Quick answer — USVI EDC program at a glance. The US Virgin Islands Economic Development Commission (EDC) grants approved businesses up to a 90% reduction in income tax on qualifying USVI-source income, plus 100% exemptions from gross receipts, excise and property taxes. Beneficiaries commit to a minimum investment, local full-time hiring and local charitable contributions. For US citizens, the personal benefits generally require becoming a bona fide resident of the USVI.
For US citizens, moving abroad rarely ends US taxation, because the United States taxes its citizens wherever they live. The US Virgin Islands are one of the few legal exceptions. The territory runs its own tax system that mirrors the US Internal Revenue Code, and income taxes from bona fide residents go to the USVI Bureau of Internal Revenue rather than the IRS. Through the EDC program, approved businesses and their owners can reduce that tax by up to 90%.
It is not a paperwork exercise. The EDC program expects real local operations: investment, full-time local employees, purchases from local suppliers and contributions to local charities. Founders must also genuinely live in the territory and pass the bona fide residency tests. For the right business — a consultancy, fund manager, e-commerce or service company that can actually operate from St. Thomas, St. Croix or St. John — the savings can be substantial.
It does not work for founders who want to keep living on the US mainland or travel constantly without a real base in the USVI, or for very small solo businesses that cannot meet hiring requirements. It is not aimed at non-US founders, who have simpler options elsewhere.
Comparing US and offshore options? See our hub on US LLC vs offshore company.
Non-US founders usually look at a US LLC formation for founders instead. For another Caribbean option, compare Curaçao company incentives.
To benefit personally, you generally need to be a bona fide resident of the USVI under Internal Revenue Code section 937. That means passing a presence test (for example, at least 183 days in the territory in the tax year), having your tax home there, and not having a closer connection to the US or a foreign country. File Form 8898 for the year you become or stop being a bona fide resident.
The 90% reduction applies to qualifying income — broadly income from the approved business sourced in or effectively connected with the USVI. Income from work performed on the mainland, or passive income unrelated to the approved activity, is usually not covered. Keep detailed records of where services are performed.
Beneficiaries sign a certificate setting out their obligations, which typically include:
Failing to meet these can lead to loss of benefits or recapture.
USVI companies and banks apply US anti-money-laundering rules. Expect annual tax filings with the USVI Bureau of Internal Revenue, EDC compliance reports and audits.
The EDC program is built for real businesses, so the main costs are local operations rather than fees.
Amounts are indicative; confirm current requirements with the EDC.
The saving is meaningful for businesses with high qualifying profits. Below a certain size, the cost of local employees and compliance can outweigh the tax benefit.
The USVI uses the US dollar and US banking regulation. Several US banks operate branches in the territory, making banking simpler than in most offshore jurisdictions.
The USVI Setup Guide lists the EDC application steps, residency evidence and compliance calendar — get it when you check your eligibility with Heavnn.
It is the US Virgin Islands Economic Development Commission's incentive programme, granting approved businesses up to a 90% reduction in income tax and full exemptions from gross receipts, excise and property taxes, in exchange for local investment, hiring and contributions.
Yes, legally, if they become bona fide residents of the USVI and their income qualifies under the EDC programme. Income from work performed on the mainland or unrelated passive income generally does not qualify.
It is a status under section 937 of the Internal Revenue Code. You must meet a presence test, have your tax home in the USVI and not have a closer connection to the US or another country.
Bona fide USVI residents generally file and pay income tax to the USVI Bureau of Internal Revenue under the mirror code, rather than to the IRS, subject to specific filing requirements.
Non-US investors can apply, but the programme is most valuable for US citizens, who cannot escape US taxation by simply moving abroad.
The USVI is one of the few legal ways for Americans to cut income tax — if the business and the move are real. Heavnn checks both before you apply.
Check your eligibility with Heavnn →
This guide is general information, not tax or legal advice. Figures are indicative as of October 2026.
