Virgin Islands Economic Development Authority : Spotlight

The US Virgin Islands is a premier destination for business investment and expansion, boasting a thriving economy that supports a variety of industries and myriad opportunities for companies looking to expand abroad to a world-class location.

US VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY SPOTLIGHT

Globally recognized for its natural beauty and enviable year-round climate, the US Virgin Islands (USVI) are a uniquely stunning blend of Caribbean and American influences, creating an inviting and captivating atmosphere.

The diverse culture is a reflection of the archipelago’s West African, Danish, Spanish, Irish, and German heritage. One of its most celebrated cultural assets is the people, known for their warm hospitality, strong sense of community, and collective desire to uplift the development of the islands.

The USVI offers an exceptional quality of life, with local traditions, upbeat music, and mouthwatering gastronomy all coming together to create a one-of-a-kind experience that many can only fantasize of. From its crashing waves to colorful celebrations, the USVI invites companies not just to conduct business here, but to embrace a cultural mosaic that positively impacts everything it touches.

As a world-class location for business investment and expansion, the USVI offers an abundant economy that promotes renewable energy, technology, life sciences, tourism, professional services, agribusiness, coastal and ocean resources, light manufacturing, and much more.

Equally, the archipelago’s unique tax benefits translate to a better bottom line for businesses therein. The tax programs are not only one of the most competitive tax benefit packages in the Caribbean, but across the world. Additionally, the USVI’s infrastructure provides ample strategic advantages. Its access to major shipping routes and the Panama Canal enables it strategic market access to the US, Latin America, Europe, and Asia, and companies will find unparalleled infrastructure and communication systems already in place.

Each island offers bustling hubs of both business and leisure, with opportunities including sustainable tourism innovations, agriculture developments, and strategic locations for trade, investment, and entrepreneurial ventures, alongside many others.

With the USVI’s population of approximately 87,146 – based on the 2020 Census – and an available, highly trainable, and primarily English-speaking workforce, the archipelago offers unceasing advantages for those looking to conduct, expand, or invest in business.

Q&A WITH THE VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY

Striving to be a driving force for economic development and transformation in the region, the Virgin Islands Economic Development Authority (USVIEDA) celebrates its 25th anniversary of driving economic growth and investment in the stunning archipelago. We revisit the authority with Wayne L. Biggs, Jr., CEO, who expands upon why the USVI is a one-of-a-kind investment hub.

Since we last featured USVIEDA in November 2023, what is your updated take on the industry? Is it still an exciting space to work in?

Wayne L. Biggs, Jr., CEO (WLBJ): It’s definitely exciting to work at the Authority and collaborate with the Virgin Islands government to diversify the economy and drive growth. We’ve introduced new tools and are focusing on expanding the South Shore Trade Zone.

We’ve also been very active in attracting clients. We currently have about 105 beneficiaries in the program, which remains steady. There is an excellent team working with us, and we’re here to assist any business looking to expand to or relocate within the USVI. We have the team available to support that and are open for business.

Can you reintroduce us to USVIEDA and the offers, services, and opportunities it provides?

WLBJ: We are a comprehensive economic development authority, meaning we have various divisions that handle different functions. Our Economic Development Commission is responsible for attracting foreign direct investment to the territory through numerous tax incentives.

We can reduce corporate income tax by 90 percent. If you’re a bona fide resident, we can lower it by 90 percent. If you’re using real property in regard to your operations, we’ll eliminate the real property tax entirely. Excise tax is also cut by 100 percent.

Our customs duties, which are normally six percent, would be reduced to one percent. Since we don’t have a sales tax, but a gross receipts tax, that rate is also reduced to zero. These reductions offer significant savings when attracting companies and establishing them in the territory.

We also have the Enterprise Zone Commission, which handles community planning and neighborhood development. Their goal is to revitalize areas that were once vibrant but have declined for various reasons. We’re tasked with bringing businesses and residents back to those areas, primarily through tax incentives. Additionally, we operate the South Shore Trade Zone, a free trade zone allowing the import and export of goods without taxes.

Being in the USVI allows you to import components from throughout the world and, based on your added value through assembly or manufacturing, which substantially changes the components, you can label products as ‘Made in the US’. If you want to sell US-made products to the US government, you can do so by importing components to St. Croix, assembling or manufacturing your final product(s) there, and then exporting to the US mainland.

We are also exempt from the Jones Act, meaning foreign vessels can directly move from our port to a US port, enabling foreign flagships to carry merchandise into the US.

Furthermore, we have our Economic Development Bank, which provides capital access for small businesses. We also operate an incubator and accelerator connected to both the bank and the Enterprise Zone Commission. Our import-export program aims to boost exports from the territory to other markets. We run two industrial parks, one in St. Croix and another in St. Thomas. The St. Croix park offers approximately 160,000 square feet (sqft) of occupiable space, while St. Thomas has about 20,000 sqft, with plans to expand.

We manage numerous internal initiatives and programs. One example is the Hotel Development Program, which offers rebates on occupancy taxes for hotel projects developed within the territory. Depending on the project’s scale, we can rebate up to 100 percent of the occupancy taxes generated, providing hotels with financial assistance for development costs and cash flow. This benefit can be combined with the Economic Development Commission incentives, resulting in a 90 percent reduction in profitability.

To date, three hotels are already participating, with two more set to be approved soon. We also run STARS, our film and music production program, which promotes film and music activities within the territory.

How does the Authority work to promote the USVI as an attractive investment hub, attracting new businesses and capital?

WLBJ: We continue to attract investment through various methods. Currently, we rely heavily on digital media, such as industry reference magazines. Of course, social media is essential now, so we maintain a presence on Facebook, X, LinkedIn, and others. We also participate in trade shows and conferences to promote ourselves and are happy to conduct Teams meetings, Zoom calls, phone conversations, or meet in person.

We are very selective about the types of industry trade shows we attend because we want to target industries that can attract activity to the territory, while also preserving a high-quality environment. Therefore, we seek out low-producing entities in the territory.

We’ve been very successful with financial companies and are expanding this area, including family offices, financial management firms, individuals involved in trading, and other financial services, such as off-site call centers.

In what ways does the Authority strive to be a driving force for economic development and transportation?

WLBJ: We aim to diversify the economy. We work closely with partner agencies, including the Department of Tourism and the Research and Technology Park, to build strategic partnerships that promote the territory’s economic growth and visibility – not just for the Authority, but for the benefit of the USVI as a whole.

Together, we participate in various events to take a holistic approach to investment in the USVI, whether in tourism, technology, or other sectors. We often lead these efforts by creating joint initiatives to promote the territory.

Are there any new trends currently shaping and transforming the USVI’s economic development?

WLBJ: We’ve observed more financial companies relocating and expanding here over recent years. We’ve also seen increased hotel development, as investors grow more confident in investing within the territory.

A new hotel has recently opened, with a second having completed its first phase, and others are in development. Tourism remains our primary market, but increased investment in this sector is driven by the Hotel Development Act and other promotional efforts we are engaged in.

Are you optimistic about the future of economic development throughout the USVI?

WLBJ: We are very optimistic about the future. We have the free trade zone that we’re promoting, and there are good opportunities for assembly and manufacturing in those markets, especially given our geographic location situated in the middle of the Caribbean chain. If you’re targeting Caribbean markets, it’s very easy to access them. Latin America is about 1,100 miles away, Central America roughly 1,200 miles, and North America about 1,400 miles. We are a US jurisdiction, so if you’re coming from the US and are a citizen, traveling back and forth is straightforward. Additionally, US laws protect intellectual property, and we use US courts and dollars.

We’re definitely optimistic about expanding the trade zone and continuing to develop a financial hub where more financial companies will set up shop, thanks to the incentives we offer and the available bandwidth, allowing them to conduct financial trades and consulting from the territory.

Finally, what are the Authority’s goals and priorities for the future, and what strategies will you use to facilitate them?

WLBJ: We’re focusing heavily on digital marketing efforts. We are strengthening our team with professionals who bring digital expertise, while expanding our use of social media and other digital platforms to more effectively share our message. Since many people get their news online, we’re emphasizing digital promotions. We are also being very selective about the markets we pursue. I see us continuing to attract financial companies because they are easier to relocate from one area to another, as they generally aren’t asset-heavy.

There is significant potential for the trade zone, particularly due to tariffs, because we are outside the US customs zone, meaning there are no tariffs on goods brought into the territory. We assist companies by hedging their tariff costs and helping extend their operations into the territory.

The territory is making substantial investments in its ports, focusing on what we call the P3 or PPP – i.e. a public-private partnership – updating and upgrading the port facilities, including the seaport and the airport. The airports will undergo a $250 million renovation, and the seaports will follow soon after. We anticipate many positive developments in the near future as a result.