Referred to as a “tax haven” jurisdiction plus fast registration and a high level of confidentiality, the British Virgin Islands (BVI) is one of the most preferred destinations for offshore seekers. About 40% of the world’s offshore companies have chosen this place to conduct their business, mentioned by The Legal 500 and ICIJ.
This article below will delve into the key features and benefits of BVI Business Companies (BC), which are the most popular entity type for those looking for an offshore venture in BVI.
1. BVI BCs: What you should know
The offshore Business Company (BC), also known as an IBC, is the most prevalent company formation type in the British Virgin Islands. A BVI company must comply with the BVI Business Company Act, 2004 – which is the key and the most crucial piece of legislation regulating the registration, status, and operation of the Business Companies in the British Virgin Islands.
The replacement of the International Business Companies Act, 1984 by Business Company Act in 2005 marked a highlight by removing ring-fencing provisions between offshore company and local company. Having been amended several times, the latest BVI Business Company Act (Amendment) version was made in 2019.
When it comes to the use of the BVI business company, BVI BCs can be incorporated in different legal forms:
Company limited by shares
Company limited by guarantee that is authorized or not authorized to issue shares
Unlimited company that is authorized or not authorized to issue shares
Furthermore, BVI BCs are allowed to engage in any legitimate business activities, ranging from bank and fiduciary service, insurance to investment funds, providing that the company attained relevant licenses and permits. They can also open accounts at local banks and enjoy a wide range of merits thanks to BVI’s booming offshore financial sector.
2. Benefits of BVI BCs
The British Virgin Islands is regarded as one of the most appealing destinations for setting up companies in the world. Its open economy coupled with a favorable tax law within a strong regulatory framework has been the facilitator of a large number of non-resident investors flocking into the territory.
Below are the main reasons why you should set up the BVI company over many other jurisdictions:
One of the most common tax-free jurisdictions. The BVI has over 400,000 BCs on the Register as of Sep 2019 – with a friendly business environment, inclusive of around 60 islands in the Caribbean Sea, and is a British Overseas Territory which offers a politically and economically stable environment.
Attractive legal framework. The country has an attractive legislative framework that represents its independent judicial system based on English common law.
Prominent economic sectors. Prominent among key economic sectors such as tourism or international corporate services, a booming offshore financial sector has been witnessed in the BVI. By virtue of its supportive government, the advanced offshore legal system, and the strong existence of leading international accounting businesses, The BVI is relatively a good choice for those seeking offshore business and opening offshore bank accounts.
Excellent location. The BVI’s good location is another reason. It allows its companies favorable conditions to easily access modern telecommunications by sea and air. Furthermore, this place has US dollar as the official currency, thus you can feel secure that there are no currency exchange control and no limits on cash flow movements in this jurisdiction.
Tax benefits:Registered as a BVI BC, your company would be exempt from the BVI corporate tax, capital gains, gift taxes, inheritance taxes, sales taxes, and value-added taxes, as long as your company conducts business outside the BVI. All dividends, compensations, rents, and royalties are also exempted from BVI taxes.
In addition, the stamp duty levied on all transactions relating to transfers of any type of property of assets, shares, debt obligations or securities to or by a BVI BC is also tax-free, other than land-ownership transactions in the British Virgin Islands.
Legal personality: Business Company is a legal entity registered in the BVI. It is deemed a separate legal person with the powers being the same as that of a natural person.
Minimal corporate requirement: Those who register a BVI Business Company is not burdened with overloaded duties to file compliance or corporate requirements, at the same time can save time and money that can be arisen from these requirements:
No auditing requirement.
No requirement for filing financial accounts. Accounting records do not have to be kept in the BVI.
No requirement for appointment of the BVI-resident director.
No need to hold a regular Annual General Meeting.
No requirement for filing annual returns or public disclosure of directors, shareholders, charges, loans, or agreements.
Flexible corporate structure: The BVI company does offer a high level of flexibility in its corporate structure. Below are some of the typical features of this type:
Only one owner, one shareholder, and one director (all of whom may be the same person).
Directors or shareholders of a BVI BC do not need to be BVI residents, they can be of any nationality.
Meetings of the Board of Directors may be held anywhere within or outside the BVI as deemed necessary by directors and by telephone, teleconference, or other electronic means.
A registered address and registered agent on the territory of the BVI are required for BC incorporation.
Various choices regarding company designation are available such as the word “Limited”, “Corporation”, “Incorporated”, “Societe Anonyme” or “Sociedad Anonima” or the abbreviation “Ltd.”, “Corp.” “Inc.” or “S.A.” or “A.S.” etc. Note that the BVI BC may use and may be legally designated by either the full or the abbreviated form.
High level of confidentiality: This is one of the key features of the BVI’s BC. A Business Company in the BVI is required to include detailed information about each beneficial owner, shareholder, and director.
However, the information of beneficial owners and shareholders would be kept confidential at the Registered Agent, while that of a director is submitted to the Registrar. You can feel safe since it will not be subject to disclosure unless required to do so on an order of the Court, by relevant competitive authorities, or under a mutual legal assistant request.
4. How to incorporate a BVI BC?
With a speedy and simple process, BBCIncorp Limited will help you easily have a BC registered in the BVI. We offer you an all-in-one service package that will include everything for you – a foreigner to set up a new Business Company from the beginning.
Competitive price – only US$1099 for the basic package
No hidden fee
Only 3 working days for your BVI company incorporation