Economic Development Incentives

The RTPark and the USVI enjoy a mutually beneficial partnership with the companies that bring their business here. In addition to the diverse economic advantages for the USVI, and the technological advantages for growing, knowledge-based businesses, RTPark also offers some attractive economic incentives to tenants and Protected Cells.

Frequently Asked Questions

• 1. What Tax Incentives Are Available To RTPark Tenants?
• 2. What Obligations Does A Tenant Of RTPark Have?
• 3. What Is A Protected Cell?
• 4. What Tax Incentives Are Available To Protected Cells?
• 5. What Obligations Does A Protected Cell Have?

• 1. What Tax Incentives Are Available To RTPark Tenants?

  The tax incentives available to RTPark tenants are dependent on the type of business.

  • EDC Beneficiaries and beneficiaries of the Farmers, Fishermen and Consumers Assistance Program are already recipients of tax benefits, and are not eligible for additional benefits as RTPark tenants
  • RTPark-PC is a special entity created to enable certain types of e-commerce companies to operate under the jurisdiction of the USVI Government, and special regulations apply to it. Companies may apply to obtain a license to operate a Protected Cell through RTPark-PC, which confers certain benefits and obligations, which are described in a the section pertaining to Protected Cells below.
  • Under certain circumstances, Knowledge-Based Businesses may apply for EDC benefits administered by the EDA, subject to 1) a determination by RTPark that such business is not otherwise a candidate for a Protected Cell, and 2) a referral of such business by RTPark to the EDA. EDC benefits are substantially the same as the benefits offered through RTPark; however, certain terms and conditions differ. For more details on EDA and the EDC program, visit their web site.
  • Support Businesses are not eligible for any specific benefits by way of being RTPark tenants, although they may be eligible to apply for EDC benefits or the through the Farmers, Fishermen and Consumers Assistance Program.

  In addition, any firm may be eligible for a Worker Training Tax Credit, which allows a credit of 50% against eligible training expenses if the firm provides training to five or more employees in the USVI. The maximum credit is $1,000.

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• 2. What Obligations Does A Tenant Of RTPark Have?

  RTPark tenants have a number of obligations, both at the time of application and on an ongoing basis. These obligations include, but are not limited to, the following:

  • They must continue to adhere to the requirements set forth in the Tenant Profile and Entry Selection Criteria section of the tenant application documents.

  • Tenants approved as Knowledge-Based Businesses must pay an Annual Franchise Tax as follows:

    Gross Receipts	Franchise Tax Payable
    ≤$1MM	$200
    $1MM≤$5MM	$2,000
    $5MM≤$10MM	$5,000
    $10MM≤$20MM	$12,500
    $20MM≤$50MM	$15,000
    $50MM≤$100MM	$20,000
    $100MM≤$250MM	$25,000
    > $250MM	At the discretion of the RTPark Board, but in no case less than $25,000

  • Unless they are beneficiaries of another benefits program, all tenants will be required to pay taxes as determined by the Government of the USVI to be applicable to businesses in general
  • Tenants will be required to obtain a business license to operate within the USVI, and to adhere to all relevant laws and regulations as determined by the Government of the USVI
  • RTPark is committed to maintaining an image of a reputable and prestigious University Park that is untainted by illegal business activities or questionable business dealings. Accordingly, RTPark maintains a zero tolerance policy for illegal, pornographic, money laundering, gambling or other questionable or illicit business activities and dealings;
  • Each tenant will be expected to comply with the RTPark’s “Know Your Customer” regulations, which require tenants to:
    • determine the identity of its customers;
    • determine normal and expected transactions for its customers;
    • determine its customers’ sources of funds;
    • identify transactions that are not normal or expected transactions for the customer; and
    • report suspicious transactions under existing suspicious activity reporting requirements to the appropriate governmental authorities;

  At least one formal review of each tenant by RTPark management is required each year, at which time RTPark reviews with the tenant the fulfillment of responsibilities and obligations of each party under the tenant Lease Agreement or as well as changes in the bylaws, structure or ownership of the tenant company.

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• 3. What Is A Protected Cell?

  A Protected Cell created only with the approval of RTPark-PC can take any corporate form that is legal in the USVI and provides limited liability for some or all of its shareholders, members or partners (including by way of example a corporation, a limited liability company, or limited liability partnership). RTPark-PC extends corporate tax incentives to Protected Cells as an equity partner.

  Protected Cells will be expected and required to operate with a high level of transparency while demonstrating exemplary ethics and professionalism. Qualifications and expectations for Protected Cells are established in USVI law, Guiding Principles established between UVI and RTPark, and RTPark policies and procedures. For full details, you can download these guidelines directly from our RTPark applications page.

  Protected Cell status applies only to the specific entity and not to its affiliates, subsidiaries or parent entities. Stakeholders of Protected Cells may participate in certain Protected Cell benefits to the extent those benefits are derived directly from the operations of the Protected Cell and not of the separate operations of the Stakeholder. Protected Cell status cannot be encumbered by the Applicant in any way, including (without limitation) the use of Protected Cell status as collateral for any indebtedness.

  The Act stipulates that RTPark-PC, pursuant to 17 VIC Chapter 43 has the right to establish Protected Cells within the USVI.

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• 4. What Tax Incentives Are Available To Protected Cells?

  RTPark tenants that are Protected Cells automatically qualify for certain tax benefits administered by RTPark-PC, as follows:

  • (Up to) a 90 percent (90%) reduction in income tax liability shown on its tax return for the taxable year on a) income from USVI sources and b) income that is “effectively connected” with the conduct of a USVI trade or business pursuant to IRC 934(b)(1);
  • An exemption on taxes on real property to the extent that it is utilized in one of the businesses or industries for which the Protected Cell has been established;
  • An exemption from gross receipts taxes on receipts from the business for which the Protected Cell has been established;
  • An exemption from excise taxes on building materials, tools, pipes, pumps, conveyor belts or other appliances, materials and supplies necessary for use in the construction, alteration, re-construction or extension of the physical plant or facilities of RTPark and/or the Protected Cell;
  • An exemption from excise taxes on raw materials and component parts brought into the USVI for the purpose of producing, creating or assembling an article, good or commodity;
  • An exemption from withholding tax with respect to payments of interest and a four percent (4%) withholding rate on the payments of dividends and royalties;
  • A reduction in customs duties to one percent (1%) on raw materials and component parts brought into the USVI by a Protected Cell to produce, create, or assemble an article, good, or commodity;
  • The benefits will apply to shareholders, members, partners, grantors, beneficiaries, and other direct or indirect owners of RTPark-PC or a Protected Cell who are established in the USVI or who are bona fide residents of the USVI in accordance with IRC 932(c), as amended. Such shareholders, members, partners, grantors, beneficiaries, or other owners are entitled to a ninety percent (90%) reduction on income taxes payable with respect to income derived from the dividends or distributions paid to them by RTPark-PC or a Protected Cell; and

  The Protected Cell will not be subject to any otherwise applicable taxes or tax increases that may be subsequently enacted by the Government of the USVI during the period of its benefits, which is the lesser of fifteen (15) years or the period of time as a Protected Cell as set out in its plan of operation. Benefits will be renewable under rules to be developed by the RTPark Board.

  RTPark Incentives: Defined in 17 VIC Chapter 43 S. 806(b)-(g); for ease of reference, 806 is comprehensively paraphrased below:

  RTPark-PC shall pay an annual franchise tax to the Department of Finance based on the worldwide gross receipts of each of the RTPark-PC’s Protected Cells. Each Protected Cell with annual worldwide gross receipts less than or equal to $1,000,000 shall be subject to a franchise tax equal to $200. Each Protected Cell with annual worldwide gross receipts greater than $1,000,000 but not more than $5,000,000 shall be subject to a franchise tax equal to $2000. Each Protected Cell with annual worldwide gross receipts equal to or greater than $5,000,000 but not more than $10,000,000 shall be subject to a franchise tax equal to $5,000. Each Protected Cell with annual worldwide gross receipts greater than $10,000,000 but no greater than $20,000,000 shall be subject to a franchise tax equal to $12,500. Each Protected Cell with annual worldwide gross receipts greater than $20,000,000 but no greater than $50,000,000 shall be subject to a franchise tax equal to $15,000. Each Protected Cell with annual worldwide gross receipts greater than $50,000,000 but no greater than $100,000,000 shall be subject to a franchise tax equal to $20,000. Each Protected Cell with annual worldwide gross receipts greater than $100,000,000 but no greater than $250,000,000 shall be subject to a franchise tax equal to $25,000. Each Protected Cell with annual worldwide gross receipts greater than $250,000,000 shall be subject to a franchise tax as determined by the Board but in no event less than $25,000.

  • Each Protected Cell shall be exempted from the payment of the following taxes:
  • Each Protected Cell shall be entitled to reduce the amount of each payment of estimated income taxes by ninety percent (90%); and reduce the income tax liability shown on its income tax return for the taxable year by ninety percent (90%) on income from Virgin Islands sources and income that is effectively connected with the conduct of a Virgin Islands trade or business pursuant to IRC Sections 934(b)(1) and 937.
  • Taxes on real property imposed under 33 VIC Subtitle 2 to the extent that same is utilized in one of the businesses or industries for which RTPark-PC has been established.
  • Gross receipts taxes imposed under 33 VIC Chapter 3.
  • All excise taxes on building materials, tools, pipes, pumps, conveyor belts or other appliances, materials and supplies necessary for use in the construction, alteration, reconstruction or extension of the physical plant or facilities of the Research and Technology Park imposed under 33 VIC Chapter 3.
  • All excise taxes on raw materials and component parts brought into the Virgin islands for the purpose of producing, creating or assembling an article, good or commodity imposed under 33 VIC Chapter 3.
  • Notwithstanding any other law, raw materials and component parts brought into the USVI by a Protected Cell for the purpose of producing, creating or assembling an article, good or commodity shall be imported into the USVI at a customs duty rate of one percent (1%).
  • Exemptions from or reductions in withholding taxes
  • Every person who receives a payment of interest, dividends or royalties subject to the tax imposed by IRC Section 871(a)(1), 881, or 884 as applicable in the USVI from RTPark-PC or a Protected Cell shall be exempted from the payment of 100 percent of such tax on interest and shall be subject to a withholding tax of four percent on a payment of dividends or royalties.
  • RTPark-PC shall be exempted from the requirement to withhold tax pursuant to IRC Sections 1441 and 1442 with respect to the payments referred to in Subsection (1) of this Section to the extent that such payments are exempt from the tax described in said Subsection.
  • All benefits provided under Subsections 806(a) and 806(b) of this Chapter shall be applicable to any Protected Cell as defined in Section 801(a) of this Chapter.
  • The provisions of this section shall apply to shareholders, members, partners, grantors, beneficiaries, or other direct or indirect owners of RTPark-PC or a Protected Cell thereof as defined in Section 801(a) of this Chapter who are established in the USVI or who are bona fide residents of the USVI in accordance with IRC Section 932(c). Such shareholders, members, partners, grantors, beneficiaries, or other owners shall be entitled to a ninety percent (90%) reduction on income taxes payable with respect to income derived from the dividends or distributions paid to them by RTPark-PC or a Protected Cell thereof as defined in Section 801(a) of this Chapter.

  Each Protected Cell shall receive the tax benefits provided for in this section upon the prior written approval of the RTPark Board of Directors of a plan of operation with respect to the respective Protected Cell. The Protected Cell shall not be subject to any otherwise applicable taxes or tax increases that may be subsequently enacted by the Legislature of the USVI during the period of its benefits, which is the lesser of fifteen (15) years or the period of time as a Protected Cell. Benefits shall be renewable in increments of ten years, initially, and five years thereafter under rules to be developed by the RTPark-PC Board.

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• 5. What Obligations Does A Protected Cell Have?

  Protected Cells have a number of obligations, both at the time of application and on an ongoing basis. Applicants will be required to execute a Protected Cell License/Operating Agreement which will include a commitment to organize and manage the Protected Cell in a manner that is consistent with both the guiding principles of RTPark and the specific obligations that Protected Cells have towards RTPark and RTPark-PC. These obligations include, but are not limited to, the following:

  • At least one formal review of each Protected Cell by RTPark management is required each year, at which time RTPark reviews with the tenant the fulfillment of responsibilities and obligations of each party under the Protected Cell License/Operating Agreement;
  • RTPark is committed to maintaining an image of a reputable and prestigious University Park that is untainted by illegal business activities or questionable business dealings. Accordingly, RTPark maintains a zero tolerance policy for illegal, pornographic, money laundering, gambling or other questionable or illicit business activities and dealings;
  • Each Protected Cell will be expected to comply with the RTPark’s “Know Your Customer” regulations, which require each Protected Cell and tenant to:
    • determine the identity of its customers;
    • determine normal and expected transactions for its customers;
    • determine its customers’ sources of funds;
    • identify transactions that are not normal or expected transactions for the customer; and
    • report suspicious transactions under existing suspicious activity reporting requirements to the appropriate governmental authorities;

  • Each Protected Cell will be required to pay a franchise tax as shown in the following table:

    Gross Receipts	Franchise Tax Payable
    ≤$1MM	$200
    $1MM≤$5MM	$2,000
    $5MM≤$10MM	$5,000
    $10MM≤$20MM	$12,500
    $20MM≤$50MM	$15,000
    $50MM≤$100MM	$20,000
    $100MM≤$250MM	$25,000
    > $250MM	At the discretion of the RTPark Board, but in no case less than $25,000

  The granting of Protected Cell status allows a qualified company to engage in activities for which it is licensed, and to enjoy the tax benefits defined in the Act for the eligible business activities in which the Protected Cell engages. As a tenant of RTPark, a Protected Cell is required to:

  • Run all of its electronic transactions through web servers physically located within the USVI;
  • Perform all of its e-commerce transactions with the approved or preferred e-commerce partners;
  • Perform its worldwide banking with approved banking partners or financial institutions located in the USVI;
  • Operate its business in a legal and ethical manner;
  • Report periodic financial data to RTPark including providing RTPark with an annual audited financial report;
  • Pay RTPark invoices promptly for establishment, annual renewal fees, or other billings;
  • Promptly pay to RTPark pursuant to its agreement with RTPark any and all royalties payable to the RTPark;
  • Promptly pay to RTPark when due its annual franchise taxes payable to the USVI Department of Finance based on the worldwide gross receipts;
  • Provide RTPark with an annually-updated three (3)-year plan of operations together with employment projections for Virgin Islands-based employees and associated skills requirements;
  • Collaborate and interact with UVI in workforce development initiatives and joint research as opportunities become available;
  • Participate with RTPark and UVI in a Community Reinvestment Program;
  • Comply with all applicable RTPark and governmental regulations regarding conducting business activities in RTPark and the USVI;
  • Indemnify RTPark, UVI and the Government of the USVI from claims and lawsuits brought against the Protected Cell or arising out of the Protected Cell’s operations; and
  • Conduct an annual meeting of the company’s Board of Directors in the USVI.

  Each Protected Cell will be required to a) obtain a Protected Cell Business License from the USVI Department of Licensing and Consumer Affairs and b) adhere to all relevant laws and regulations as determined by the Government of the USVI.

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Important Information Regarding the Roles of RTPark and EDA in Administering USVI Corporate Tax Incentives

For information on the division of responsibilities between RTPark and the USVI Economic Development Authority (EDA), see RTPark-EDA MOU and Agreement.

RTPark and EDA share responsibility for administering corporate tax incentive programs in the USVI, and our economic development programs offer these incentives for one purpose: to strengthen and diversify the economy of the USVI. The harmonization of our tax incentives to US Federal law relies upon your proper corporate stewardship as well as proactive steps by RTPark and EDA to monitor and assure compliance. The incentives offered by RTPark and EDA are very similar, but the mandates of each organization differ. RTPark is specifically tasked with fostering the development of a robust, globally competitive knowledge-based and network-connected economy in the USVI, and RTPark has invested significantly in making this possible. For this reason, RTPark’s specific authority encompasses “Knowledge-Based Businesses” as defined in law, and includes e-commerce and other network-driven businesses among others. For any such business, an application for corporate tax incentives must be made formally to RTPark, and not to EDA. In certain cases, RTPark may subsequently and solely determine to refer such business to EDA for consideration, but any such determination will be made only after a formal application is tendered to RTPark. Prospective applicants are specifically cautioned against joining an existing tax-incented business (e.g., as a partner) in the interests of expediency in order to gain access to corporate tax incentives. RTPark and EDA are required to scrutinize all partnership and ownership changes, and to verify that the business remains engaged in the same line of business following any change. Please notify RTPark or EDA immediately in the event that you have received conflicting advice from an existing tax-incented company or advisory firm.

Other Documents

Looking for information on RTPark Governance, including Bylaws and Guiding Principles? See the Governance page.

For more information on how RTPark’s corporate tax incentives are harmonized to US Federal law, including links to US Treasury regulations and independent Tax Opinion Letters, see the Other Reports page. From that page, you may also download copies of testimony presented by RTPark to the USVI Senate reporting material developments and supporting budget proposals for a given fiscal year.