The BVI Business Company: Key Things Offshore Seekers Should Know

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.

What is a BVI Business Company?

A BVI Business Company (BC) is a type of offshore company registered in the British Virgin Islands (BVI).

Previously, this entity was referred to as an International Business Company (IBC). The name change occurred in 2004 when the BVI Business Companies Act replaced the International Business Companies Act.

This change in terminology reflected the evolving landscape of business entities in the jurisdiction. So, when people mention a BC today, they are essentially discussing what was previously known as an International Business Company (IBC).

Updates on BVI Business Companies (Amendment) Act

The BVI Business Companies (Amendment) Act, 2022 aims to address issues in company dissolution, bearer shares, and record-keeping measures.

With additional legislation for company strike-off regimes, businesses must stay in good standing for future compliance. A review and update of Schedule 1 is carried out in order to enhance the registration fees regime as necessary. See the Amendment Order.

What are common types of BVI BCs?

The primary types of business companies in BVI include:

BVI Business Company Limited by Shares 

• This is the most common type of BVI BC
• Shareholders’ liability is limited to the amount unpaid on their shares
• Suitable for various business activities, including trading and investment

BVI Business Company Limited by Guarantee

• Shareholders’ liability is limited to the amount they agree to contribute in the event of the company’s winding up
• They can be authorized or not authorized to issue shares

BVI Business Company Unlimited

• These BCs can either have authorization to issue shares or not, depending on their structure and needs.
• There is no limit on shareholders’ liability, which means they are personally responsible for the company’s debts and obligations without a specified cap.

What activities can BVI BC engage in?

BVI BCs can engage in a wide range of activities, making them versatile for various business purposes. The activities that a BVI BC can typically engage in include, but are not limited to:

• International trading: Import, export, and trade goods and services internationally.
• Investment holding: Hold and manage investments in various assets, such as stocks, bonds, real estate, and other financial instruments.
• Asset protection: Safeguard assets from potential legal or financial liabilities.
• Intellectual Property holding: Hold and manage intellectual property rights, such as patents, trademarks, and copyrights.
• Banking and financial services: Engage in certain financial activities, subject to regulatory approvals.
• Investment funds: Vehicles for investment funds, including hedge funds, mutual funds, and private equity funds.
• General business operations: Conduct various general business activities, subject to compliance with local laws and regulations.

It’s important to note that while BVI BCs are versatile, they must adhere to the specific regulations and laws of the jurisdictions in which they operate. Additionally, certain activities may require licenses or approvals from regulatory authorities.

Benefits of setting up BCs in BVI

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 that 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.

Key features of BVI Business Companies

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; and
• No requirement for filing annual returns or public disclosure of directors, shareholders, charges, loans, or agreements.

Are BVI BCs subject to Economic Substance rule?

If a registered BVI business company carries on ‘relevant activities’ under the context of the BVI Economic Substance, it must comply with the reporting requirements concerning that relevant activity.

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 by 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.

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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.

Why us

• Competitive price – the all-inclusive US$1299 basic package
• No hidden fee
• Only 3 working days for your BVI company incorporation

Just 4 steps with BBCIncorp

• Select your desired package for BVI offshore company formation
• Make payment: online via Credit card, Debit Card, Paypal, or bank wire transfer
• Collect and verify KYC documents
• Proceed the incorporation

Should you need more information, feel free to send us an email via service@bbcincorp.com or click the chat to get connected with our experts!