EDC Application Solutions
To become an EDC beneficiary, a company must have a valid Certificate for tax benefits issued by the U.S. Virgin Islands Economic Development Commission (“EDC”). A company must complete an application, submit it to the EDC and be approved by the EDC after a public hearing with the EDC Commission in order to be issued an EDC Certificate for tax benefits. It is not unusual for the process to take 3 to 12 months, or more, from application submission to approval.
Pursuant to the EDC Program law, a summary of some typical requirements for applicants to be granted an EDC Certificate for tax benefits are as follows:
- Provide full-time employment for at least 10 local residents of the U.S. Virgin Islands who have resided in the V.I. for at least one year prior to being hired by the EDC beneficiary company.
- Provide full health benefits to all employees.
- Provide at least a 5% employer-provided retirement plan contribution for all employees via a 401(k) or similar type of retirement plan.
- Invest at least $100,000, exclusive of inventory, in an industry or business that advances the economic well-being of the USVI.
- Contribute at least $50,000 to local USVI charities annually. Additionally, this charitable contribution amount is increased by 2.5% per year.
- The individual owner must be an actual investor in the enterprise for which industrial development benefits are sought, not a contractor, subcontractor or other person or corporation acting as an agent.
- Comply with all federal and local laws and regulations, including environmental laws.
- Provide an easement for free access to the beach or shoreline, if the applicant will be doing business on property that adjoins the shoreline.
The above-stated requirements are a guide as to typical requirements that have been imposed in the past by the EDC. The actual requirements imposed on a new applicant will likely vary for each applicant as determined by the EDC.
For companies wishing to outsource the implementation and preparation of the EDC application and supporting documentation, Clearwater and its associated counsel will work with the company’s personnel to develop each requisite piece of information required to meet EDC assessment and feasibility requirements, program application submission, and public hearings.
Application Process
According to the Economic Development Authority, applications shall be filed with the EDC utilizing the EDC application provided as a download from their site or a hard copy provided by EDC. The original and 14 copies shall be filed with the Commission at their address in either St Thomas or St Croix.
- Upon receipt of application by the predetermined deadline established for each month, each application is date/time stamped and assigned a file number and routed accordingly.
- A date is agreed upon for the applicant’s presentation of their application before the board of Directors at a pre-scheduled monthly public hearing.
- Subsequent to the public hearing, the EDC will schedule the entire application package, including transcripts from the public hearing, for consideration of a grant of benefits at the predetermined monthly board decision meeting.
- Following approval by the board, the approved package is forwarded to the Governor for his review and approval.
The following fees apply to applications filed under the respective categories under the law:
| Category I | $1,500.00 |
| Category II | $3,500.00 |
| Category IIA | $5,000.00 |
| Category III | $5,000.00 |
The application process flow and timeline are described in the following chart:
| Activation Fee | Annual Compliance Fee | |
| Category I | $1,000.00 | $1,500.00 |
| Category II | $1,500.00 | $3,000.00 |
| Category IIA | $2,500.00 | $7,500.00 |
| Category III | $3,500.00 | $5,000.00 |
Application & Meeting Schedule
| APPLICATION DEADLINE: |
PUBLIC HEARING: | BOARD MEETINGS: |
| January 22, 2009 | ||
| January 15, 2009 | February 12, 2009 | March 05, 2009 |
| February 26, 2009 | March 26, 2009 | April 16, 2009 |
| April 09, 2009 | May 07, 2009 | May 28, 2009 |
| May 21, 2009 | June 18, 2009 | July 09, 2009 |
| July 02, 2009 | July 30, 2009 | August 20, 2009 |
| August 13, 2009 | September 10, 2009 | October 01, 2009 |
| September 24, 2009 | October 22, 2009 | November 12, 2009 |
| November 05, 2009 | December 03, 2009 | December 10, 2009 |
Attorney & Misc. Fees
In addition to the above fees and schedule, it is typical for an independent applicant to incur attorney fees in the range of $25,000 to $50,000 to reach an approval stage in the EDC application process, and could be ongoing from there.
The above does not include time and expenses for VI business entity creation, registering & licensing, redomiciling, setting up office space and services, etc.
Clearwater affiliates comprehensively represent clients in all phases of applying for and compliance with the United States Virgin Islands Economic Development Program to secure and retain EDC benefits.
*** It is also noteworthy that Clearwater Partnership affiliates can significantly reduce the time and expense to receive full EDC benefits for its eligible partners, as well as reduce the initial Applicant investment of $100,000 (exclusive of inventory), ongoing EDC expenses such as annual charitable contribution requirements, and more. Please see the EDC Partnering Solutions page for details.
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For additional information about Clearwater Consulting Concepts services, call (340) 775-2888 or allow us to contact you by completing our web form.
