Lawyers and accountants flee financial centre popular with China after hurricane Irma.
Large accounting and law firms have moved to evacuate staff from the British Virgin Islands after hurricane Irma killed at least five people and devastated infrastructure in an overseas territory known as a hub for offshore incorporations and financial court cases. Although some homes and offices remained intact, most were without power and water, prompting professional services firms with a presence in the British overseas territory to start evacuating staff to more habitable locations. The British army has deployed 120 troops to the islands following reports of looting. KPMG, the “big four” accountancy firm, said all of its staff were in the process of being evacuated from the territory. “Power is currently down and communications are limited,” a spokesperson said. Rival accountancy Deloitte is evacuating most of the 30 employees it has in the BVI and has closed its office there, according to a spokesperson. UK competitor EY evacuated most of its 10 staff in the islands before Irma hit. It is evacuating those who chose to stay behind for personal reasons to nearby islands such as Bermuda and the Cayman Islands, which were less affected by the storm. Offshore companies in the BVI have assets of more than $1.5tn, with BVI companies particularly popular in Asia. Two-fifths of BVI-held assets are accounted for by Hong Kong and China. Videos circulated by BVI residents on social media showed scenes of immense destruction as the territory took the full brunt of Irma’s fury late last week. Houses were destroyed, trees felled and sailboats slammed into harboursides. PwC also evacuated two of its three employees in the BVI before the storm hit. One staff member opted to stay at home with her family. “With regards to the office, it sustained some damage to the roof but otherwise appears to be fine. We hope to be back operating normally as soon as possible,” a spokesperson said.
While companies registered in the BVI have legal control of their assets, little physical business happens on the islands other than tourism. Instead, the offshore financial centre is a popular base for incorporating companies whose owners wish to take advantage of its low corporate tax rates, its strong business secrecy laws, or both.
The Financial Services Commission — home to the BVI corporate registry that houses records for over 1m companies that collectively own $1.5tn of assets worldwide — survived the hurricane, according to a statement from BVI premier Orlando Smith. Grant Thornton, the Chicago-based accounting firm, evacuated all but two of its nine staff in the BVI last week with their dependants, in a privately booked aircraft. One employee stayed behind to be close to family members; another did not want to leave a dog behind but was later evacuated. Hugh Dickson, a managing director at Grant Thornton, said the evacuees had been taken to the Cayman Islands and put up in rented apartments. “The Cayman authorities have been first class and good about relaxing the usual work permit restrictions [and allowing] people to bring undocumented pets into the island,” he said. “Looking at the photographic coverage [it will be a] minimum of a month, realistically two, [before staff can return to the BVI],” he said. Offshore law firm Conyers Dill & Pearman, which employs 18 lawyers and 48 staff in the BVI, evacuated all who wished to leave on Friday to San Juan in Puerto Rico. The staff, who were flown to San Juan in private aircraft and helicopters, are now being relocated to Conyers’ offices in the Cayman Islands and Bermuda.
Conyers’ BVI office, like those of most financial services organisations in the offshore centre, is in Road Town, the hillside capital of Tortola, the most populous of the string of more than 50 islands in the British Overseas Territory. The firm’s office was not badly damaged but staff had to leave because Tortola was devastated, according to Robert Briant, head of Conyers’ BVI office. “We cannot operate. There is no electricity. Law and order is being developed but people don’t have places to live.”
Harneys, which according to the Chambers & Partners directory is the biggest law firm on the BVI by number of lawyers, was similarly evacuating staff from the islands, a senior staff member said. Harneys also has closed its BVI office. Several other professional services companies with a presence in the BVI said on their websites or via social media that their offices there were closed. These include Appleby, a law firm specialising in offshore work; JTC Group, a provider of wealth management services; and Baker Tilly, the accounting firm. Mr Briant, who is also a director of trade body BVI Finance, said it was unclear when the Eastern Caribbean Supreme Court — a litigation venue for high value insolvency and fraud cases including those connected to the collapsed empires of Bernard Madoff and convicted Texas fraudster Allen Stanford — would be up and running.
News source: Financial Times