|British Virgin Islands Economy|
The British Virgin Islands is a series of islands situated in the Caribbean Sea, to the east of Puerto Rico. There are approximately 15 inhabited islands and four of these are considered to be the "main" islands. The total population of the British Virgin Islands is 22,000 with the bulk of people (18,000) living on the island of Tortola. The islands, unlike many other Caribbean countries, uses the US Dollar as its currency and so it is not tied to the US$, which the majority of countries which use the East Caribbean Dollar are. The British Virgin Islands economy is quite healthy and is certainly one of the strongest to be found in the Caribbean area of the world.
Like many of the other Caribbean islands in the 17th century, the British Virgin Islands was used mainly by the British colonists for sugar cane production. This was the mainstay of the British Virgin Islands economy up until the early part of the 19th century, when demand for sugar cane globally began to decline. The economy of the islands then faced years of strain and did not start to recover sufficiently until the early 1900s.
Financial Services & Tourism in the British Virgin Islands
There are two mainstay industries on the island which help to maintain the stable British Virgin Islands economy, which are tourism and financial services. Tourism is the "weaker" of the two with around 350,000 travellers visiting the islands each year. The majority of the tourists come from the United States of America (as much as 70%), followed by Canada, Puerto Rico and the neighbouring U.S. Virgin islands.
There are few hotels and other types of accommodation on the main islands and most of the tourist income is generated from chartered yachts and cruise ships that stop there. Although not as strong as financial services, tourism is still a crucial part of maintaining the British Virgin Islands economy as it employs over half of the total workforce (which is approximately 12,800 overall).
The predominant financial services industry on the island has been able to grow in strength since the 1980s and it is due to the fact that the islands allows for low rates on taxes, if at all (essentially it is a tax haven). The British Virgin Islands is seen as a major centre for offshore businesses and financial dealings and over 700,000 offshore companies have been formed there.
Stability in the British Virgin Islands Economy
The British Virgin Islands economy is sustained quite heavily by the registration and license fees charged by the government, indeed these charges make up just over 50% of the government's revenue. The islands are also the second largest source of foreign direct investments in the world, second only to Hong Kong.
Like Bermuda, the British Virgin Islands is one of the strongest economies, certainly in terms of GDP per capita. The economy looks set to remain stable for many years to come with the financial services industry in a prominent position and able to ward off any potential issues with recessions and the like.