The British Virgin Islands are a relatively small jurisdiction consisting of several dozen pieces of land in the Caribbean Sea, of which only 16 are inhabited by people. They are called British because the BVI is officially considered an overseas territory of the United Kingdom.
The advantages of a classic tax haven attracted many foreign entrepreneurs and investors to the jurisdiction. At one point, up to 40 per cent of the world’s offshore companies were registered in the BVI. Every dollar raised was spent by the islands’ government on economic development. The British Virgin Islands is a prosperous region with a well-developed transport and tourism infrastructure.
The BVI attract foreign business, first of all, by favourable working conditions. Let us list the most obvious advantages.
Corporate profits and capital gains are not taxed in the British Virgin Islands. There is also no VAT in this island jurisdiction. It is safe to say that a business registered in the BVI is not burdened with excessive fiscal burden and complex tax reporting.
But it would be wrong to assume that offshore firms do not pay a cent to the BVI treasury at all. As in other offshore zones, international enterprises registered on the islands pay a state duty every year. However, its size is unlikely to discourage even a novice businessman, let alone serious international corporations.
Since the procedure does not require the personal presence of the founder, a foreign entrepreneur can register a company in his home country.
Incorporation of an offshore company in the BVI takes no more than 1 working day. The participation of a registration agent in the process almost completely eliminates errors in the registration procedure.
The British Virgin Islands has no currency control at all. Since 1959, the US dollar has been used as a means of payment here.
The BVI has inherited the same rules of law as in the UK, which means that an officially registered company on the island is well protected by the law. If you encounter any disputes in the course of your work, you will always be able to defend your economic interests in an independent court.
There is no requirement in the BVI for at least one director in a new international firm to be a local resident.
The BVI does not prohibit the use of nominees, which, subject to a number of conditions, provides businesses with sufficient confidentiality.
Most offshore structures conduct their business outside the BVI. But if you are planning to open an office directly on the islands or even to sell something and provide services here, you will have at your disposal: well-developed transport infrastructure, spacious offices, modern means of communication and qualified personnel.
BVI corporate law provides foreign entrepreneurs with a choice of several convenient legal forms to register an offshore business. It can be:
A commercial company;
Partnership;
A trust or investment fund.
Below we look at the most common types of offshore organisations in the BVI.
Commercial, or as they are also called, business companies are often used to register an offshore business in the BVI. There are three types of commercial companies in this island jurisdiction:
Limited Liability;
With a liability limited warranty;
With unlimited liability.
The most popular type of company among foreign entrepreneurs, which is most often chosen to register an offshore business in the British Virgin Islands.
The founders of BC with limited liability have a separate legal personality from the company, which limits their liability for the company’s debts to the amount of their contribution (share) in the authorised capital.
A limited liability company may issue shares with or without par value. Under the laws in force in the jurisdiction, such a firm issues its shares almost as soon as the first director is appointed by a resolution of the founders. However, the countdown is usually from the moment your offshore firm is officially registered, and the deadline for issuing shares is only 30 days.
If the authorised capital of a company consists of a divided shareholding, in order to attract additional investment, such a company may issue shares of different classes and even shares of different series within the same class. This type of VS with limited liability is called a company with a divided share portfolio. A characteristic feature of such business structures is the legal separation of the assets and liabilities of each individual share portfolio, both from other such portfolios and from the main share portfolio of the company itself.
Another way to attract additional investment in BC is to issue non-issued bearer shares.
The number and type of shares issued by an offshore limited liability company are governed by its memorandum of association. Unless the memorandum provides for the issuance of bearer shares, a company cannot convert already issued registered shares into this format, or issue additional non-named shares, or exchange issued shares for another type of shares. Offshore business companies are liable to serious monetary penalties for such offences.
The size of the founding capital of a limited liability company can be anything. The standard amount of share capital for offshore structures in the BVI is $50,000 divided into shares of $1 each.
To register a BC with limited liability it is enough to have one founder, who at the same time will be the sole shareholder of the company. The beneficiary, shareholder or director of a business company in the British Virgin Islands can be either an organisation or an individual. It does not matter to the island authorities what their nationality or tax affiliation is.
Shareholders are not required by the BC to contribute to the share capital of a company an amount equal to the full nominal value of the shares they hold. In a commercial company whose authorised capital consists of registered shares, each shareholder has a financial obligation equal to the value of his share in that capital. If such a company goes bankrupt, the shareholders will only have to pay an amount equal to the stated value of their shares in the company.
Accordingly, if for any reason the founder sells his shareholding in an offshore firm, along with the shares, the debt obligation is transferred to the new owner.
All BC in the BVI maintains a register of shareholders. Shares are considered issued only when information about the shareholder and the number and type of shares held is entered in the register.
The register of shareholders of a commercial company is kept by the registration agent in the BVI. Access to this data is restricted in this way, but the agent is obliged to provide the register or information from the register at the first request of the regulatory authorities.
One director is sufficient for the functioning of the new BC in the BVI. If there is more than one director, a Board of Directors is assembled and a chairman is chosen to lead it. The BVI registration agent keeps a register of directors with the personal data of the management.
BVI corporate law sets out strict requirements for the nomination of a director, as well as time limits for the appointment of the first director. It will also be necessary to obtain the written consent of the nominee in order to appoint him or her as a director of his or her offshore company.
There are 2 types of business companies with limited liability guarantee:
With the right to issue shares to raise additional funds;
Without the right to issue shares.
The founders who provide the guarantee and the common shareholders of the firm are liable for its debts only to the extent of their financial obligation — the guarantee or the amount the shareholder agrees to pay for the shares he or she owns.
BCs with limited liability guarantees are often, but not always, used to register non-profit organisations.
In a business company of this type, at least one of the participants must have unlimited material liability for all of its obligations.
Unlimited BC also, like companies whose liability is limited by guarantee, can be without or with the right to issue shares. In the second case, the firm can issue an unlimited number of its shares.
It is a partnership formed by at least one general partner and one limited partner. A limited partnership is denoted by the English abbreviation LP.
A participant in a limited partnership can be either an individual or another company.
The general partner is responsible for the management of the LP in accordance with the terms of the partnership agreement and is generally authorised to act on behalf of the entity.
General partners may, but are not required to, make a contribution to the limited partnership’s start-up capital. Each such founder is fully financially liable for the unpaid debts and liabilities of the LP incurred while he or she is a general partner.
Limited partners are generally prohibited from participating in the management of the firm, engaging in business transactions, signing contracts, and otherwise financially binding their LP.
This type of partner is not fully liable for the debts of the organisation. In the event of the company’s bankruptcy, their risk is limited to the amount of their contribution to the authorised capital of the partnership (until they start participating in the management of the LP like general partners).
Depending on the decision of the general partners, the LP may be registered as a legal entity or it may be established without a legal entity.
In the first case, the limited partnership will need to have a registered office and its registered agent in the BVI. In addition, such a company is required to establish a register of general limited partners and to record all its business activities in the relevant financial statements.
A trust assumes that the settlor will transfer the right to dispose of tangible assets belonging to him to a trustee or trustees. In other words, a trust is designed to hold, manage and possibly dispose of property for the benefit of beneficiaries.
VISTA or Virgin Islands Special Trust is a form of trust specific to the British Virgin Islands that is used to hold shares in local business companies indirectly. A prerequisite for the establishment of a VISTA is the participation in the trust of a BVI-registered licensed trust company.
VISTAs are also used by family business owners to independently manage their company. Trusts are used by large owners to manage their property. Sometimes the funds accumulated by such trusts are used for venture capital investments.
Registering a BC in the British Virgin Islands may seem like a fairly simple task. However, experienced foreign entrepreneurs have long since learnt from their own experience that the best solution is to seek professional advice. This way you will be able to open the company within the statutory deadlines and will not lose your money.
Our company’s specialists will tell you about some of the nuances of the process of registering a business company on the BVI in just a few short paragraphs.
The success of registration and further operation of an offshore company largely depends on the reliability and diligence of the registration agent residing in the British Virgin Islands.
Under current laws in the BVI, it is not possible to apply for a company registration directly with the government, bypassing the local registration agent.
As a rule, the registration agent provides foreign entrepreneurs with his office as the legal address of the offshore company.
It is with the registration agent that the articles of association, memorandum, registers and other documents of the offshore company are kept.
Under BVI corporate law, an offshore company will need to find a new registration agent as a matter of urgency if, for whatever reason, co-operation with the current agent fails. Otherwise, the business may be taken over by the state.
Thus, the reliability and integrity of the local registration agent become very important parameters for the owners of an offshore company. To eliminate all risks, entrepreneurs trust Imperial & Legal — specialists with an impeccable business reputation.
The selection and verification of a name for your company is not very different from that in other countries. As elsewhere, the name of the company cannot be the same as the names of organisations and trademarks already registered with the island authorities.
In the BVI you will find it easier to choose a name because this jurisdiction does not prohibit the use of words and phrases in foreign dialects, up to and including Chinese. However, at the end you must be sure to add one of the common abbreviations indicating the legal form of the company – Ltd, S.A., Inc. etc.
Usually businessmen come up with several variants of the name for their offshore company, so that our company employees could quickly check them for compliance with the requirements of the law and coincidence with already registered organisations and TMs.
Once registered in the BVI, offshore companies can engage in any commercial activity, but to operate in some areas you will need to obtain a state licence, which will inevitably entail additional costs. We will help you to obtain the necessary licence in a short period of time and without overpayments.
Before starting to draft the articles of association and memorandum of association, the founders need to decide on the structure of their business.
As a rule, we use a standard form of Memorandum of Association for an offshore company, where the following information is entered:
Name and type of company;
The address of her BVI registration;
Registration Agent Information;
Details of the company’s stock data:
We sometimes customise a business company memorandum and articles of association to reflect all the circumstances and requirements of the entrepreneur applying to Imperial & Legal.
Together with the verified company name, articles of association and memorandum, we submit to the BVI notarised copies of the passports of the directors and founders, as well as documents confirming their residential addresses. The latter are usually bank statements or utility bills.
If the shareholder or director of the offshore structure is another company, we provide the registration agent with copies of the incorporation documents. Sometimes it is required that the incorporation documents are additionally provided with a certified translation into English.
The preparatory period, when the structure of the business is agreed, the name is approved and the statutory documents are prepared, takes no more than one week for the experienced specialists of Imperial & Legal.
Fully prepared supporting documents are sent to the British Virgin Islands. Professional legal support, as a rule, excludes all mistakes, so the process of registering your offshore business in the BVI usually takes 1 working day. And only in exceptional cases the procedure may take up to 10 working days.
To maximise the benefits of incorporating a company in the British Virgin Islands, experienced businessmen turn to the specialists of our company. Imperial & Legal practices a personalised approach in its work. Therefore, we will not only help you to register an offshore company within a short period of time, but also advise you on how to take advantage of all the advantages of this jurisdiction for your business.
In this island nation, offshore structures register to:
Engage in international or online trading and accumulate profits at the place of registration;
To own tangible or intellectual property abroad through another foreign company;
Invest through a foreign firm registered in a country with which the BVI has a double tax treaty;
To provide services outside the British Virgin Islands as an intermediary.
The authorities of the British Virgin Islands do not burden their entrepreneurs not only with corporate tax, but also:
Capital gains tax;
Sales tax and VAT;
Property Tax;
Gift tax;
Inheritance tax.
All registers are kept by the registration agent and can be made available:
To law enforcement authorities on the basis of a court order;
BVI Finance Commission on the basis of a formal request.
No. While the Commission can obtain a register of shareholders of a firm simply by request, the law limits the scope of such data. For example, the Finance Commission will not be able to compile its own register of founders of offshore companies for posting on public resources.
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