from the Nasdaq Stock Market. This became the result of BVI company’s failure to file its Form 20-F for the year ended December 31, 2018, and to disclose in time information relating to company’s investment.

It is stated in the delisting determination that the ADSs will be suspended at the opening of business in September 17, 2019, and a form will be filed with SEC to remove Techfaith’s securities from listing and registration on the Nasdaq, unless the company requests an appeal on the decision.

The company does not intend to request an appeal, and so upon its delisting the shares may be traded over-the-counter on the OTC Bulletin Board or in the “pink sheets” if one or more market makers seeks and obtains approval by the Financial Industry Regulatory Authority to continue quoting in the Company’s ADSs. This would probably have material adverse effect on the liquidity and value of Techfaith’s ADSs.

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BVI FSC issued Public Statement on Quiloxtrade

The British Virgin Islands Financial Services Commission has issued the Public Statement to protect the interests of any customers, creditors and persons who may have conducted business by Quiloxtrade, and to inform the general public that this company has never been registered in the British Virgin Islands, and has not been licensed or regulated by the Commission to carry on financial services activities in the jurisdiction.

Company’s website,, falsely informs that the company is licensed in the BVI and regulated by the FSC to operate investment business and provide broker services through an electronic trading platform. However, Quiloxtrade is not and has never been licensed to carry on investment business and offer this kind of services in or from within the BVI territory.

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BVI company receives non-compliance letter from NASDAQ

BVI-registered agriculture technology company Origin Agritech announced that on June 5, 2019 received a letter from the NASDAQ Stock Market, informing that the company is not compliant with the listing rules.

According to the company’s Form 20-F for the fiscal year ended September 30, 2019, stockholders’ equity was US$3,396,000, while it is required by NASDAQ listing rule to have a minimum of US$10,000,000 in equity. Now the BVI company must submit a plan to NASDAQ within 45 days, of how to regain compliance. In case it is accepted, Origin will get an extension of up to 180 days from the Notice Date. If the plan is not accepted, the company will be able to appeal the decision.

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The report reveals role of BVI and other UK overseas territories in global tax dodging

According to the report published by the Tax Justice Network, the UK territories of the BVI, Cayman Islands and Bermuda are the ones to contribute the most to global tax avoidance, among all the tax havens, and Anguilla, Guernsey, Jersey and the Turks and Caicos Islands also facilitate tax evasion. The report also showed the responsibility of the United Kingdom for a global schemes of tax avoidance.

With more than one third of world’s corporate tax dodging, the UK is the greatest facilitator of corporate tax evasion, followed by the Netherlands.

Most of the top 10 tax haven jurisdictions, including BVI, are small countries, but they are home to trillions of dollars of foreign direct investment, and several of these flows may be because of diminishing tax bills. It is stated in the report that the range at which jurisdictions have allowed corporate tax dodging risks to attract multinationals has made countries’ corporate tax rates “meaningless”, and triggered a “race to the bottom” that would further drain tax revenues and especially influence underdeveloped nations.

Posted in British Virgin Islands, BVI Companies, Money Laundering, Offshore investment schemes, Offshore secrecy, Offshore tax havens, Tax avoidance, Tax Shelters | Leave a comment

Public Statement issued by BVI FSC

The BVI FSC issued public statement informing the public that Jim Morgan has never been an employee of the Commission or been authorized as its representative. The person is alleged to contact individuals via email, falsely purporting to represent the Financial Services Commission with the purpose to compensate for investment losses. Jim Morgan requests access to online bank account of individuals to make the compensation.

In the statement, the Commission strongly advised members of public against providing personal banking information or access to their personal bank account to any third parties, and invited to provide any relevant information on this matter to the BVI FSC, as well as the identity of any other individuals purporting to represent the Commission.

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BVI among major money laundering centres listed in US report

The latest US International Narcotics Control Strategy Report, in its part dedicated to money laundering, put the British Virgin Islands on the list of “Major Money Laundering Jurisdictions” for the year 2018. Among other territories listed there were all major Caribbean and Central American countries, including Belize, British Virgin Islands, Cayman Islands, Colombia, Costa Rica, Cuba, Curacao, Dominica, Panama, St Kitts and Nevis, Venezuela and many others.

The US added also the United Kingdom, Spain and The Netherlands, and itself on the list of major money laundering jurisdictions. The countries not included are some US protectorates along with France overseas territories Martinique, Guadeloupe and French Guiana. It is not indicated in the report whether the US will impose any sanctions on those countries included on the list of the major money laundering centers.

The United States is a founder and member of the Financial Action Task Force (FATF), which works in close co-operation on tax-avoidance issues with the Organization for Economic Co-operation and Development (OECD), related to the European Union. The EU tax haven blacklist seeks to penalize countries found to be tax havens and money laundering centers, while the INCSR is mainly short note on to further guidance on AML regimes.

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BVI elections: official observers concerned about campaign financing

BVI Governor Augustus Jaspert is planning to raise concerns of campaign financing during the 2019 General Elections, saying that campaign financing laws would limit the risk of corruption.

In the preliminary report of the team of international and independent officials, they expressed their concerns that there were no laws that require parties and candidates to divulge the origin of the funding of their campaign, and the ways how it was spent. It was noted in the report that, without adequate legislation on campaign finance, the jurisdiction is not compliant with the UN Convention against Corruption which was extended to the Virgin Islands in 2006. The governor agreed with election observers’ argument, and said that while he is prepared to discuss the issue with the government, it would be left to Premier Fahie to decide if it would be taken forward to Cabinet.

Now the final report from election observers is expected to arrive; in the preliminary report, it was also stated by election observers: “With continuing rumours of vote-buying and corruption by many interlocutors, a lack of financial accountability and legislative provision undermines and erodes voter trust in the system.”

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Class action lawsuits filed against BVI corporation, seeking to recover damages

Investors were reminded by Bronstein, Gewirtz & Grossman, LLC that a class action lawsuit had been filed against BVI-incorporated company China TechFaith Wireless Communication Technology Limited and some of its officers. The complaint, initiated on behalf of shareholders who acquired China TechFaith shares between July 12, 2018 through December 19, 2018, has the purpose to recover damages for the following alleged violations: the BVI company made materially false and misleading statements about the profitability of its agreement to sell its wholly-owned subsidiary, failed to adequately disclose the impact of changing market conditions, and made misleading statements about its business, operations and prospects.

Along with Bronstein, Gewirtz & Grossman, LLC corporate litigation boutique, BVI company’s shareholders are represented by the Schall Law Firm, a national shareholder rights litigation firm which announced filing of a class action lawsuit against China TechFaith Wireless Communication Technology Limited , and encouraged investors with losses over US$100,000 to contact the firm.

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