British Virgin Islands Added To The Italian Whitelist


The British Virgin Islands (“BVI“) and Cayman Islands have recently been added to an updated version of the ‘whitelist’ published by the Italian government by Legislative Decree 239/1996, which lists those countries that Italy recognises as having adequate cooperation and tax information exchange arrangements with the Italian authorities.

This development will now mean that investment funds, financing entities and other companies based in the BVI and the Cayman Islands will be able to invest in certain types of Italian assets (such as bonds and loans and other similar securities issued by Italian companies) and receive interest payments exempt from some Italian taxes. BVI and Cayman companies will also be able to invest in certain types of Italian real estate, investment funds, repos and securities lending transactions and benefit from relevant tax exemptions, paving the way for BVI and Cayman vehicles to be used in many types of Italian capital markets, structured finance and other investment fund transactions.

This welcome news reflects the BVI and the Cayman Islands’ cooperative and transparent approach with foreign governments with regard to the exchange of tax information. The BVI and the Cayman Islands have signed and brought into effect a bilateral tax information exchange agreement with the Italian authorities and also implemented automatic exchange of information programmes under initiatives such as the OECD’s Common Reporting Standard and US FATCA.

The BVI and the Cayman Islands are two of the largest domiciles for private companies, alternative investment funds, hedge and private equity funds and capital markets transactions. These entities play a valuable role in the global economy, acting as useful allocators of international investment capital (increasingly from large pension funds) and can provide an advantageous source of inward investment for businesses in Italy and elsewhere, which ultimately can help create jobs and taxable revenue in those jurisdictions.

It is hoped that this positive step forward will encourage other jurisdictions to similarly recognise the BVI and the Cayman Islands’ commitment to transparency and cooperation, and take advantage of the opportunity to use BVI and Cayman companies and investment funds to help stimulate inward investment and economic growth in those countries. [Source: Maples & Calder]