The British Virgin Islands (“BVI”) is a British overseas territory situated to the east of Puerto Rico between the Caribbean Sea and the North Atlantic Ocean. The country consists of the main islands of Tortola, Virgin Gorda, Anegada, and Jost Van Dyke and over fifty other smaller islands and cays clustered around the aquamarine waters of the Sir Francis Drake Channel.
Interestingly the country’s official name is simply the “Virgin Islands.” The prefix “British” is a fairly recent addition often used to distinguish it from the neighbouring American territory which changed its name from the “Danish West Indies” to “Virgin Islands of the United States” in 1917.
WHY INCORPORATE IN THE BVI
The British Virgin Islands has often been described as the world’s leading offshore incorporation centre. It has been estimated that, since 1984, over one million BVI companies have been incorporated, placing its status as a leading offshore jurisdiction beyond dispute. There are several factors which contribute to the BVI’s attractiveness as an incorporation centre. As a country the BVI boasts a modern and progressive regulatory regime, economic prosperity, and history of political stability. As a result a BVI company is easily formed, has a flexible organizational structure, enjoys a large measure of privacy and is exempt from taxation and excessive financial reporting. There are several other factors which encourage the formation of BVI companies which we discuss below:
[1] Efficient Incorporation
Incorporation of a BVI company is easily and quickly accomplished; ordinarily, incorporation is completed within 3-5 business days. Additionally, incorporation in the BVI is extremely cost effective when compared with other offshore jurisdictions.
[2] Various types of Incorporations
In addition to ease and cost effectiveness, incorporation in the BVI allows maximum flexibility in relation to the type of company that may be formed. A BVI company may be a company limited by shares or by guarantee (with or without authorization to issue shares), an unlimited company (with or without authorization to issue shares), a segregated portfolio company or a restricted purpose company.
[3] Flexibility
A BVI company is an extremely flexible legal person which can carry on a wide variety of activities.
No restriction on activity: BVI companies are empowered by statute to engage in any lawful or legal business activity outside the BVI. Accordingly, BVI companies are extremely attractive as they may be put to a wide variety of uses.
Company Structure: a BVI company may have a single shareholder or a single director either of which may be a corporate body and the same individual/corporate body may serve as both sole director and sole shareholder. There is no requirement that either the director or shareholder be a resident of the territory. Aside from the director, there is no requirement to appoint other company officers as such no company secretary is required by law.
Meetings and Resolutions: There is no requirement for shareholder or director meetings and if meetings are to be held the law permits them to be held anywhere in the world by telephone and any other electronic means. Resolutions whether of shareholders or directors may be consented to in writing and both may vote by proxy.
Financial Records: a BVI business company is not required to file annual returns, financial statements, accounts or records. If the company choses to keep such records they can be held anywhere in the world.
Transfer of Domicile: companies incorporated under the laws of another jurisdiction may be converted to BVI Business Companies, if the laws of that jurisdiction permit it to be done. The reverse is also true, in that, a BVI company may also change its domicile from the BVI to that of another jurisdiction.
[4] Privacy
BVI companies are afforded the utmost privacy and confidentiality.
There is no public record of the identity of shareholders or directors. However, a copy of the register of members and register of directors must be kept at the office of the company’s registered agent. This ensures complete confidentiality. The only documents held on public record are the Memorandum of Association and the Articles of Association.
Minutes and resolutions of the company are also kept confidential at the Registered Agent’s office.
Nominee services for shareholders and directors may be employed to ensure confidentiality of beneficiaries.
[5] Asset Protection
The ability of BVI companies to transfer domicile ensures maximum asset protection. Directors of a BVI company may protect its assets by transferring them a trust, foundation, association, partnership or even another company; and merge or consolidate with any other company or foreign corporation in another accommodating jurisdiction.
[6] Taxation
BVI Business Companies are exempt from income tax, the same exceptions applies to all dividends, rents, royalties, compensations, and other amounts paid by the company , and all capital gains realized in respect to any shares, debt obligations or other securities of the company. No estate, inheritance, succession or gift tax is payable with respect to any shares, debt obligations or other securities. All transactions and instruments relating to transfers of any type are exempt from tax duty except for land-ownership transactions in the British Virgin Islands, in which case stamp duty remains payable.
[7] Shares or Capital
No authorized capital requirement.
No restrictions concerning the ownership of shares in a BVI company. A shareholder may be from any country and hold any number of shares in the Company. Corporate shareholders may also be used as well as Nominee Shareholders.
Shares may be easily transferred from one shareholder to another or from one person to another person or corporate body if required.
A BVI Business Company may issue bearer shares. However, these shares must be deposited with a licensed custodian together with a written statement of the identity and address of the actual owner of the shares.
Shares can be issued for consideration other than cash, with or without par value and be denominated in any currency.
[8] Financial Benefits
Bank accounts may be opened anywhere in the world.
US dollar is the official currency of the BVI and there are no currency controls by local government.
The annual licence fee for a BVI Business company is fixed and is not dependent on the financial activity of the company. Where the company is authorized to issue less than 50,000 shares the annual licence fee is $350.00; and where the company is authorized to issue more than 50,000 shares the annual fee is $1,100.00.
BVI companies enjoy freedom of capital movement. Capital funds may be moved in and out of the BVI without restriction.
Maximum security of assets including the ability to transfer domicile.
For further information, please contact Willa Tavernier ([email protected]). |