A Don’t Want To Miss Tech Tax Incentive Opportunity In The U.S. Virgin Islands.
The UVI RTPark is a fast expanding economic development initiative that concentrates on technology and knowledge-based company attraction for U.S. Virgin Islands (USVI). This is a collaborative initiative involving private enterprise, the Virgin Islands government, and the university.
The RTPark was founded in 2002 and is headquartered on the island of St. Croix it was the brainchild of UVI leaders working together with legislators and business leaders to realize their goal of creating a dynamic platform for the US Virgin Islands’ economy to be more diverse and to spur the islands’ growth and development in the emerging industries of tomorrow. The program continues to experience growth due to the high demand for innovative EDC programs in this sector and second to none technical assistance available for beneficiaries of the program known as park tenants.
To ensure future growth and vitality, RTPark has implemented a laser-focused and highly sophisticated corporate development program aimed at emerging new technological sectors like Telecommunications Infrastructure, Software Development, Cloud-based Solutions, Fintech, Biotech, Energy Technology, Blockchain, Business Process Outsourcing, Investment, Publishing and many more.
Companies that are authorized for benefits under the program are eligible for the following advantages under the provisions of the Internal Revenue Code and the U.S. Virgin Islands legislation that formed the University of the Virgin Islands Research and Technology Park (“RTPark”).
- Up to a 90 percent (90%) reduction in income tax liability attributable to the company’s qualifying income from a) income from USVI sources and b) income that is “effectively connected” with the conduct of a USVI trade or business pursuant to section 934(b)(1) of the US Internal Revenue Code. The income must be attributable to a business that is approved for benefits by RTPark. The income must not be U.S. source income or “effectively connected” with the conduct of a U.S. trade or business.
- An exemption on taxes on real property to the extent that it is utilized in the company’s business that is approved for benefits by the RTPark.
- An exemption from the USVI gross receipts taxes on receipts from the company’s business that is approved for benefits by the RTPark.
- An exemption from excise taxes on building materials, tools, pipes, pumps, conveyor belts, or other appliances, materials, and supplies necessary for use in the construction, alteration, reconstruction, or extension of the physical plant or facilities.
- An exemption from excise taxes on raw materials and component parts brought into the USVI for the purpose of producing, creating, or assembling an article, good or commodity;
- An exemption from withholding tax with respect to payments of interest and a four percent (4%) withholding rate on the payments of dividends and royalties;
- A reduction in customs duties from six percent (6%) to one percent (1%) on raw materials and component parts brought into the USVI by an approved company to produce, create or assemble an article, good, or commodity.
- The benefits will apply to shareholders, members, partners, grantors, beneficiaries, and other direct or indirect owners of the company who are bona fide residents of the USVI in accordance with Section 932(c) of the US Internal Revenue Code of 1986, as amended. Qualifying persons are entitled to a ninety percent (90%) reduction on income taxes payable on income derived from the dividends (100% on pass-thru distributions) paid to them by the company on qualifying income from the business that is approved by the RTPark.
- The company will not be subject to any otherwise applicable taxes or tax increases that may be subsequently enacted by the USVI Government during the period of its benefits, which is generally fifteen (15) years.
Source: Summary of USVI Tax Incentives for RTPark Approved Companies
For information on how to apply for one of our RT PARK Tax Incentive Program, business formation, entity management, compliance in the U.S. Virgin Islands, and learning more about doing business in the US Virgin Islands, contact USVI LAW, LLC, a full-service Virgin Islands law firm, today.