The Economic Opportunity
Ushering in a New Era of Development
The scale of investment reshaping the U.S. Virgin Islands is unmatched anywhere in the Caribbean. Backed by over $24 billion in federal funding and more than 900 projects, the islands are entering a generation-defining era of construction, innovation, and economic expansion.
Key advantages include:
- $24+ billion in active federal investment
- 900+ infrastructure and development projects
- Robust tax incentives
- Strategic exemption from the Jones Act
- Gateway location between the U.S. mainland and Latin America
USVI Economic Incentive Programs
Economic Development Commission (EDC)
Economic Development Commission (EDC)
Economic Development Commission (EDC)
Up to 90% reduction in personal and corporate income taxes, and exemptions from gross receipts, excise, and property taxes for qualifying businesses establishing a physical presence in the Territory.
South Shore Trade Zone
Economic Development Commission (EDC)
Economic Development Commission (EDC)
Designed to attract investment in warehousing, manufacturing, assembly, real estate development, and industrial operations, the SSTZ aims to transform St. Croix into a center of regional commerce and transshipment — linking North American supply chains to Caribbean, Latin American, and global markets.
Hotel Development Act
Economic Development Commission (EDC)
Research & Technology Park (RTPark)
Allows developers to recapture up to 100% of occupancy taxes generated by a new or renovated hotel and reinvest them into construction or improvements.
Research & Technology Park (RTPark)
Research & Technology Park (RTPark)
Research & Technology Park (RTPark)
Provides benefits for technology, consulting, and professional-services companies, with its own regulatory and compliance framework.
Enterprise & Commercial Zones
Research & Technology Park (RTPark)
Enterprise & Commercial Zones
Designed to spur urban renewal and historic redevelopment, offering tax credits, permitting support, and access to financing tools.
Opportunity Zones
Research & Technology Park (RTPark)
Enterprise & Commercial Zones
Multiple designated tracts across St. Thomas and St. Croix allow investors to defer or eliminate capital gains tax when investing in local development projects.
Expert Legal Counsel for Your Business
Navigating One of the Most Distinct Legal Systems in the United States
Doing business in the U.S. Virgin Islands means operating within one of the most distinctive legal environments in the American system. Though the Territory is under U.S. jurisdiction, its laws, courts, and regulatory frameworks differ dramatically from those of any state — and those differences matter.
Since the creation of the Virgin Islands Supreme Court in 2004 and the pivotal Banks v. International Rental & Leasing Corp. decision in 2011, the Virgin Islands has been developing its own common law system from the ground up. Unlike states that rely on centuries of precedent, the USVI’s judiciary often builds new legal principles issue by issue, guided by a unique three-part test that compares all 50 states and then adopts the rule that best serves the Territory’s interests.
For businesses, this means that every contract, permit, or dispute here unfolds within a jurisdiction where the law is still being written — and the difference between success and setback often comes down to having experienced local counsel who understands how the system actually functions.
USVI: Examples of Legal Nuances
The Wrongful Discharge Act
The Wrongful Discharge Act strictly limits an employer’s right to terminate workers to nine specific statutory reasons — exposing businesses to substantial penalties if violated.
English Rule of Damages
The English Rule governs attorney’s fees, meaning the losing party in civil litigation pays the prevailing party’s legal fees — a major shift from the mainland’s “each pays their own” standard.
Exemption from the Jones Act
Exemption from the Jones Act
Exemption from the Jones Act allows foreign-flagged ships to deliver goods directly between U.S. ports and the Territory, creating compliance challenges in shipping, customs, and logistics.
Mirror Code Taxation
Exemption from the Jones Act
Mirror Code Taxation means the U.S. Internal Revenue Code applies locally, but with every reference to “United States” interpreted as “Virgin Islands.” The Virgin Islands Bureau of Internal Revenue (VIBIR) enforces this code independently of the IRS, often with differing interpretations and priorities.
Separate Customs Zone
Adding to its uniqueness, the Virgin Islands operates as a separate customs zone from the continental United States, with its own import duties and exemptions distinct from federal customs law.
Applicability of Federal Law
Not every federal law automatically applies here — each statute and treaty must be examined individually to determine whether Congress expressly extended it to the Territory. This makes legal interpretation in the Virgin Islands both intricate and highly specialized
Positioning the Territory as a Global Maritime Powerhouse
A Revitalization Plan for U.S. Maritime Trade, Commerce, and Strategic Competition
One of the most transformative initiatives under discussion is the creation of an international ship registry based in the U.S. Virgin Islands — an innovation that could redefine the Territory’s role in global trade, logistics, and defense.
Backed by the Center for Ocean Policy and Economics (COPE) and supported by Governor Albert Bryan Jr., the proposal seeks to establish the Virgin Islands as a premier maritime jurisdiction operating under U.S. oversight — but with a level of flexibility and competitiveness unmatched by the mainland.
Because the U.S. Virgin Islands are exempt from the Jones Act, vessels registered here would not be bound by the requirement that ships engaged in U.S. coastwise trade be U.S.-built, U.S.-owned, and U.S.-crewed. This exemption gives the Territory a rare advantage: it allows ships to operate under the U.S. flag and legal protections, while maintaining the commercial efficiency and cost structure of international registries.
The United States has long faced a critical shortage of U.S.-flagged ships capable of international trade. Today, fewer than 200 vessels fly the U.S. flag globally, and only around 80 participate in international commerce. This shortfall poses serious logistical challenges for U.S. defense, humanitarian relief, and supply-chain resilience — forcing reliance on allied or foreign-flagged vessels during times of crisis.
The U.S. Virgin Islands Registry would expand the number of vessels under U.S. jurisdiction, strengthening national security while stimulating a new wave of economic activity across the Territory. It would create a jurisdiction where ships could be registered, surveyed, inspected, maintained, and crewed, generating demand for maritime law, insurance, logistics, ship repair, and professional services.
For the Virgin Islands, the registry could serve as a permanent economic engine — attracting global shipowners, maritime financiers, and logistics firms seeking the legitimacy of a U.S. flag combined with the flexibility of an offshore jurisdiction.
The establishment of a U.S. Virgin Islands registry would create a robust maritime services industry within the Territory:
- Surveying and inspection services for compliance with international maritime standards
- Vessel financing and insurance operations anchored in the U.S. legal framework
- Port management, warehousing, and logistics infrastructure expansion
- Legal, regulatory, and arbitration work tied to maritime and commercial contracts
- Training and certification programs for Virgin Islands residents to participate in the maritime sector
Over time, the registry could position the U.S. Virgin Islands as the Caribbean’s preeminent maritime and shipping jurisdiction, complementing its tourism and energy sectors with a durable, high-value industry that connects regional trade to global networks.
For investors, operators, and maritime professionals, the proposed registry represents both an economic opportunity and a policy breakthrough — a chance to align with U.S. maritime law while accessing the operational flexibility that global shipowners demand.
For the Territory, it would mean sustained, high-skill employment, international recognition, and a strategic role in global shipping and logistics.
Tully Law, PLLC is closely monitoring the development of the U.S. Virgin Islands Ship Registry initiative. Our firm advises clients on maritime, corporate, and regulatory implications of operating within U.S. territorial waters, helping early entrants position themselves for participation in what could become one of the most significant economic evolutions in the Territory’s history.
