Economic Structure
According to the EIU's Country Profile for December 2011, Tourism is the most important sector of the economy and is based mainly on luxury accommodation and yacht charters, with yachting visitors outnumbering hotel guests in most years.  The economy is dependent on tourism and financial services, which represented 15.9% and 36.5% of GDP respectively in 2004, the latest year for which data are available.

Economic Performance
Following a downturn in 2002-03, economic growth is estimated to have picked up in 2004-06, led by tourism and financial services. Real GDP growth in 2007 was estimated at 9.5%, up from 7.2% in 2006. The use of the US dollar as the currency of the BVI and the strength of the economy help to keep inflation under control, although price increases for imports from other Caribbean Community (Caricom) countries tend to result in inflation slightly above US levels.

Since the mid-1980s, the BVI has become one of the world's leading offshore financial centres specialising in the registration of international business companies (IBCs). Tourism was affected by the international economic downturn and fears of terrorism in 2001-03, but stopover arrivals have since recovered and reached 358,056 in 2007.

Economic Policy
A memorandum on co-operation and partnership with the UK sets out a development framework, including specific plans for action in different policy areas. Licence fees from international companies (particularly in financial services) setting up in the British Virgin Islands (BVI) make up close to 60% of current fiscal revenue and have contributed to the growth in revenue since the 1980s. 

A 2005 tax reform removed the distinction between onshore and offshore company tax regimes, to address EU and OECD concerns over ?ringfencing ?. Income tax payable by individuals and local companies was replaced by a payroll tax on earnings over US$6,500, with 8% payable by employees, 2% by small business employers and 6% by large businesses.

Source: Economist Intelligence Unit Country Profile. December 2011