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U.S. Virgin Islands EDC Tax Benefit Estimator

Economic Development Commission  •  90% Tax Credit  •  Mirror Code System  •  PR vs. USVI Comparison
IRC §934 IRC §937 Treas. Reg. §1.937-1 USVI EDC Program VI Code §713
1

Eligibility Assessment

183+ days required for bona fide USVI residency. IRC §937; Treas. Reg. §1.937-1(b).
2

Income Profile

Under the USVI mirror code system, qualifying EDC beneficiaries receive a 90% tax credit against income tax on qualifying business income and distributions. Bona fide USVI residents file only with the USVI Bureau of Internal Revenue - not with the IRS - for USVI-source income. IRC §934(b).

Qualifying EDC business income. 90% credit reduces federal/USVI tax to ~2.1% effective rate.
Distributions to bona fide USVI resident owners receive 90% personal income tax credit. VI Code §713.
Income not covered by EDC benefits. Taxed at normal rates. File with USVI BIR (mirror code).
Mirror Code (IRC §934, §935): Unlike Puerto Rico, the USVI does not have its own tax code. It mirrors the U.S. Internal Revenue Code, substituting "Virgin Islands" for "United States." EDC benefits are delivered as a 90% tax credit against the mirrored federal tax. Bona fide USVI residents file only with the USVI Bureau of Internal Revenue (BIR) and owe no additional tax to the IRS on USVI-source income.
3

EDC Tax Savings Analysis

Tax Without EDC
$0
Federal + state
Tax With USVI EDC
$0
~2.1% effective rate on EDC income
Annual Savings
$0
Before compliance costs

Detailed Tax Comparison

Income Category Amount Without EDC With EDC (90% Credit) Savings
Total $0 $0 $0 $0

Additional Exemptions Under EDC / RTPark

Gross Receipts Tax
100%
Exemption from USVI gross receipts tax on qualifying business income. Source: USVIEDA; VI Code §713.
Business Property Tax
100%
Exemption from property taxes on property used in the EDC-benefited business. Source: USVIEDA Tax Benefits Overview (Sep. 2024).
Excise Tax + Customs
100% / 1%
100% excise tax exemption on business materials. Customs duty reduced to 1% on raw materials and components (standard rate: 6%). Source: USVIEDA.

EDC vs. RTPark - Which Program Track?

EDC Program
RTPark (Univ. of VI)
Tax Benefit
90% credit · ~2.1% effective corporate rate
90% credit · ~2.31% effective rate (same benefit)
Program Duration
20-year certificate/contract
15-year term · exit fees if leaving early
Application Process
Government-administered · longer timeline · public hearing required
University-managed · more user-friendly · faster · recommended for tech/fintech/biotech
Best For
Manufacturing, tourism, financial services, any designated service business · established industries
Technology, fintech, biotech, R&D, e-commerce, software development · growth-stage companies

Estimated Annual Compliance Costs

Minimum USVI Investment
$100,000
One-time minimum investment in USVI business operations (excluding inventory). Required for EDC qualification.
Annual Compliance Fee
~$1,000-5,000
Annual EDC filing and compliance fee (varies by program category and business volume). Plus attorney and CPA fees.
Employment Cost (10 Residents)
Significant
10 full-time USVI resident employees required. This is the major practical difference from PR Act 60, which has no employment requirement.
Net Benefit (Est.)
$0
Enter income above to calculate.
Source: IRC §934 (USVI income tax reduction); IRC §937 (bona fide USVI residency); Treas. Reg. §1.937-1; VI Code §713 (EDC tax credits); USVI Economic Development Authority; Chambers & Partners, "Investing In... 2026 - US Virgin Islands" (Jan. 2026).
4

Puerto Rico Act 60 vs. USVI EDC - Side by Side

Puerto Rico - Act 60
USVI - EDC Program
Tax Rate on Qualifying Investment Income
0% (pre-2027 app) or 4% (post-2026 app)
90% credit on business income; ~2.1% effective rate
Employee Requirement
None (individual investors chapter)
5 employees (Cat. IV services) or 10 employees (other categories)
Minimum Investment
None specified (real estate purchase required)
$100,000 minimum in business operations
Annual Compliance Cost
~$15,005 (fees + $10K charitable contribution)
~$1,000-5,000 (fees) + employment costs
Tax System
PR has its own tax code (not IRC mirror). File with PR Treasury.
IRC mirror code. File with USVI BIR only (not IRS). IRC §934-937.
Program Duration
Decree valid through 2035; extendable to 2055 (Act 38-2026)
20-year benefit certificate/contract
Application Deadline Urgency
YES - Dec 31, 2026 for 0% rate (Act 38-2026)
No current deadline urgency
Best For
HNW investors with large capital gains, dividend, or interest income. No business or employees required.
Service businesses, financial services, and companies with capacity to hire 5+ (Category IV) or 10+ (other categories) USVI residents.
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The EDC and Act 60 programs are not mutually exclusive. Consult a qualified CPA and attorney familiar with both jurisdictions before making any decisions.
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