The BVI Business Company: Key Things Offshore Seekers Should Know

This article will delve into the key features and benefits of a BVI Business Company (BC), the most popular entity type for those looking for an offshore venture in the British Virgin Islands (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, consolidating all company types under a single regulatory framework.

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.

To further strengthen regulatory oversight, the BVI Business Companies Act 2024 (Amendment Act), published on September 26, 2024, introduced amendments aimed at preventing the misuse of financial services for money laundering. These encompass new requirements regarding beneficial ownership, register of members, rectifying the register of directors, director duties, and so on.

What are common types of BVI BCs?

The primary types of business companies in BVI include:

BVI Business Company Limited by Shares

• 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, investment, and asset holding.

BVI Business Company Limited by Guarantee

• Members’ liability is limited to the amount they agree to contribute if the company is wound up.
• Can be with or without shares, depending on the company’s structure.
• Often used for non-profit organizations, clubs, and charities.

BVI Business Company Unlimited

• Can be with or without shares, based on the company’s needs.
• No limit on shareholders’ liability, meaning they are personally responsible for the company’s debts and obligations.
• Less commonly used due to the high level of personal financial risk.

What activities can BVI BC engage in?

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

• International trading: Import, export, and trade goods and services internationally.
• Investment holding: Hold and manage investments in stocks, bonds, real estate, and other financial instruments.
• Asset protection: Safeguard assets from legal or financial liabilities.
• Intellectual property (IP) holding: Own and manage patents, trademarks, copyrights, and other IP rights.
• Investment funds: Act as vehicles for investment funds, including hedge funds, mutual funds, and private equity funds, subject to proper structuring and compliance.
• General business operations: Conduct various business activities, provided they comply with relevant regulations.

While BVI BCs offer flexibility, certain activities require licensing or regulatory approvals, including:

• Banking, insurance, and trust services: BVI BCs cannot engage in these activities unless properly licensed under BVI law.
• Financial services: Activities such as securities trading, forex, and investment advisory require approval from the BVI Financial Services Commission (FSC).

BVI BCs must strictly comply with the laws of any jurisdiction where they operate. Additionally, companies engaging in relevant activities under the BVI Economic Substance Act must meet reporting and substance requirements.

Benefits of setting up BCs in BVI

The British Virgin Islands is regarded as one of the most appealing destinations for setting up companies worldwide. 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 popular tax-free jurisdictions

The BVI is a British Overseas Territory with a politically and economically stable environment. It currently has over 350,000 BCs on the Register (2023) thanks to its friendly business environment, encompassing around 60 islands in the Caribbean Sea.

Attractive legal framework

The BVI also boasts an attractive legal framework based on the English common law system, known for its reliability and predictability in legal matters. The jurisdiction has a well-established regulatory framework that aligns with international standards, providing businesses with clear and transparent rules for operation.

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. It has earned a reputation as a leading hub for international corporate services, asset protection, and investment funds. Additionally, the jurisdiction is home to numerous global law firms, accounting firms, and financial institutions.

Excellent location

The jurisdiction enjoys excellent connectivity by air and sea, making it easy for businesses to communicate and operate globally. Additionally, the US dollar (USD) is the official currency, providing currency stability and eliminating the risks associated with exchange rate fluctuations.

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, but only if they do not conduct business within the BVI. All dividends, compensations, rents, and royalties are also exempted from BVI taxes. However, this does not exempt them from taxation in jurisdictions where beneficiaries reside.

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 same power as a natural person.

Minimal corporate requirement

Those who register a BVI Business Company are not burdened with overloaded duties to file compliance or corporate requirements, at the same time can save time and money that can arise 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.

While there is no requirement to file financial statements, BVI BCs must maintain financial records that explain their transactions. These records do not need to be filed but must be accessible if requested.

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. There are no nationality restrictions for these roles.
• 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.
• Registered address and agent are mandatory, but substance requirements may apply depending on business activity.
• Electronic meetings are allowed, but decision-making and record-keeping still need to comply with laws governing the company.

High level of confidentiality

This is one of the key advantages of the BVI business company. 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. These details 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.

Please keep in mind that even though the director’s information is submitted to the Registrar, it is not publicly available. In addition, beneficial owner information is kept confidential but can be shared with authorities under legal requests.

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Why incorporate a BVI BC with BBCIncorp

With a speedy and simple process, BBCIncorp 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
• Various options: from our all-inclusive basic package to the premium offerings
• No hidden fee, and every amount required is transparent
• 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 with the incorporation with BBCIncorp team

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