The U.S. Virgin Islands’ charter yacht industry, valued at about $92 million and supporting more than 800 jobs, is facing turbulence as vessels relocate to the neighboring British Virgin Islands.

Several operators have begun re-registering their fleets in the BVI, where local registration now carries far lower fees than those imposed on foreign-based vessels entering its waters.

The move follows a sharp fee increase by the BVI government, which raised annual access charges for outside boats to as high as $24,000, while BVI-based vessels pay as little as $800 to $4,000 depending on size.

Although the new fee structure was intended to generate revenue and regulate traffic, it has had the unintended effect of drawing business away from the USVI.

Charter companies that primarily serve itineraries around Virgin Gorda, Tortola, and Jost Van Dyke now find it more practical to operate as BVI entities. The relocation allows them to avoid the punitive foreign access rates and simplifies logistics for clients who prefer starting and ending their trips within BVI waters.

USVI officials and industry groups see the trend as a growing concern. The Virgin Islands Professional Charter Association has urged local authorities to consider reciprocal measures and invest more in maritime workforce training, licensing, and infrastructure to retain competitive advantage.

Meanwhile, BVI officials maintain that their new rules bring order to a rapidly expanding sector and ensure fair contribution to public revenue.

The shifting registry of charter yachts highlights how regulatory asymmetries between neighboring island economies can quickly reshape regional industries.

Unless both sides coordinate on fees and access, the Virgin Islands could see an erosion of jobs and investment from one jurisdiction to the other, even as tourists continue to sail the same shared waters.

Source: Virgin Islands Consortium.