Premier is optimistic despite slowdown in new incorporations

~~Adz:Left~~ Roadtown, Tortola - Government is reporting a slowdown in the growth of new incorporations in the financial services sector but there is optimism about the future.

Premier and Minister for Finance Honourable Ralph T. O’Neal, OBE made the disclosure today as he responded to a question posed by the Leader of the Opposition during the third sitting of the second session of the First House of Assembly of the Virgin Islands.

Honourable O’Neal said while “2007 was a year of unprecedented growth with approximately 75,000 new companies formed, 2008 was not as robust as new incorporations were down 20% at the end of the year.”

While the full magnitude of the impact of the global economic down turn on the BVI’s financial services industry is still to be assessed, the Premier said “2008 was a year of little or no growth in financial services.”

However the Premier believes there is reason for optimism. “Preliminary analysis suggests that the Registry is poised to record its third best year to date in respect of new incorporations and revenue for the corresponding period has not fallen as sharply,” Honourable O’Neal told the House.

The Premier revealed that captive insurance and mutual funds are likely to be most affected by the global economic downturn.

He stated that “the [Financial Services] Commission has already seen evidence of this in the increased number of requests by funds for voluntary cancellation and by notification of suspensions of redemptions as well as a downturn in the number of new applications for recognition.”

Based on this, the Premier hinted at the possibility of “minimal growth in these types of structures particularly in the first half of this New Year.”

The global economic climate also appears to have impacted the tourism industry. Preliminary statistics for 2008 show a decline in stay-over arrivals. “At this time, only information for overnight visits has been completed, and this provisional data up to October 2008, indicates a decrease in overnight tourist arrivals of approximately 22 percent from the same period in 2007,” Honourable O’Neal said.

Financial services and tourism represent the twin pillars upon which the economy of the BVI is based and Government stands committed to ensuring the survival of these industries which are essentially the engines of growth propelling the development of the Territory.