How does the EDC Work When Moving to St. John?

There are so many reasons to move to St. John: the laid-back lifestyle, the tropical paradise experience of living on a lush island with incredible beaches, the endless variety of activities to do and places to explore, the close proximity to the rest of the Virgin Islands, the near-perfect temperatures year-round, etc. If you’re looking to start a business here, though, there’s another huge reason to relocate to St. John—and that’s the Economic Development Commission (EDC).

The EDC is a competitive offshore tax benefit program sanctioned by the U.S. government (under section 934 of the Internal Revenue Code) that offers a unique and attractive tax incentive for companies located in the US Virgin Islands. The EDC seeks to attract a variety of different businesses to the territory including but not limited to manufacturers, high-technology assembly companies, pharmaceutical companies, hotels, service businesses such as call centers, consulting companies and financial services including hedge funds and money managers. The goal of the EDC is to provide the necessary incentives to make your business expansion or relocation a reality.

If combined with residency in the USVI, the EDC offers up to 90% exemption from federal tax code liability to the Virgin Island Internal Revenue Bureau for both your business and dividends passing through to your personal return. You’ll also receive reduction in the customs duty form the standard 6% to 1%, 100% exemption from excise tax, 100% exemption from real property taxes due on property used in your business, 100% exemption from gross receipts tax (currently imposed at a rate of 5%) and tax reduction on royalty income from software developed in the USVI and sold to non-US customers.

To qualify you must meet these requirements: make the statutorily required capital investment in a new business, hire a minimum of five to ten employees (dependent upon the type of business) who have been residents of the USVI for at least one year on the date of hiring, procure goods and services locally and contribute to local charitable organizations.

In addition to being an ideal place to live, St. John is also a prime location for you to do business, save on business taxes and maximize your company’s profits. Real estate ownership on St. John can be a dream come true and the EDC, as well as improved communications that allow people to work from St. John, has inspired a segment of entrepreneurs who can live their island-style dream and commute via a laptop or mobile phone.