U.S. VIRGIN ISLANDS EXPORT CORPORATION (VIEXCO)
BASED ON THE EXPORT EXCEPTIONS AND EXEMPTIONS UNDER THE IRC, THIS NEW EXPORT TAX BENEFIT VEHICLE CREATED BY EXPORT ASSIST IS STRUCTURED TO HELP YOU BRING TRAPPED SECTION 956 FUNDS INTO THE U.S. WITHOUT SUBPART F EXPOSURE AND TO USE FOREIGN TAX CREDIT CARRYFORWARDS.
For more than 30 years, Export Assist has
been incorporated in the U.S. Virgin Islands
(USVI) and operating
in St. Thomas. Our staff will incorporate the VIEXCO within 24 to
48 hours and perform all implementation, annual management
and general accounting services necessary for operation and compliance monitoring.
Export tax benefits only begin upon incorporation.
After years of researching the IRC, sponsoring legislation and
having major accounting and legal firms review its findings, Export
Assist has created the U.S. Virgin Islands Export Corporation (VIEXCO)
which offers exporters the following tax and treasury benefits:
- Use of trapped Section 956 funds in the U.S. without Subpart
- Use of foreign tax credit carryforwards
- Dividends taxed at the 15% rate for individual shareholders
- Unlimited deferral
- Low-cost working capital for export growth
- Lower effective tax rates
- Increased cash flow
- Virtually no taxation.
Plus, by performing its export
economic activities in the USVI, the exporter is able to stay within the jurisdiction
of the United States, including its Federal Court, banking laws and
mirrored tax code.
For a preliminary analysis of your VIEXCO
benefits, please complete our Exporter
Profile Form. Upon receipt,
we will prepare your confidential, FREE VIEXCO
Tax Benefit Report within 3-4 days. To proceed with the VIEXCO, a business plan will
be prepared by Export Assist that includes the organization plan,
analysis of the export-related economic activities to be transferred
to the VIEXCO, financial statements and projections, and implementation
process. Prior to incorporation, a Section 482 transfer pricing study
must be obtained from a third party provider.
For more information, please contact a Team Member at (340)774-7060 or TaxSupport@exportassist.com.
The U.S. Virgin Islands Export Corporation (VIEXCO) structure was
created under legislation sponsored by Export Assist and signed
into law by the U.S. Virgin Islands governor on December 29, 2001
(Virgin Islands Code, Title 13, Chapter 12). This legislation also
- an annual business license fee of $130
- a flat annual franchise tax fee of $300
- no corporate income tax
- no gross receipts tax
- no graduated franchise tax
thereby subjecting the corporation to virtually no taxation.
The VIEXCO is a controlled foreign corporation (CFC) under U.S. Virgin Islands
legislation that has a single class of stock with a minimum par value of $1,000.
It must only include qualified U.S. export property and pass the U.S. export
destination tests. It can be structured on a services or a buy/sell basis and
it can perform finance functions like a bank.
With a privately-held exporter, the VIEXCO can be owned
by either the shareholders of the corporation or by the shareholders’ IRA.
When the VIEXCO is owned directly by the shareholders, its income
qualifies as Subpart F and is subject to reduced taxation. When
distributed as dividends, currently taxed at the 15% rate, this
income is exempt from additional tax as Previously Taxed Income
(PTI). When the VIEXCO is owned by the shareholders’ IRA,
the dividends are not subject to tax when received by the IRA due
to its non-profit status. Export Assist has obtained an opinion
letter from a leading law firm that endorses IRA ownership of the
With a publicly-traded exporter, the VIEXCO is owned directly by
This VIEXCO consists of services and finance activities
performed outside of the United States on behalf of the U.S.
exporter. The VIEXCO earns revenue by contracting with the exporter
to receive a services fee for the performance of export
economic activities based on a Section 482 transfer pricing study. Income
could be used for financing export working capital, the purchase
of invoices for shipments made to overseas locations, and sales
to unrelated international buyers.
Based on a Section 482 transfer pricing study, the buy/sell VIEXCO buys export
property from a U.S. company, performs all export economic activities, then
onsells the export property to unrelated international buyers. The VIEXCO
can also generate revenue by financing export working capital, purchasing
invoices for international shipments made to overseas locations, and funding
short- and medium-term export transactions, such as sales to unrelated buyers
and capital equipment loans.