USVI Tax Incentives
In the United States Virgin Islands (USVI), the tax system presents a remarkable opportunity for businesses to thrive and excel. With a highly competitive corporate tax benefits package that aligns with federal tax laws, businesses in the USVI can achieve significant benefits through tax reductions and exceptions.
We can assist businesses in harnessing the full potential of these tax incentives to enhance their financial performance while ensuring compliance with relevant regulations. We can guide you through the complex process of qualifying for and utilizing these incentives.
Whether you are looking to open a Virgin Islands company or relocate your headquarters, we offer tailored legal solutions that help you optimize tax benefits while maintaining continuity with federal tax laws. With our expertise and client-centric approach, we are committed to helping businesses in the USVI thrive and succeed in a tax-friendly environment.
Economic Development Commission (EDC) Tax Incentive Program
The Virgin Islands Economic Development Authority provides incentives to businesses formed under USVI laws that operate within the territory and qualify for the Virgin Islands EDC Tax Program. This program aims to drive self-sustainability in the USVI by attracting quality businesses, creating job opportunities, and bolstering the local economy.
To be eligible for the EDC Tax Program, corporations must meet specific criteria, including a minimum investment of $100,000, actual investment in the industry, and employing at least 10 USVI residents on a full-time basis.
EDC Tax Program Benefits:
- 90% reduction in corporate income tax
- 90% reduction in personal income tax
- 100% exemption on excise tax
- 100% exemption on property taxes and gross receipts tax
- Reduced customs duty to 1%
- No state or territory tax
Sustainable Tourism through Arts-based Revenue Stream (S.T.A.R.S.) Program
The diverse landscape of the U.S. Virgin Islands is perfect for the production of motion pictures, documentaries, television programs, commercials, music videos, and magazine advertising. The S.T.A.R.S. Program was developed by the Economic Development Authority to advertise and promote the USVI as an ideal location for film production and music recording projects.
Businesses within these industries must meet certain requirements, such as residency or a license to conduct business in the USVI, a minimum investment of $250,000, employing residents to constitute at least 20% of the total workforce, and receiving acknowledgment in the credits.
S.T.A.R.S. Program Benefits:
- Up to 17% transferable tax credit to offset any tax obligation
- Up to $500,000 cash rebate
- Additional 10% cash rebates
- Reduction of Hotel Tax rates
USVI Research & Technology Park (RTPark)
In collaboration with the University of the Virgin Islands (UVI), the Virgin Islands Research and Technology Park (RTPark) offers tax and economic incentives to companies operating in the research, technology, and environmental sustainability sectors. Eligible businesses can choose between the EDC and the University’s programs. RTPark supports entrepreneurs in building technology solutions that address economic, social, and environmental challenges, fostering tech-based entrepreneurship in areas such as financial technology (Fintech), biotechnology (Biotech), energy research and development, and business process outsourcing (BPO).
- Up to a 90% reduction of income tax liability
- 90% credit against personal income tax
- 100% exemption on real property taxes (for business)
- 100% exemption from gross receipts taxes
- 100% exemption from excise taxes for certain imported materials
- Exemption from withholding tax for interest payments
- 4% withholding rate on dividends and royalties
- 1-6% customs duties on imported raw materials and component parts
- Access to the national export assistance program (ExporTech)
Exempt Companies, also known as offshore corporations, are tax-free entities established under U.S. law by foreign nationals. These companies pay an annual $1,000 fee to the USVI government and must guarantee that citizens, residents, and corporations in the U.S. and USVI do not own 10% or more of their stock, directly or indirectly.
Exempt Companies Tax Benefits:
- No taxes on income earned anywhere
- No U.S. federal or USVI inheritance, gift, or estate taxes on company stock
- No U.S. federal or USVI taxes on capital gains from the sale of American securities
- Benefits guaranteed by a contract with the USVI government for 20 years
Navigating USVI Business Tax Incentives: Partner with Westfall Law
When it comes to capitalizing on the extensive tax incentives available in the U.S. Virgin Islands, Westfall Law is your trusted legal partner. Our dedicated team is committed to understanding your business objectives and helping you navigate the application processes for various programs. With our proactive and client-centric approach, we strive to create value for your business while ensuring compliance with all relevant regulations.
Meet The Team
Ann Marie Murzin
Real Estate Paralegal
Legal Assistant & Office Coordinator
Legal Assistant & Office Coordinator
Senior Business Development Strategist
Office Manager / Relations
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