The Basics

The British Virgin Islands is a group of 36 islands located in the Caribbean Sea, only 16 of these islands are inhabited. The British Virgin Islands are located to the north of the Leeward Islands, adjacent to the U.S. Virgin Islands, and roughly 80 kilometers east of Puerto Rico. The total land area of the British Virgin Islands is 153 square kilometers. The main islands of the group are Tortola, Virgin Gorda, Jost Van Dyke, and Anegada.

Most of the coral islands are relatively flat, while the volcanic islands are hilly and steep. Mount Sage is the highest point of the islands with a peak of 521 meters.

Although the climate is sub-tropical, the humidity and high temperatures are eased by trade winds.

Tortola, the land of turtledoves, is the largest island of the group and is located about 130 kilometers east of Puerto Rico. It overlooks Sir Francis Drake Channel and is home to the capital, Road Town, as well as the International Airport, Beef Island. Flights to Puerto Rico leave frequently from the airport.

The British Virgin Islands are home to several historical sites and wildlife sanctuaries. Gorda Peak National Park has many indigenous plants and by been reforested with mahogany trees. “The Baths” is a beach formed by giant granite boulders that create a series of marvelous pools and grottoes that are flooded with seawater. Little Forest National Park, which is a 36-acre wildlife sanctuary located on Virgin Gorda. Little Forest National Park is also the location of a historic Spanish fort and the stonewalls of this fort are sill visible. Cornish miners mined on the southwest tip of the island between 1838 and 1867.

The official language of the British Virgin Island’s is English.

As of 2006, over 20,000 people call the British Virgin Islands home. The population descended from British, Spanish, and Dutch immigrants as well as Amerindians and Caribbean islanders. The population has more than doubled in the past twenty years as a result of immigration from other Caribbean nations. The majority of the immigrants have come to the British Virgin Islands in search of work. Although there is some tension between newcomers and “belongers,” proposals for restrictive new immigration have met with great controversy.

Like other Caribbean Islands, the British Virgin Islands were historically settled by Arawak and Carib Indians. Despite the fact that the islands were first discovered by the Spanish in 1493, the first foreign settlers were Dutch planters. The British gained control of the islands in 1666 and the territory was part of the Leeward Islands from 1872 until 1956. In the years since their separation from the Leeward Islands, the British Virgin Islands have forged economic ties with the US Virgin Islands rather than the British Territories’ West Indies Foundation.

With 400,000 arrivals annually, tourism is a dominant feature of the islands’ current culture. The other dominant cultural force is the United States. This fact is surprising to many as the British Virgin Islands are a British Dependent territory, a situation with which most of the islands are content. Nevertheless visitors and citizens can still enjoy glimpses of the relaxed lifestyle that has evolved over the past four hundred years as a result of English, French, Dutch, and Spanish adventures, plantation owners, and early settlers. Road Town’s postcard perfect location, relaxed atmosphere, and sheltered harbor make it a particularly good place to enjoy the rich cultural heritage of the British Virgin Islands.

Government and Economy

The British Virgin Islands are a member of the Commonwealth of Nations and a dependent territory of the British Crown and has legal system is based on English Common law. Represented by a Crown appointed Governor, the Queen is the Chief of State. The Governor acts as head of the Executive Council, which is made up of the Attorney General, Chief Minister, and three other ministers. The Legislative Council consists of nine elected members who represent district constituencies, four elected members who represent the entire territory, one member who is appointed by the Governor, a Speaker who is elected from outside the Council by Council members, and the Attorney-General who is an ex-officio member.

However, since ratification of its constitution in 1967, the British Virgin Islands have been primarily self-governing and their reliance on UK statutes relating to international matters has been limited. The government of the British Virgin Islands announced its desire to increase its authority and asked for some of the Governor’s powers to be transferred over. The basis for this request was the British Virgin Island’s “constitutional maturity and prudential system of government.” In particular, then Chief Minister Ralph T O’Neal believed that the rules for the conferment of belonger status should be streamlined with the standards for granting nationality under the 1993 British Nationality Act. It was his hope that doing so would remove some of the confusion over the process for granting passports.

The UK and British Virgin Islands’ governments successfully negotiated the terms of a new contract for the islands at the end of February 2007. The British Minister responsible for Overseas Territories, Lord Triesman, called the negations “an important step forward for the territory” and the British Virgin Islands government will gain significant new powers under the new constitution.

The two largest components of the British Virgin Islands’ economy are tourism and offshore financial operations. More specifically, contributing $200 million annually to the islands’ economy, tourism contributes an estimated 75% to the GDP. Along with other tourist services, the British Virgin Islands are an established center of the chart yachting industry. In addition to these, minor industries include construction, rum distillation, and fishing. Fish, sand and gravel, fruits and vegetables, and rum are widely exported. Despite a recent slow down in growth, the country’s per capita GDP remains one of the highest in the world at $38,500USD.

In recent years the government of the British Virgin Islands has worked to diversify the economy in attempts to prevent it from becoming dangerously dependent on financial services. As part of these efforts, the government has been increasing promotional activities for other sectors of the economy including tourism and agriculture, which currently only accounts for a minimal fraction of the annual GDP. Territorial leader, Dr Orlando Smith, has gone so far as to suggest that agriculture should become the British Virgin Islands’ third economic pillar.

It is not an exaggeration to say that the British Virgin Islands’ financial services industry is wildly successfully and has done especially well in recent years. In 2003 alone, the government received almost $130 million from the financial services industry, up 15% from 1005. The islands are already home to nearly 700,000 companies and an average of 50,000 new companies incorporate annually. Providing high levels of privacy, economic and social stability, a good reputation, and flexible legislations, the British Virgin Islands are an excellent offshore destination. While other destinations offer similar enticements, the British Virgin Islands, at least for the time being, appear to be the most popular destination.

Not content to rest on its laurels, the British Virgin Islands is looking to achieve additionally growth in the financial services sector with international marketing campaigns and by ensuring that its legislation stays current with the most important global trends. In November 2006, a team of ambassadors known as Team BVI was picked from the private and public sectors to act as the face and voice of the British Virgin Islands unique financial services brand.

In what appears to be a successful defense against money laundering, the banking industry has not been encouraged on the islands and the most important offshore activities are mutual funds, captive insurance, and trust management.