BVI shifts from insurance economy to debt economy, during the death throes of its corporate services economy (UPDATED)
The broken BVI economy was catalyzed by the hypocritical crack-down on the dodgy tax evasion services, and exacerbated by the horrible devastation from the hurricanes.
If the BVI really wants to get itself out of this intensive care, then thinking outside the rotten-box, that the good-old guys are trapped in, is not only recommended but a must.
The good-old guys preformed a great service not only for themselves and their close allies, but also for the BVI. The Virgin Islanders should be duly grateful.
It’s time to wake up from the old memories and start to face reality. The modern business world is driven by the impetuosity of the young, irreverent, non conformists and dropped-out youth who “move fast and break things” (Mark Zuckerberg).
It is not the strongest or the most intelligent who will survive but those who can best manage change. Modern business is just like fresh milk, not like wine. It does not get better by getting older. It expires, and becomes toxic. The BVI needs business leaders with great futures instead of expired pasts.
The price of doing the same old thing is far higher than the price of change. Just remember few old good and very big things that has been expired: Bankrupted Portugal was once the great Portuguese Empire. Bankrupted
Greece was once the famous Roman empire. Bankrupted Spain was once the
powerful Spanish empire. Bankrupted Turkey was once the giant ottoman
empire. Collapsed USSR was once the iconic Soviet empire. And the EU was
once just a small suburb of the Mongolian empire. All those are giants that fail because they refuse to refresh their good old days.
Also in Technology. Just try to remember giants that become nothing, and learn from their Fairlie instead of replicating their stagnation: Nokia was the mobile phones empire. Not anymore. Kodak was the photography empire. Not anymore. Polaroid too. Pan Am was the biggest American airlines. Not anymore. Tower Records was the first to create the concept of the retail music mega-store and Blockbuster was the biggest movies seller. iTues and Netflix killed them. Compaq was one of the largest sellers of PCs in the entire world in the 1980s and 1990s. They do not exist anymore. General Motors was one of the most important car manufacturers for more than 100 years, and gone bust. Xerox made the first computer, the first mouse and the first windows graphic interface. Yahoo was the biggest search engine. IBM was the first and the biggest Personal Computers manufacturers. MySpace was the biggest social media website in the world, supported by the biggest media giants. palm Pilot was the first touch screen phone and handy computer. Sony was the first to create the walk men, a music player on the go. Netscape was the most popular web browser. Atari was the first and the only computer game company. America Online was the biggest internet service provider. Toys R Us was the largest toys empire. Enron, Lehman Brothers, Arthur Andersen, was not too long time ago, what Apple, Google, and Microsoft are today.
"The definition of insanity is doing the same thing over and over again and expecting a different result".
(Albert Einstein).
It’s time to release the BVI from the bear-hug of the good old people, and to allow totally new, fresh and innovative minds to inject the BVI economy with a real and rich future.
Otherwise it’s just a question of time before the creditors will rightly start to enslave the BVI, as it will never be able to pay back its debts.
Start by changing the Regulator. The conflict of interest between the desire to protect the old business and the need to understand that the good old days are over for that kind of business . This ridiculous delusion has become a millstone around the neck of the BVI economy, and should be thrown off before it drowns the whole economy.
Anyway, as it looks to me, judging by what is done - and mainly by what is missed - the regulator understands nothing about the big new economy and the next generation regulatory environment. He is probably too old to think young. Or worse: maybe the regulator do understand the new business world but refuse to open it to the BVI, for protecting their own good old and expired business model.
The BVI economy needs an open-minded Regulator who will help it to break into the endless new opportunities that are flooding the world with billions of dollars, instead of holding the economy back by insisting on continuing with business inherited from a world-class drug-dealer, the illustrious General Manuel Noriega. It needs a Regulator who will stop manipulating the OCED and the EU so as to allow corporate beneficiary owners to keep playing the “hide and seek” game whereby they pretend they are clean business owners who have nothing to hide. It's time to leave the naughty business behind and to start build a healthy business that makes much more money. And a business that does not damage the BVI’s reputation as the tax evasion services industry does.
The BVI needs a regulator who understands that the last game is over and that a new, much better, game has begun.
There is a remarkable new game called FinTech, that is just waiting to be cashed in by new jurisdictions. In reality, this is just the same “selling of air” as purveyed by the corporate services providers, but this time it’s a really-legitimate, transparent, clean and modern. And sit would be so much more profitable for the BVI and all the BVI’s small and big service providers.
How about a FinTech license for entrepreneurs who are happy to pay taxes in the BVI (reducing those paid by BVI citizens), to replace the tax manipulators that continue to register off-shore companies as a mechanism to avoid taxes at home as well as in the BVI.
How about Fintech licenses that will brand BVI in the same positive light as Estonia, Dubai, London and Canada?
instead of the outright dodgy gray of suspicious listed jurisdictions?
It's time for the BVI to build a good reputation for the next generation, and to make more money from all the people who use the BVI as a jurisdiction.
For doing that, the BVI needs a new, young, innovative Regulator who can look forward, and take advantage of the billions of dollars that right now are flooding the market, before it collapses. In a market overloaded with cash for the past 10 years, the BVI has not even been collecting the scraps from the table, but is instead begging for loans when we all know that there is no source of income to pay them back.
The BVI has cashed nothing from the cruise ships that stop by with millions of dollars every year, but leave nothing behind (expect plastic garbage). Why?
The BVI has cashed nothing from the new virtual economy that flooded London, New York and Dubai with billions of dollars by selling nothing but legitimate ad clean FinTech licenses, to honest company owners that have nothing to hide. Why?
The BVI has cashed nothing from the Digital Nomads, who are happy to pay millions of dollars in low tax jurisdictions, while the BVI keeps offering zero taxation to dodgy "tax planning" manipulations, and continues to burn whatever is left of its reputation. Why?
The BVI keeps taxing its own citizens and overloading them with more tax burdens, instead of charging BVI citizens zero tax, as there are millions of Digital Nomads who are happy to pay billions of dollars in taxes to any jurisdiction that can serve them properly, without getting any problem with the OCED and the EU.
I have had the great honour and opportunity to meet many BVI people. Wonderful people: talented, well-educated, honest, friendly, motivated people who are loyal to their jobs and love their country. They are all a few levels above the people I meet and work with every day, from jurisdictions that are making loads of money every day, selling nothing but fintech licenses and related services.
With its great people and their powerful spirit, the BVI can do it bigger, and much better.
The UK is trying to genuinely help the BVI with facilitating a generous loan. The BVI government is genuinely trying to negotiate a good deal for the BVI. The UK loan and it's money that at least some of it will really help the BVI to recover and not only enrich the deal makers. I am sure that the regulator is doing the best he can to keep BVI corporate services alive, despite all the world trying to kill it slowly but surely.
But why be beggars, if with an open minded regulator the BVI can be choosers?
UPDATE:
I would like to address all the criticism that I got about this article:
1. Why is an outsider writing about an internal BVI matter?
My answer:
Sometimes you need an outsider to help you discover the opportunities - and the spots - hiding under your nose.
2. Accountability. Why is the article published without giving the name of the author?
My answer:
A. It’s about time that those who criticized start to broaden their minds above the gossip value of “who said what” and focus on the content itself. Shooting the messenger is a poor reaction from people who prefer to turn the spotlight away from the real big problem - and the problem they should rightly be held accountable for.
B. As is famously said: “it’s always the one with the dirty hands who are pointing their fingers.”
Why the regulators never held accountable for the money laundering they aggressively help to facilitate, and shifting the only reason they get salary for - compliance - to the customers and service providers? It’s the Regulator who should go to jail when compliance fails, not the corporate service provider. It’s the Regulator’s obligation to handle KYC and AML and not the service provider. This is what Regulators are paid for, and instead of being accountable they shift the responsibility and the accountability to the people who get paid for serving customers and not suppose to do the Regulator’s job.
C. Never be impressed by the posh language of officials who are pitching that others should be accountable for their words. Especially when those same officials are privileged with immunity, whether by law or practice and never held accountable for their mistakes. They should lead by example, not by double standards.
3. Why do you blame the Regulator instead of the law makers?
My answer:
The BVI lawmakers are working under the dictatorship of the Regulator. Their ability to open up the BVI to the big and amazing FinTech world is limited by the primitive regulatory dictatorship that has never missed an opportunity to miss an opportunity.
I cannot blame the politicians for taking a loan from the UK. They have a country to rescue. However, I absolutely blame the regulatory dictatorship in the BVI for refusing to flood the BVI with much more money, from much more legitimate sources, and much faster and much bigger than from the dodgy old corporate service industry they’ve endorsed.
4. This article characterizes the whole of the BVI‘s corporate services as money-laundering services, while the BVI has made big steps forwards in cutting our services for that type of client.
My answer:
Exactly the opposite: the most of the local service providers are honest, decent and legitimate service providers, that have no other choice -and blocked from making much more money from FinTech- but they must service the only type of the Ex-Panama business the regulator allow BVI to operate. And the new fake solution of “economic substance” doesn’t help them nor the BVI.
It is what it is. The corporate services business that was imported to the BVI by its Regulator from the drug dealer Noriega was never a clean business.
Insisting on helping people hide their ownership instead of following the UK Company House and the EU transparency standards, shows very clearly that the real motives of the BVI Regulator are far from being innocent or clean.
There is a good-bad reason why BVI registered companies dropped down from 800,000 to 150,000 just after BVI started to follow the EU Anti Money Laundering requirements. This is a 650,000 companies that the very same regulator approved as "legitimate", and now run away, also with the huge income the BVI lost from this regulatory wrong doing. The regulator fail to understand that the game is over, and to open up the BVI to the new FinTech trend that started few years ego (and now its getting to late to do with it anything legitimate).
Bottom line: fix your wrong doings instead of looking what others do wrong.