BVI Update: Why USVI Charter Companies Are Keeping it Local

Ahhhh, the BVI.  To our business owning friends on our too close to home shores:  WE MISS YOU!  We miss swimming into Soggy with our wet Washingtons for a Painkiller, parading down the sandy shoreline for lunch at One Love, sliding into Sydney’s for freshly caught lobster, luxurious afternoons spent at Oil Nut and Scrubb Island, cornhole and honey rum shots at B-Line, welcome drinks at Corsairs and Foxy’s….We MISS you all so much!

Unfortunately, due to circumstances out of the control of the small businesses owned and operated in the USVI, most charter companies won’t be bringing guests into our sister islands any time soon.  And, below, in the apologetically lengthy article outlining the daunting process presented to foreign charter vessels, all of you will understand exactly why USVI charter boats are not immediately flocking to the shores of our favorite stops in the BVI upon their “re-opening” to tourism…

An BVI News article dated April 21, 2022 states, “As the neighbouring US Virgin Islands (USVI) continue to welcome charter yacht operators to its shores, the BVI government is being accused of making it challenging for charter yacht professionals to operate locally.”

I couldn’t have said it better myself.

The article goes on to quote Opposition Leader Marlon Penn (BVI) in reference to the USVI’s soaring blue water economy during the pandemic and the BVI’s, which failed in comparison.

“We are seeing where they (USVI) are putting policies in place to welcome our marine and charter industry practitioners into the US Virgin Islands while we create a public relations firestorm for the businesses that operate within our space and have continued to contribute economically to the development of persons within that space.”

It’s a tough subject to discuss, considering the vast amount of information and fiscal resources being asked of foreign charter boats in order to enter the BVI with paying customers.  And, I kind of get it.  However close and similar they may seem, the BVI is a foreign territory with their own sets of rules and regulations.  And, some of these policies and procedures, however unenforced and non-transparent, may or may not been in place before the pandemic began…  But, here I will attempt to outline the fiscally draining and time consuming process that is being presented to foreign based charter boats by the BVI in order to bring paying guests into our neighboring islands.  This, as an effort to help all of you to better understand why most St. John based charter operators are not currently operating in the BVI.  And, as a hopefully helpful guideline for those who wish to pursue the licensing and permits to do so.

Several St. John charter operators that I have spoken with directly have reported losses to the tune of 40 per cent in comparison to last year (yes, during the pandemic).  Many cite cancellations and rescheduling from regular guests simply because they cannot go to the BVI.

Additionally, small business owners in the BVI are also feeling the pinch in regards to their daytime numbers without the influx of USVI day charter business.  You see, the captains, the crews and most USVI residents who venture over to the BVI don’t just stop at Soggy Dollar Bar and Foxy’s.  They are more apt to venture off the beaten path to smaller local establishments to avoid the crowds and support the “little guys.”  A restaurant worker at one such establishment reported that their dinner crowds were fine, possibly from overnight term charters out of the BVI, but their lunch numbers?  They are down a whopping 70 per cent on average!

Now, there are ways to get through the red tape and jump these hurdles into the BVI.  But in reviewing the process and conversating with MANY charter operators about it, I was still treading in murky water.  So, a few weeks ago we went out to Maho to meet with Megan Kenobbie and Jim Lee, owners and operators of Soulshine Charters, in order to get a better grasp on what the SEVEN pages of guidelines for chartering in the BVI (Scan QR Code at the bottom for full brochure) actually meant within the context of execution.  You see, Soulshine is one of the very few USVI charter operations to have obtained this “golden ticket.”  And these two had to go through the entire process…Not once, but twice.

Jim and Megan, like many charter boat owners based on St. John, not only operate their vessel…They also own it.  This means that every little cost associated with fuel, maintenance, insurance, haul outs, marketing…it ALL falls on them.  There is no off island investor or company owner cutting a check when things go wrong.  In addition, they are conducting the day to day operations and guest services of a half-board term charter AND keeping their business legit in the USVI (which ain’t easy either!).  This is the business model of the majority of St. John based commercial boats…Run it, fix it, register it, market it, PAY for it.

And, to all of you who own a boat of any type out there, you get this.  What is it…Bust Out Another Thousand?  It’s expensive and things always seem to go wrong at the most inconvenient times.  So to all of you out there who think we are living our dreams on our boats down here.  Well, we kind of are.  But most of us are barely keeping our finances above the “water line” in the process…And the rising costs of local day to day operations surely doesn’t help.

So, when a neighboring foreign territory is asking for close to, at the end of the day, $10k (some of that annually) between application fees, time spent, safety inspections, work permits for every crew member, medical examinations, certificates of operation, etc. all in several triple printed in colored ink, bound by a paperclip (not staples) little packages, hand delivered to several different offices in Road Town.  Well, you can likely assume why, in the middle of our busy season, most charter operators cannot currently swallow this pill.

Jim and Megan were, well, let’s call it “lucky” enough to be in Tortola in October of 2021 when the announcements of a change in policies for foreign based charter companies to operate in the BVI hit the boat yards.  They had hauled out in Nanny Cay for hurricane season and initially the process seemed simple and easy enough.  Especially since they were already there with no charters on the books in the immediate lingering off season.  November 1, they set out to get the following done:

1. Virgin Islands Shipping Registry (VISR) Letter of Recognition via Safety Inspection for Blue/Yellow Code
2. Charter Authorization
3. Commercial/Recreational Vessel License

I’ll get into the other steps in more detail below, but first I want to briefly explain to you the VISR Letter of Recognition.  This letter is granted to the boat owner once they pass the safety inspection for Blue Code for sailing vessels or Yellow Code for power boats.  Now, in the US/USVI, commercial boaters operate in accordance with the rules, regulations and safety protocols of the United States Coast Guard (USCG).  The Blue/Yellow Code is the BVI safety requirements for boaters.  Some, who previously operated in the BVI, MAY already have this safety inspection completed.  Those who do not will have to go through the process that requires hauling their vessel out of the water for some of the inspection and, in many cases, will be looking at the purchase of new equipment to pass the inspection.

Ok, so, this wasn’t a big deal for the Soulshine Charters team.  They were already in Road Town and, aside from all of their time spent running around between the Customs to Immigration to the boat yard to the Shipping Registry, it wasn’t a huge financial burden to bear.  One week in Road Town and under $1000 all in to operate their charter vessel in the BVI?  No problem.  Well, not much of a problem…

A few things, as this article is as much written for all of your understanding as it is for USVI charter operators to understand the process:  You cannot email most of these items and, for most of the process, the owner of the vessel(s) HAS to be present.  The documents required (see below) need to be sometimes duplicated, sometimes triplicated and always bound using a paperclip.  And, just like a visit to any government office on St. John or St. Thomas, a collared shirt and and slacks for guys, shoulders and chests covered for the ladies and closed toed shoes will get you a lot farther than our general dressed down island attire.

Ok, now, let’s fast forward to this Spring.  Jim and Megan have been LEGALLY operating their half board term charters (overnight charters with one meal a day instead of all-inclusive) on Soulshine in the BVI for nearly four months at this point.

“On March 2, everything changed,” Megan told me.

They received a notice from their overly helpful through this process contact with customs.  There was more paperwork and registering to be done.  Problem was, Soulshine was booked solid for four weeks beginning on March 4 with continued business spanning into the summer months.  There was no time to get to these processes finished in order to complete their work for the next month.  To avoid cancelling their rapidly approaching charters, Jim rushed over to meet with authorities at customs…And this time, immigrations, workforce and labor and VISR were joining the party as well.

He gratefully received permissions to run their charters by checking in via WhatsApp BEFORE actually arriving at the dock to check in with guests.  The two were given a deadline of April 6 to get everything else “in process.”  If you are an owner or captain (or just curious 🙂 ), you may want to continue reading to see the guidance….The following is what is NOW required of Foreign Charter Vessels if they want to operate commercially in the British Virgin Islands:

• Trade License for Individual/Company – This application must be used and be accompanied by the following documents
  • One Passport size photograph (owner of vessel)
  • Boat Registration Certificate (From USVI or country of origin)
  • Commercial Operating Insurance
  • Photo Or Brochure/Description of boat
  • Charter Operational Plan
    • Intended charter operation (day, trip, term charter) include a map of iteniary.
    • Is it for a season or a short period? (Season runs 11/1-10/31)
    • VISR Letter of Recognition
    • USVI or country of origin Vessel registration
    • Vessel Insurance
    • Copy of Captain’s License(s)
    • Valid STCW Basic for ALL crew members- Yes, that is Captains too.
    • Passport bio page for all crew (signature and photo pages)
  • Safety Certificate (VISR Letter of Recognition from above)
  • For persons not having Belongers (BVI resident) status, two character references, a statement of financial ability and police record must be submitted.
  • The Trade License must be redone, not renewed, every three months and two weeks prior to expiration at $200 per issuance. ($800 annually if operating year round)

• Commercial Recreational Vessel License (CRVL) – This application must be submitted with the following supporting documents.
  • Charter Operational Plan (see above)
  • Agreement between the boat owner and operator/charter company
  • Trade License
  • Charter Authorization Letter
  • Must be RENEWED each year-  The expiration date is October 31 of each year for EVERYONE.  Regardless of when it is obtained.  This is another strong point for charter companies who are waiting until the off season to possibly deal with this process.  For Soulshine, the cost of this is $605 annually but it is dependent upon the size and activity of the vessel and can range from $205-$805.  These would need to be obtained for all vessels that a company intends to operate in the BVI.

Ok, tired and financially exhausted yet?  Well, hold my beer as we talk about WORK PERMITS….

Once the above documents for the Trade License and CRVL are gathered, triple printed in color ink, paper clipped together and hand delivered by the owner of the boat to Her Majesty’s Customs Headquarters in the Richard Stoutt Building in Road Town, Tortola, and then approved and issued…The now legal in the BVI company can begin the process for work permits for any of their Captains or Crew that will be operating their vessels.

THIS IS IMPORTANT:  Work Permits, like the Trade Licenses ALSO have to be reapplied for every 90 days.  You CAN set the date for your Trade License to take effect in order to time it up with your work permit cycle.  Based on my conversation with Jim and Megan, I would advise giving yourself three weeks to a month in order to give yourself time to get through your work permits and set a similar “renewal” timeline for the two processes.

Ok, so, why do charter crews who are working OUT of the USVI need work permits in order to bring guests from the USVI into the BVI?  That answer is beyond me.  Do the ferry boat captains, flight crews and water taxi drivers all need a work permit to bring passengers in?  Probably not.  But, this is the case and here we go into the process….

According to Megan, this is where they really got them.  It’s the most lengthy of the applications and requires police background checks, medical examinations AND the cost (annually) is more than any of the other application fees combined.  And, they want to know what your income is.  Will there be taxes to pay to both the USVI and the BVI at the end of the day?  We aren’t really quite sure.  But what I am sure of is that this is quite invasive.  Especially when the USVI doesn’t require anything but a passport (and COVID things) for outside entities….

• Work Permit- Use this five page application for the work permit and attach the following documents:
  • One Passport sized photo
  • Cover letter made out to Commissioner Smith explaining the need for the employee
  • CRVL
  • Trade License
  • Charter Operational Plan
  • Signature page and bio page of Passport
  • Job Description
  • VISR Letter of Recognition for STCW and Captain’s Licenses
  • To be submitted to Department of Labour and Workforce in the Ashley Ritter Building in Road Town with a $50 application fee and additional expediting fee (where applicable).
  • Processing time:  14 working days without expedite fee or seven working days with the added $150 per application

Oh, but wait, that’s not all.  Don’t take those over to Labor and Workforce just quite yet.   You’ll also need to do similar things at Immigration.  But there are few steps you will need to take before that…

• Police Certificate/Background Check-  This one you CAN do locally at the St. John Police Department in Cruz Bay or on St. Thomas.
• Medical Exam- BVI Medical Examination Form filled out by a certified entity– The examination is comprehensive and requires x-rays, urinalysis and blood work among other things.

Once these items are completed, the following items will need to be taken to the Immigration Department Headquarters in the Edifice Building in Road Town on the same day as the Work Permit Applications are dropped off “to avoid delay and back and forth processing between both agencies.”

• Results of Background Check
• Completed Medical Examination Form
• Copy of applicant’s bio page of passport
• Copy of Charter Operational Plan

Ok.  Now you’re all in…How much time and money did that run you?

Well, I think it’s a little difficult to put a dollar amount on the time spent not doing ALL of the other necessary day to day activities that are required of a boat and business owner.  Additionally, a set amount on transportation/fuel costs (YES, you are still paying customs fees even with all of this), office supplies and printer ink or color copies, perhaps some new threads that will be up to the task of dealing with government offices in professional settings, etc. is difficult to determine.  But, Megan and Jim agreed that $5k is a pretty agreed upon number when it comes to time and money spent on just the PROCESS.

The breakdown of annual application and processing fees are as follows…

• Trade License- $200 every three months
• CRVL- $205-$805
• Work Permit – $367.50 plus $50 application fee per crew member every three months

I’m going to use Soulshine’s direct costs as a model here.  There were two crew members on a 45 foot term charter catamaran that went into their costs of $4,745 just in application and processing fees to the multiple agencies in the BVI Government.  This does not include their safety inspection (another $180 not including haul out costs) or the above quoted “time and money” spent.  All in?

$9,925

Now, let me also remind all of you out there that while $10k might not be a huge amount of money for a charter company owner with an unlimited budget and other businesses and or investors to lean on for these unexpected financial woes.  For a company like Soulshine, for MOST of the St. John based charter boat operations, it is an astronomical amount of money.  It is basically giving away a month of work in order to run trips that they will have to charge double for.  It is weighing the option between explaining to repeat guests the answer to one of two questions:

1.  Why can’t we go to the BVI?

2.  Why did your trip costs go up so much?

Because that, my friends, is the bottom line.  The bottom line.  These trips will no longer be affordable with the companies who do the work, put the money in and cross the line.  Because the “Golden Ticket….”well, it’s not cheap or easy.  Based on bar stool conversations and quick exchanges on the boater’s beach, I would imagine that some of our STJ companies will be attempting to accomplish all of this during the off season this year.  But, I also imagine that many will shake their heads at the cost and the difficulties as I have while I write this article and during the dozens of conversations leading up to it.  Additionally, the process has changed once already since November.  With the current shifts in the BVI Government that I wrote about yesterday, all of this could change again soon.  And, I can imagine, with this type of financial burden on the line, many companies will wait to see what happens next.

When we met with Pete, Jim and Megan this week to follow up on revisions and clarifying information, something was said that keeps ringing through my head….”How are we to be confident in doing business here?”

As I roll that statement around in my head, I think about how difficult it is to legally operate here in the USVI.  On our home turf.  Where we have our resources at home and offices a quick ferry ride away to get things done.  To add to that burden, basically licensing your business in a foreign country WITH reapplying for aspects of it every three months?  And, now, with the BVI Government in a shift, who knows what these processes will look like in a few months’ time and what else will need to be done, or, in Soulshine’s case, re-done in order to effectively carry out obligations to their guests.  I’m not quite certain how an owner also in an operator situation can run a business under these terms…

We can only hope that some things will be made easier in the future.  Patience, I believe, is going to be key.  Keeping our local boats running above that “water line” is also imperative.  So, please, wait alongside the small businesses of St. John, support the companies you have adventured with for all of these years, stay local and explore the USVI on your next visit.  There is so much beauty here that you have yet to discover!  And, when things (hopefully) get a little easier, we ALL look forward to adventuring in the BVI with you!