Specialist in British Virgin Islands (BVI) Offshore Company Incorporations
What will happen to my offshore company if the BVI is blacklisted by the EU.
The BVI is working to avoid being blacklisted by the European Union (EU) at the end of 2018. The original deadline was the end of 2017, but it was extended due to the damaging hurricanes of 2017 that the region suffered. The BVI government has been instructed to implement legislation that supports economic substance or the BVI will be added to the EUs blacklist of tax haven jurisdictions and subjected to diplomatic sanctions if it does not have these laws in place by the mandated time (source).
Our feeling is that this will be avoided as the BVI has taken steps to implement changes in the local law that will satisfy the EU. This will therefore have no effect on your bvi offshore company. If we are wrong and the BVI is blacklisted and subjected to diplomatic sanctions by the EU, we do not see how this will negatively impact your bvi offshore company significantly, as you will still have options to conduct your business. Diplomatic sanctions definition : the reduction or removal of diplomatic ties, such as embassies. This is not a big issue for the BVI.
Maybe it will be economic sanctions (typically a ban on trade, possibly limited to certain sectors such as armaments, with certain exceptions such as food and medicine). Even in this case, the BVI has limited exposure for them to apply pressure. Basically, it just looks bad for a country to be on a blacklist and no offshore jurisdiction wants to be on any negative list if they can avoid it. The main goal for the offshore jurisdiction is to maintain their offshore financial services industry regardless of any changes in the local law.