BVI Offshore Company Formation
(British Virgin Islands Business Company - BC, aka IBC)
Overview of a British Virgin Islands Business Company (BVI IBC)
The British Virgin Islands (BVI) primary offshore company formation product is the offshore Business Company (BC), also known colloquially as an IBC. Since the adoption of the BVI’s offshore statute in 1984 they have incorporated more than 600,000 Business Companies (BC) and remain one of the most popular destinations for offshore company formation services. The British Virgin Islands BC's are fiercely competitive offshore formation vehicles due to the jurisdictions flexibility and modern financial regulations making the islands one of the most attractive options for registering an offshore company.
The reformulation of the BVI’s international offshore financial model led to the adoption of the International Business Companies Act in 2004 fusing together ‘offshore’ and ‘onshore’ financial activities, opening up local business opportunities to offshore International Business Companies (IBCs)—subsequently referred to as Business Companies (BCs)—reflecting the progressive nature of the jurisdiction and the continuing refinement of the offshore financial model.
The BVI’s are largely driven by the booming offshore financial sector thanks to its supportive government, strong regulatory system, modern and sophisticated offshore legal framework, and flexible business arrangements all of which has helped make the islands one of the more attractive jurisdictions to form an offshore company.
Advantages & Top Uses of a BVI IBC
- No taxes on income, capital gains, nor are there gift taxes, inheritance taxes, sales taxes, or value added taxes
- Leading international legal and accounting businesses have a strong presence in the BVI, which enjoys a strong international reputation in Funds and Investments, Corporate Business, Ship and Aircraft Registration, Captive Insurance and Trust and Estate Planning
- Regulations and legislation are modern and continually ensuring protection of financial markets
- BVI company law is regarded by international investors as being extremely sophisticated and has been copied by other offshore jurisdictions
- The BVIs have never been blacklisted by FATF or the OECD
- Information and details on Directors, Officers, and Shareholders are not filed with the BVI Register of Companies
- The only documents that are made publicly available are the company’s Memorandum and the Articles of Association but they do not contain details related to shareholders or directors
- The new BVI BC Act enables BCs to conduct business and own real estate in the BVIs
- Minimal compliance requirements
- No reporting requirements
- The sole Director can also be the sole shareholder
- Confidentiality is one of the key features of the BVI BC
- Offshore savings and investments
- Conducting business activities in BVI
- Trade and distribution
- Forex and stock trading
- Professional service company
- International trading
- Hold bank accounts
- Protection of Assets
Chart: Key Corporate Features of a BVI IBC
|British Virgin Islands BC||Corporate Details|
|Type of Entity||Business Company (BC)|
|Type of Law||British Common Law|
|Governed by||BVI Business Companies Act 2004|
|Registered Office in BVI||Yes|
|Shelf company availability||Yes|
|Our time to establish a new company||2-5 Business Days|
|Minimum government fees (excluding taxation)||US $350|
|Access to Double Taxation Treaties||Yes (limited agreements with Switzerland and Japan)|
|Share capital or equivalent|
|Minimum paid up||US $1|
|Usual authorized||US $50,000|
|Bearer shares allowed||Yes|
|No par value shares allowed||Yes|
|Publicly accessible records||No|
|Location of meetings||Anywhere|
|Corporate directorship allowed||Yes|
|Publicly accessible records||No|
|Corporate shareholder allowed||Yes|
|Location of meetings||Anywhere|
|Local or qualified||N/A|
|Requirements to prepare||Yes|
|Requirements to file accounts||No|
|Publicly accessible accounts||No|
|Recurring Government Costs|
|Minimum Annual Tax / License Fee||US $350|
|Annual Return Filing Fee||N/A|
|Requirement to file annual return||No|
|Migration of domicile permitted||Yes
Requirements for British Virgin Islands Incorporation
An individual or company who wishes to form a registered company in the BVI must go so through a registered and licenced agent.
There are minimal requirements to formally initiate the BVI company formation process:
- A notarized photocopy of a passport
- Notarized addresses details
- Proposed name of company
- Amount of share capital (if different than the standard share capital of US $50,000)
The next step is file the company’s memorandum and articles of association with the BVI Registrar, together with a document detailing that a registered agent is agreeing to consent to act in his/her capacity. The registered agent performs a due diligence and having satisfied all the requirements put forth by the Register, it will produce a certificate of incorporation.
NOTE: The registered agent is given the powers to incorporate the offshore company and sign the formation documents on behalf of the client without the need to travel personally to the jurisdiction.
Taxation of a British Virgin Islands Corporation
A BVI BC pays no corporate tax, including no taxes on capital gains, inheritance, sales, or any value added taxes. All dividends, compensations, rents and royalties are also exempted from BVI taxes.
Corporate Details of a BVI IBC
Anonymity, Confidentiality and Disclosure
Directors and Shareholder information are kept confidential and are not disclosed to the public. A Register of Directors and Shareholders do not need to be held by the Registers office in the BVI. Anonymity can be guaranteed through the use of nominee services—though director and shareholder details already remain confidential.
The memorandum of association must set out the maximum number of shares that the company is issuing or state that the company is authorised to issue an unlimited number of shares.
Required Share Capital
No required minimums or maximums for share capital. Normal authorised share capital is US $50,000, which is the maximum capital for the minimum duty and licence fee payable (US $350), for a share capital of is US $50,001, the licence fee is US $1100. Share capital also need not be disclosed.
Financial Statement Required
There are no requirements to file or submit a statement of accounts nor are there requirements to file an annual return, however a company is required to keep detailed accounting of all transaction which may be kept at the registered agents office, or the Directors have the discretion of maintaining records anywhere in the world of their choosing, though a written record of the physical address of the records must be kept with the registered office.
Only one Director is necessary, though a President, Secretary and Treasurer are mandatory for a BVI BC; however, a single person or entity may hold all positions. A Director need to not be a resident and may hold any nationality. Any legal entity including corporations or an individual may hold the position as Director. A nominee Directors service may also be used.
Not required; although a secretary is normally appointed so as to facilitate signing obligations.
Business Company Director or Shareholder meetings are not necessary
Principal Corporate Legislation
BVI Business Companies (BC) Act 2004 replaced the older BVI Companies Act of 1984; this newly formed statute is based on the New Zealand statute, replacing the legislation that was formerly modelled after the Delaware statues.
The new 2004 legislation, BVI BC, Act legally made 'offshore' and 'onshore' entities the same in a number of areas and enabled BC’s from conducting business within the BVI. Similarly, International Business Company (IBC) are now called Business Company (BC) which harmonizes the differences between international and local companies.
The Act also regulates the operation of various types of both local and international companies, including those limited by shares or by guarantee, unlimited liability companies, restricted purposes companies and also segregated portfolio companies.
Type of Law
English Common Law with local statutes
One. Shareholder may also be the Director.
BVI BC’s are subjected to restrictions in conducting business in mutual fund management, banking, insurance and trust management. There are no restrictions on doing business or buying any real estate in BVI.
The BVI have no exchange controls with no restrictions on the movement of funds into or out of the BVI, which may be freely converted into any currency.
Language of legislation and Corporate Documents
Registered Office required
Yes; an imprint of the company seal must be held at the registered office as well as a Register containing the names and details of Directors and Shareholders.
Shelf Companies available
Time required to form offshore company
2-5 Business days
Language of Name
English, however a company may use a second foreign character name, but must supply a notarized English translation.
Any name that is identical or similar to a name already in use or one that suggests patronage to the BVI government or the British royal family.
Names of Company requiring a special licence or permission
A BC must obtain a special licence if the name of the BC contains any word that includes bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, university, municipal or their foreign language equivalents
Permitted limited liability suffixes
“Limited", “Corporation", “Incorporated", “Societe Anonyme”, “Sociedad Anónima”, or their respective abbreviation “Ltd.”, “Inc.” or “S.A.”
Access to Double Tax Avoidances Treaties
There are two agreements in place for Switzerland and Japan, though these agreements allow only for the limited exchange of tax related information and are not applicable to offshore businesses.
BCs with an authorised share capital of up to US $50,000 are required to pay the sum of US $350 annually, whereas an BC with an authorised share capital greater than US $50,001 is required to pay the sum of US $1,000 per year.
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