Road Town, Tortola - The number of new company incorporations in the Virgin Islands decreased by more than 14,000 in 2009 but Premier and Minister of Finance Honourable Ralph T. O’Neal, OBE said there is optimism about the overall performance of the Territory’s economy in 2010.

Statistics from the Financial Services Commission (FSC) help substantiate this optimism because they reveal growth in the post incorporation fees for the annual renewal of business companies.

According to the FSC statistics, the number of new incorporations has been on the decline since 2008. After totalling 77,022 in 2007, new incorporations dropped to 61,716 in 2008 and 47,477 in 2009.

A quarterly breakdown of the statistics shows that in 2007, new incorporation exceeded 17,000 in all four quarters. However, in 2008, only first quarter incorporations exceeded that figure, totaling 20,752 for that period. In 2009, there were 12,307 new incorporations in the first quarter; 9,871 in the second quarter; 13,368 in the third quarter and 11,931 in the fourth quarter.

In his recent delivery of the 2010 Budget Address in the House of Assembly, the Finance Minister noted that “incorporation figures up to the third quarter of 2009 were down by approximately 32 percent compared to the same period in 2008.”

According to the Premier, “Although, this was a significant decrease, the overall number of active companies registered in the Virgin Islands still remains in the region of 400,000.” FSC statistics show that there were 410,293 active companies in the Territory in 2009, compared to 414,620 in 2008.

Despite the declining incorporations, Premier O’Neal noted that Government revenue has not been too severely affected. “Government incorporation fee revenue therefore has not been heavily impacted since re-registration income remained strong in 2009,” he stated.

FSC statistics show while revenue from new company incorporations totaled $17,223,800 in 2009 down from the $22,472,650 in 2008, the post incorporation fees for annual renewal actually increased from $156,154,645 in 2008 to $162,660,889 in 2009. So far this year, the revenue from new company incorporation is $4,578,725.00 and for annual renewal, $10,577,955.

The registration fee for financial services companies doing business in the BVI ranges from $350 for companies which issue not more than 50,000 shares to $1,100 for those which issue more than 50,000 shares and companies which issue bearer shares or operate with restricted purpose can pay up to $5,000 annually.

Although he acknowledged the varying effects of the global financial crisis on the local economy in his delivery of the 2010 Budget Address, the Premier and Minister of Finance said optimism remains. “Notwithstanding, expectations for the Virgin Islands economy in 2010 are optimistic given the path recovery for the global economy although forecasts indicate that it will be lethargic,” he said in the House of Assembly.

Honourable O’Neal added, “The local economy should experience some relief in terms of improvement in tourism and financial services figures, as consumer confidence in the job and financial markets improve and individuals and corporations increase spending.”

The financial services sector is one of the primary economic pillars of the Virgin Islands. The industry contributes about 60 percent of the Territory’s annual revenue.