The British Virgin Islands are a British Dependant Territory composed of over 50 islands, islets and cays located approximately 60 miles (95 kilometres) East of Puerto Rico. The total land area is approximately 60 square miles (155 square kilometres) and the total population is approximately 21,000. The principal island is Tortola, with a population of about 13,500. The capital of Road Town is located on Tortola. Access to the islands is easy by air and sea; the main gateways are Puerto Rico and the U.S. Virgin Islands, which lie immediately to the west. The Territory is politically stable and has a high level of internal self-government.
The government consists of a British appointed Governor and thirteen democratically elected members of a Legislative Council who, in turn, elect Ministers. The Executive Council of the Territory consists of the Governor, the Deputy Governor, the Ministers and the Attorney General. The United Kingdom, through the Governor, is responsible for defence, external affairs, internal security, and the administration of justice. The legal system is primarily based on that of Great Britain and there is legislation to regulate and protect corporate, banking, trust, mutual fund and insurance operations. All domestic matters are legislated locally, by the Legislative Council, including taxation.
There are no capital gains taxes, inheritance taxes or death duties in the Territory. Government revenues are derived from local income tax, import duties, stamp duties, license fees and company fees.
The British Virgin Islands are a party to two double taxation treaties, with Japan and Switzerland, which the United Kingdom entered into many years ago. These treaties were extended to cover the British Virgin Islands, although the Territory does not have a tax treaty with the United Kingdom itself. The treaties themselves are little used. There are no plans to negotiate any new tax treaties.
The Territory has adopted the U.S. Dollar as the local currency. There are no exchange controls and no restrictions on the free movement of funds.
In recent years the British Virgin Islands has become a significant international finance centre. The government seeks to maintain and enhance the Territory's reputation in international finance through a policy of ongoing consultation and active support of the offshore industry.