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Tax Incentives

A World-Class Tax Benefits Package

In the U.S. Virgin Islands, unique tax benefits translate to a better bottom line. The USVI’s tax program is not only one of the most competitive tax benefits packages within the Caribbean, but across the globe. The USVI offers a tax program that is fully sanctioned by the U.S. government and Internal Revenue Service.

Learn more below

Economic Development Commission (EDC)

The Economic Development Commission (EDC) offers a unique and attractive tax incentive program for companies located in the USVI. This is a competitive offshore tax benefit program that the U.S. Government sanctions.

  • 90% reduction on personal income tax
  • 90% reduction on corporate income tax
  • 100% Exemption excise tax
  • 100% Exemption business property tax,
  • 100% Exemption gross receipts tax
  • Reduction in the customs duty from standard 6% to 1%
  • Provide full-time employment for at least ten residents of the U.S. Virgin Islands who have resided in the V.I. for at least one year before being hired by the tax beneficiary. Category IV Designated Services Businesses are required to hire a minimum of five (5) full-time employees.
  • Invest at least $100,000, exclusive of inventory, in an industry or business that advances the economic well-being of the USVI.
  • Meet the requirements of Sections 934 and 937 of the Internal Revenue Code.
  • Be an actual investor in the enterprise for which industrial development benefits are sought (not a contractor, subcontractor, or other person or corporation acting as an agent).
  • Comply with all federal and local laws and regulations, including environmental laws.
  • Provide an easement for free access to the beach or shoreline if the applicant will be doing business on property that adjoins the shoreline.

Eligible activities generally fall within several categories, although the VIEDC has the authority to grant benefits to any business that will advance the economic well-being of the Virgin Islands and its people​​

  • Category I: Rum production, milk/dairy production, watch & jewelry manufacturing and assembly
  • Category II: Product Assembly, Manufacturing, Repair and Maintenance, and/or Export Operations (including but not limited to Agriculture/Mariculture and Food Processing, Marine and Aircraft Industry, Machine and Heavy Equipment, Bottling and Packing)
  • Category III: Hotel/Guesthouses, Health Care, Recreation and Retirement Facilities, Transportation, Utilities (including Alternative Energy Industry) and Telecommunication.
  • Category IV: Commercial Distribution and Trading Services, Public Relations Services (including publicity and mail order firms), International Banking and Insurance entities, Business and Management Consulting Services (including strategic accounting, economic, and scientific services),  Investment Managers and Advisors, Call Centers, Family Offices, Venture Capital Management and Investment, Investment Banking and Financial Services, Film and Print Industry Activities (including news syndicate, still and motion pictures), Computer, Data, High Technology, E-Commerce and Call Services Center Businesses, Development/Engineering of Software, Blueprints, Intellectual Property, Medical (including Dental, Optical and Ophthalmological) laboratories and specialty medical services, and any other businesses serving clients located outside the Virgin Islands deemed appropriate by the Commission.
  • Category V: International Financial Service Entity* *(An applicant seeking benefits as a Category V international financial services entity is exempt from 29 V.I.C. § 708. Specific requirements for granting of benefits and its accompanying regulations but shall comply with 9V.I.C.§§ 727 and 738 and their accompanying regulations.) 

South Shore Trade Zone

Our latest initiative, the South Shore Trade Zone (SSTZ) Program, is designed to leverage the strategic advantages of the special economic zone on St. Croix. With its 30-foot port drafts, a 10,004-foot airport runway, and more than 30 acres of commercial land, the area offers prime opportunities for businesses. Eligible companies can access tax incentives similar to those provided by the EDC to operate within this special economic zone. This initiative aims to transform St. Croix into a regional transshipment hub by stimulating growth in warehousing, manufacturing, assembly, real estate development, and other industrial sectors.

  • 90% reduction on income tax
  • 100% exemption on customs duties
  • 100% exemption on excise tax
  • 100% exemption on gross receipts tax
  • 100% exemption on business property tax

Hotel Development Program

With miles of pristine coastline and large expanses of land ideal for golf courses, the U.S. Virgin Islands is ripe for hotel and resort development. The Hotel Development Program is designed to assist in the development of new hotels, resorts and other related tourism facilities in the U.S. Virgin Islands. It allows hotel developers to use a portion of their hotel occupancy and casino taxes to repay long-term loans, which can help in obtaining financing for projects

The program allows for the use of future gains in hotel room occupancy taxes and casino taxes to assist in the development areas which would not happen solely through private investment in the reasonably foreseeable future. Revenues generated from the Hotel Development and Finance Program are directed into dedicated trust funds established for each approved project. These funds, sourced from hotel and casino taxes generated by the approved project, are allocated and deposited into the respective hotel development and finance trust fund.

  • Be located on the island of St. Croix, the island of St. Thomas, the island of St. John, or the island of Water Island
  • 80% of all persons employed shall be residents of the U.S. Virgin Islands, provided that after the third year of operation, at least 20% of management, supervisory and/or technical positions must be filled by residents of the U.S. Virgin Islands, unless granted a waiver by the Commission
  • Obtain all of the applicable licenses or permits, permanent, temporary or otherwise as required by Title 27 of the V.I.C. and shall maintain during the term of the contract such licenses or permits
  • Comply with all applicable laws, rules, ordinances and regulations
  • Such other requirements as the USVIEDA may require in conformity with the Hotel Development Program

The VIEDA determines certification of the Project and shall consider the materials and opinions provided with the application and the testimony of the public together with the additional criteria outlined in the V.I. law.  

Once the Project Development Plan has been approved and certified for approval by the Governor and the Legislature, the VIEDA shall enter into good faith negotiations with the developer for a Project Agreement between the Government of the Virgin Islands and the developers setting forth the obligations of the parties outlined in the V.I. law.

If, upon consideration of the application, the VIEDA decides the Project does not comply with the requirements, the VIEDA shall notify the developer in writing stating the areas the Project fails to meet the criteria, which shall be made available for public review.

The VIEDA shall allow the development sponsor up to sixty (60) days to cure any defects. Suppose the development sponsor fails to cure the defects within sixty (60) days. In that case, the VIEDA shall deny the project's certification, and any re-submittal of the Project shall require a new application.
a large swimming pool surrounded by palm trees
theater house interior

Arts, Music, & Film Incentives (STARS Program)

The Sustainable Tourism through Arts-based Revenue Stream (STARS) is designed to advertise and promote the U.S. Virgin Islands (USVI) as an ideal location for major and minor film productions and music/audio recording projects. The diverse landscape of the USVI is perfect for the production of motion pictures, documentaries, television programs, commercials, music videos, and magazine advertising. Production companies/studios that corporately establish themselves in the USVI for purposes of long-term production, recording, distribution and/or management may be eligible for 90%-100% tax reductions through the EDC program.

  • Up To 17% Transferable Tax Credit
  • Up To 29% Cash Rebate
  • Minimum spend of $250,000
  • Minimum of 20% local resident hires (including crew, extras, actors and maximum of three (3) paid interns)
  • Include credits, i.e. “Made in the USVI” or “Portions Made in the USVI” and other acknowledgments
  • Above-the-line-crew member speak at local school or university

Learn More about Filming in the USVI

Incentives for Locating in an Enterprise Zone

Revitalizing Historic Towns:

The Enterprise Zone Commission (EZC) offers a unique and attractive tax incentive program for companies located in our historic towns. The EZC’s mandate is to revitalize once vital, vibrant communities now considered distressed. In achieving this objective within the Territory, the EZC seeks to provide appropriate investments, tax benefits, and regulatory relief of sufficient importance to encourage the business community to commit financially.

Authorizing Act Tax Incentives

The authorizing act provides tax incentives and economic development benefits free from regulatory barriers that inhibit economic growth and encourages collaboration among public, private, and non-profit entities to accomplish the desired objectives.

Designated Enterprise Zones

The designated enterprise zones are Savanne-Downstreet, Garden Street-UpStreet on St. Thomas, and the towns of Christiansted and Frederiksted on St. Croix.

Tax Increment Financing (TIF)​

Tax Increment Financing (TIF) is a technique used by the USVI government to finance development or redevelopment activities by capturing the future tax revenue benefits of real estate improvement to pay the present costs of public improvements. ​

TIF capitalizes a predetermined portion of the real property and gross receipts taxes to finance the necessary public infrastructure component of a TIF project. Tax-exempt bonds secured by that tax revenue fund the necessary highways, roads, traffic lights, storm drainage, sewer, streetlights, and various other public infrastructure that otherwise overburden budgets and make costs of development prohibitive. Upon payment of public infrastructure improvements, 100% of the new gross receipts tax revenue and real property tax revenue revert to the government.​

  • Project-based: A single project on one or more pieces of land that uses TIF only for that project

  • District-based: Large area of land targeted and identified for redevelopment. Projects that develop within the district may be eligible to use TIF as a source of financing

Tax Increment Financing may be used to finance a variety of costs and improvements on public infrastructure, land acquisition, demolition, utilities, and projects such as Sewer expansion and repair, Water supply, Street construction, Affordable/low-income housing, Libraries and schools, Traffic control, Park improvements, Parking structure, and Utility lines​

  • Existing property generates $1,000 a year in real estate taxes
  • Government designates the property as a TIF district
  • Tax base is frozen at a $1,000 level
  • The government conducts a feasibility study and “but for” test and agrees to the TIF deal and issues tax-exempt bonds to finance proposed public infrastructure improvements
  • Bonds are sold, generating cash for project construction (Bonds are only one financing mechanism, may use others bridge loans, etc.)
  • Once the project is complete, a new assessment is completed on the property ($1,500 in taxes a year as indicated)
  • Frozen property base ($1,000) continues to flow to pre-existing coffers (city, county, schools, states, etc.)
  • Increment property tax (additional $500) plus the gross receipts tax goes towards debt service on the bonds that were issued for the project
  • Increment tax and the gross receipts tax are used to pay back bonds over time
  • Once bonds are paid off, the taxes are “unfrozen,” and the full tax base generated from the new development goes to government coffers

THE KEY – No new taxes are requested, and no existing taxes are used in the financing of the project

How the Economic Development Authority
Can Help You

Unlock new horizons within the US Virgin Islands with the business potential our territory offers with the help of the USVI Economic Development Authority.
With tailored tax programs, incentives, financing options and more.

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