Save 90 percent on your taxes next year, investing in paradise means big breaks for U.S. taxpayers

Tired of writing those big checks to Uncle Sam? Grab your swim trunks and mix yourself a pina colada because Americans relocating or starting a business in the United States Virgin Islands are eligible for huge tax breaks, including up to a 90 percent exemption on income taxes.

Under a program designed to encourage investment in the Territory, the Virgin Islands Economic Development Commission has the authority to grant tax exemptions to any business that will advance the economic well-being of the Virgin Islands and its people.

White sandy beaches, crystal clear waters, world class shopping, fine dining, year around warm weather and arguably the region’s best location for diving and yachting, the Virgin Islands remains one of the Caribbean’s premier destinations with more than 2 million visitors annually. It is also one of the easiest to access with direct flights from many major U.S. cities to include New York, Atlanta, Miami, Boston and Philadelphia.

The door is open for everyone from financiers to farmers to apply for these tax benefits, which are typically granted once the company can prove it can meet fairly basic criteria such as committing to hire ten employees locally and invest at least $100,000 in the Virgin Islands economy. It is not difficult to apply for or to be granted these benefits if the applicant can demonstrate that they will be making a legitimate investment in the Territory and provide good jobs for Virgin Islanders The V.I. Government website has a great deal of information about the program with a link to all applicable laws.

“Our Economic Development Commission benefits help qualifying companies reduce their taxes and increase their profits and rivals any benefits package across the globe. We boast the opportunity to conduct business in one of the world’s most beautiful natural environments with splendid panoramic views, gorgeous sand-filled beaches, world-class resort hotels and oceanside golf courses,” says Governor John P. DeJongh, Jr. on the Commission’s website. “The climate for business development is ever increasing and the prospect for economic explosion has never been brighter.”

The US Virgin Islands is perceived as a very safe investment as although the local Government is allowed by the Treasury Department to offer these tax breaks, it is still subject to the protection and laws of the United States.

The seven-member Virgin Islands Economic Development Commission reviews all applications for tax benefits. Upon receipt of a completed application, the Commission holds a public hearing. Approved applications are subject to the Governor’s approval and a contract setting out specific information about the benefits to include an expiration date. Benefits are typically granted for a ten year period and there is usually an opportunity to renew them when they expire.

U.S. income tax exemptions often represent the most significant savings, but there is also opportunity to apply for up to a 90 percent tax exemption on dividends and a 100 percent tax exemption on property and other taxes.

Real estate professionals say that the property tax exemption allows for investors to purchase both commercial space and corporate housing with significant savings.

Many high end properties are now being developed to accommodate new investors, to include a state-of-the-art mega yacht marina in Charlotte Amalie and the Virgin Islands’ first gated community of luxury beachfront villas at Cabes Point.

Amalie Parrott, Vice President for The Residences at Cabes Point, said that the project was designed to cater to the business person who is a part time island resident. Located adjacent to park land and one of the most beautiful white sand beaches in the Caribbean, Cabes Point is being developed as a small community of private single family homes maintained by a condominium association.

“These are essentially hassle free second homes,” Parrott said. “There are many people investing in the Virgin Islands who need to come and go without worrying about taking care of their homes or landscaping. This project is the first of its kind in the region and the homes are of the highest quality for the most discerning individuals.”

A dramatic increase in luxury housing options is now available for EDC beneficiaries, including Yacht Haven Grande Marina on St. Thomas, which is now in its final phase of construction. It is among the Caribbean’s most modern and complete marina facilities and includes condominiums, yacht slips and commercial space. Other recent entries into the St. Thomas residential scene include the Ritz Carlton chain with its residences program and developer Ginn Communities.

The Virgin Islands Economic Development Commission touts the many other benefits of investing in the Territory, to include an educated work force, Made in the USA labeling, duty free exporting of goods to the U.S. mainland and a world class telecommunications network.

According to the Commission’s website, businesses currently receiving tax breaks include watch and jewelry manufacturers, research firms, hotels, marinas, investment managers, furniture makers, dairies and mortgage brokerages. Some of the advantages they are receiving include: 90% exemption on local income taxes; 90% exemption on dividends; 100% exemption on gross receipts taxes; 100% exemption on property taxes; 100% exemption on excise taxes and only 1% custom duties levy.

As if those benefits were not enough, the Economic Development Authority points out that businesses choosing to take advantage of this program will “reap the generous benefits of an administration committed to economic development and enjoy a business climate that is second to none.”

All that, and the opportunity to live in a tropical paradise.