The business model of the British Virgin Islands and Panama

Abstract

In this note, we describe the history and the main characteristics of the tax havens The British Virgin Islands (BVI) and Panama. We discuss the financial channels used in these jurisdictions to move money and assets across borders, such as the incorporation of corporations (known as International Business Corporations), trusts that are financial holding companies, asset management companies, and captive insurers. We also analyze what steps these jurisdictions have been taking to increase the transparency in international capital transactions, to fight tax evasion and tax fraud, and to cooperate with tax authorities in foreign countries.