Economic Development Benefits

The U.S. Virgin Islands has been granted authority by the U.S. Congress to enact special laws to encourage investment in service businesses such as investment management, management and economic consulting and investment advisory services as well as tourism related business, manufacturing operations, raw materials processing, telecommunications and insurance companies.

Under this Federal umbrella, the U.S. Virgin Islands has enacted a comprehensive economic development law under which qualifying businesses - corporations, partnerships, limited liability companies or sole proprietorships - receive various benefits if they meet certain investment and employment criteria. In order to qualify for benefits from the Economic Development Commission (EDC), a beneficiary must:

• Invest a minimum of $100,000, exclusive of inventory
• Be a resident individual or business entity (partnership, corporation, limited liability company, limited liability partnership, trust) in the U.S. Virgin Islands and be licensed to conduct business in the V.I.; pass through provisions for V.I. Resident owners.
• Employ at least 10 persons as full time employees, PROVIDED 80% are U.S.V.I. residents
• Meet standards for "ecological compatibility"
• Employ, or contract for services and products from, U.S.V.I. registered and licensed businesses
• Provide educational assistance to U.S.V.I. residents through contributions to the educational fund or by providing a training program
• Establish a management training program
• Agree to donate an appropriate level of charitable contributions
• Maintain payroll account in a U.S.V.I. Bank

A beneficiary of the Economic Development Program receives a substantial reduction in or an exemption from taxes imposed on businesses in the U.S. Virgin Islands.

1. 100% Exemption from following taxes:

• Real Property Taxes on real property used in the business
• Gross Receipts Taxes (tax on gross revenue)
• Excise Tax on building materials, tools, etc. used in construction, alteration, reconstruction or extension of business premises

2. Reduction of tax liability as follows:

• 90% reduction on income taxes on qualified business income
• 1% Customs Duty levied on raw materials and component parts used in industrial and manufacturing processing.

Special Notice

• Recent Federal Law provisions require eligible taxpayers to be resident in the U.S.V.I. for a minimum of 183 days per year;
• Services rendered to clients outside the U.S.V.I. MUST be rendered from the U.S.V.I. to qualify for Benefits treatment; personal services rendered in the U.S. will be treated as U.S.- sourced and not eligible for benefits treatment.

Economic Development Commission benefits are offered for ten years in St. Thomas, St. John and eastern St. Croix and for fifteen years in western St. Croix. Benefits can be extended by the Commission for an additional 10 years.

Triangle Corporate Services, LLC can provide advice and guidance on the economic development benefits, on the application requirements and procedure and on audit/compliance.

Triangle Corporate Services
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