Starting a business in
🇻🇮US Virgin Islands
Checked November 9, 2026 · How we score
Corporate tax
21%
Top income tax
37%
Setup from
$15k
all-in, first year
Time to form
17 weeks
visit usually needed
What is the corporate tax rate in USVI?
The headline corporate tax rate in USVI is 21% in 2026, and individuals pay up to 37%. The USVI mirror code applies the same rates as the US (21% for corporations). Businesses approved by the Economic Development Authority receive a 90% reduction of income tax on income from the approved business, for an effective rate of about 2–4%, plus relief on gross receipts tax, property tax and customs duty. Benefits run for an initial ten-year period and are renewable.
| Corporate income tax | 21% The USVI mirror code applies the same rates as the US (21% for corporations). Businesses approved by the Economic Development Authority receive a 90% reduction of income tax on income from the approved business, for an effective rate of about 2–4%, plus relief on gross receipts tax, property tax and customs duty. Benefits run for an initial ten-year period and are renewable. |
|---|---|
| Personal income tax (top) | 37% Income tax follows the US federal code, so rates run from 10% to 37% on the same brackets, but bona fide residents file and pay to the USVI Bureau of Internal Revenue instead of the IRS (IRC §932). Owners of an EDA business who are bona fide residents can also receive the 90% reduction on their share of its income and on dividends it pays them. |
| Tax system | Worldwide income |
| Capital gains tax | 20%Mirror code rates apply: 0%, 15% or 20% on long-term gains depending on income. Bona fide residents pay these to the USVI, not the IRS; EDA benefits can reduce tax on qualifying business income but not all investment gains. |
| Dividend withholding (non-residents) | 30% |
| VAT / GST | None |
| Social security | No VAT or sales tax. A gross receipts tax of 5% applies to businesses (reduced or exempt for EDA beneficiaries). US Social Security and Medicare apply to employment income, and the USVI levies a 1.5%–2% hotel room tax and a property tax on real estate. |
| EU tax blacklist | Listed as non-cooperative |
Forming a company in USVI
| Usual entity | USVI LLC or corporation, with EDA approval for the tax incentive |
|---|---|
| Minimum capital | None |
| Setup cost (all-in) | $15k–$45k |
| Annual running cost | $10k–$40k |
| Time to incorporate | 17 weeks |
| Form remotely as a foreigner | No |
| Local director required | No |
| Local address required | Yes |
| Owners on public register | No |
| Statutory audit for small companies | No |
| Business banking for non-residents | Fairly easy |
Residency and visas
US citizens and green-card holders can live in the USVI without a visa. The EDA tax incentive requires the principal to be a bona fide resident under IRC §937: at least 183 days in the territory each year, a tax home there and no closer connection to the mainland US. Non-US citizens need an immigration route to the US first, so the USVI is mainly a play for Americans.
| Digital nomad visa | No |
|---|---|
| Golden visa | No |
| Ease of residency for founders | 2/5 (1 = easiest) |
Taxes for individuals living in USVI
Bona fide USVI residents who are US citizens report worldwide income to the USVI Bureau of Internal Revenue under the mirror code, so foreign income is taxed unless it falls within an EDA reduction. Only income earned through an approved EDA business gets the 90% reduction.
| Foreign income of residents | Taxed |
|---|---|
| Income tax structure | Progressive rates |
| Inheritance / estate tax | 0%The USVI itself imposes no estate or inheritance tax. US federal estate and gift tax can still apply to US citizens, with the standard exemption (about US$15 million per person in 2026), and special rules treat some USVI-citizens-by-residence as non-residents for estate tax purposes. |
| Wealth tax | No |
| Annual property tax on your home | Yes |
| Exit tax when you leave | No |
| When you become tax resident | Bona fide resident test (IRC §937): present in the USVI at least 183 days in the tax year, tax home in the USVI and no closer connection to the US mainland. |
Special tax regimes
Economic Development Authority (EDA) programme
Approved businesses in qualifying sectors (financial services, fund management, certain technology, telecoms, tourism and manufacturing) receive a 90% income tax reduction on income from the approved activity, plus gross receipts and property tax relief. They must create local jobs, invest locally and use USVI-resident staff and service providers; benefits are for an initial ten years and can be renewed.
IRC §932 and §937 residency
Under the mirror code, a US citizen who is a bona fide USVI resident at year end files only with the USVI Bureau of Internal Revenue, not the IRS. The IRS audits residency claims aggressively, so presence, tax home and closer-connection tests must be genuine.
Owner benefits
Eligible owners of an EDA business who are bona fide residents can also get the 90% reduction on the share of income and dividends they receive from it.
Pros and cons
Why founders pick USVI
- An effective tax rate of roughly 2–4% on qualifying business income for US citizens
- Fully US legal and banking system with the dollar as currency
- No VAT and no territory-level estate tax
- Federal tax filings go to the USVI, not the IRS, for bona fide residents
Watch out for
- You must genuinely live there for at least 183 days a year and the IRS audits claims hard
- EDA approval is a lengthy, expensive process with job-creation and investment conditions
- Mirror-code rates are high for income outside the EDA business
- On the EU's list of non-cooperative tax jurisdictions
Best for: US citizens running high-profit service, fund or technology businesses who can genuinely relocate · Fund managers and holding companies that qualify for EDA benefits · Americans who want to stay under the US dollar and US legal system
USVI: common questions
What is the US Virgin Islands tax rate?
The USVI uses a mirror of the US Internal Revenue Code, so rates are the same as the US: 21% for corporations and 10% to 37% for individuals. Businesses approved by the Economic Development Authority get a 90% reduction, for an effective rate of about 2–4% on qualifying income.
How does the USVI EDC program work?
The Economic Development Authority (formerly the Economic Development Commission, EDC) grants 90% income tax reductions to approved businesses and their eligible resident owners for a ten-year renewable period. Applicants must show a qualifying activity, job creation, local investment and use of local service providers, and the principal must be a bona fide USVI resident.
What is bona fide residency in the USVI?
Under IRC §937 a person is a bona fide resident if they are present in the USVI for at least 183 days of the tax year, have a tax home there and have no closer connection to the US mainland. Bona fide residents file with the Virgin Islands Bureau of Internal Revenue instead of the IRS.
Do I pay US tax if I live in the Virgin Islands?
US citizens who are bona fide USVI residents at year end file only with the USVI, though they still pay US Social Security and Medicare tax on employment income. If you do not meet the residency tests you must file with the IRS as a normal US taxpayer.
Is the US Virgin Islands a tax haven?
It is not a classic zero-tax haven, but the EU lists it as a non-cooperative jurisdiction (Annex I as of the 9 October 2026 update) because of the EDA programme and exchange-of-information concerns. For US citizens it is a legitimate, IRS-recognised territory with a large tax reduction available if conditions are met.
Sources
- USVI Economic Development Authority
- USVI Bureau of Internal Revenue
- IRS: Possessions of the US, bona fide residents
- Council of the EU: list of non-cooperative jurisdictions
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Not tax or legal advice. Rates and rules change; we check official sources and update every page, but verify with a licensed adviser in the country before acting. Spotted something out of date? Use the correction form below.