FRASER: COMPLIANCE BURDEN FORCING LOCAL FIRMS TO SHUT DOWN

Deputy Premier Julian Fraser has warned that Virgin Islander-owned companies are being driven to closure by the cost of compliance rather than business failure, as the BVI prioritises its standing with international regulators.

During House of Assembly debate on Tuesday on the Limited Partnership (Amendment) Bill 2026, Fraser highlighted the tension between safeguarding the territory's reputation in global financial services and the survival of small local enterprises. He pointed to registered agent fees and economic substance requirements as particular pressures on domestic operators.

Fraser questioned the logic of requiring a locally owned, locally operated company with local staff and office space to file proof of economic substance to the same standard applied to international firms with no ties to the islands. He noted that business owners he had long encouraged to incorporate for asset protection were now unable to afford the costs of keeping their companies registered.

The cost of restoring a company to the register, he said, was prohibitive. "What is happening, businesses are collapsing. They're going out of business. Their assets are being held by somebody else," Fraser told the House, though he acknowledged uncertainty about the specific ownership of those assets.

Fraser recalled raising the issue when the limited partnership framework was first introduced and said conditions had deteriorated. "It has fallen so far short of the mark that I am here in 2026, making the same cry," he said.

He drew a contrast between the government's international obligations and its duties to citizens. "They want legislation, we give them the legislation that they need to be in good standing internationally. OECD, all the rest of it. But at the same time, we are failing our own people," he declared.

Junior Minister for Financial Services Lorna Smith responded that domestic businesses were exempt from the provisions under debate and pledged ministry support. She said the International Tax Authority handled the exemption process and that some companies had successfully obtained relief. Smith acknowledged that domestic businesses did not always receive the response they needed and committed to helping them work with the authority.

"We are here, yes, to support international business, we are equally here to support local business," Smith said.

Premier Natalio Wheatley outlined the bill's amendments: changes to annual returns, exemptions for partnerships undergoing liquidation, procedures for external creditors to restore partnerships, and revisions to partnership names, certified translations, accounting records and beneficial ownership reporting.

Fraser acknowledged the government's international efforts but demanded equal urgency for local business owners. He cited the House's passage of four bills through three readings in a single sitting as evidence of commitment to financial services, and called for the same determination to address burdens on Virgin Islanders.

"Internationally, we are holding our own because of you. But locally, we're not," he said. "We have to find a way. It can't continue. It needs to stop."