Understanding benefits is essential when exploring the nuances of company formation in Anguilla vs BVI. Knowing exactly which jurisdiction works best depends on your personal business goals and structure. A good place to start is figuring out if you need Anguilla company advantages or whether BVI’s offerings are more aligned. Consider if you require the advantages of an Anguilla limited liability company or if a BVI structure suits you better.
Anguilla Offshore Company
Anguilla offshore companies are widely used for tax planning worldwide. This British Overseas Territory offers a strong legal system based on English law.
Tax Haven
Anguilla is known to be a 0% jurisdiction, which puts her in 35th place in the Corporate Tax Haven Rank. That means that there is no income tax for individuals or corporate entities, as well as no withholding or capital gains tax.
It does not matter if it is a limited liability company or an unlimited company you are planning to register—all of them enjoy the mentioned tax benefits.
Along with other offshore centres like BVI, the Cayman Islands, or Bermuda, Anguilla also offers:
- no corporate tax;
- no VAT;
- no wealth tax; and
- no inheritance tax.
Anguilla is a classic tax haven with no taxation for international business.
Privacy and Absence of Public Record
Anguilla is well known for the maintenance of high privacy standards, ensuring the secrecy of the company’s ownership. There are no open registers of shareholders or directors, which undesignated third parties might have access to.
This makes the jurisdiction of Anguilla the ultimate choice for international businesses valuing their privacy.
Anguilla is a part of the Automatic Exchange of Information as a part of the CRS reporting system starting from 2016. According to the International Tax Compliance (CRS) Regulation, the reporting does not include dormant accounts with a balance that does not exceed USD 1,000.
Since the USA is not a part of the CRS exchange system, Anguilla implemented the FATCA reporting standard to exchange financial information about US citizens. Such an exchange of information takes place under FATCA 1 IGA Model. According to this model, reporting financial institutions of Anguilla do not report directly to the US government but to the Comptroller of Inland Revenue.
There are no other tax treaties in place for both Anguilla and the BVI.
Simplicity and Cost Efficiency
There is a big number of offshore jurisdictions worldwide offering offshore company formation, including BVI, Cayman, Cyprus, Anguilla, Luxembourg, and Bermuda.
However, when it comes to the simplicity of the formation process itself, European jurisdictions are not on the list.
The process of registering an Anguilla company is relatively fast and can take between 2 and 3 business days, provided all the documents are in order.
Even though jurisdictions like the Cayman Islands can compete with Anguilla in terms of the simplicity of the company’s incorporation process and BOT status, Anguilla has the advantage of a cost-effective solution.
The usual price for Anguilla offshore company formation with Astra Trust starts from EUR 1,199.
Asset Protection
Anguilla offers a strong legal foundation for asset protection for those willing to preserve wealth through generations or to simply protect it against creditors.
Anguilla’s trusts are an especially powerful tool to protect wealth.
Income generated by Anguilla’s trust is exempted from any taxation, on the condition that the trustee, beneficiaries, and assets of the trust are located outside Anguilla.
Key Takeaway
Anguilla offers cost-effective and robust companies with a strong reputation of a British Overseas Territory. It has fewer regulatory obligations compared to BVI.
British Virgin Islands: A Hub for International Business
The BVI has earned itself a name as one of the top places to set up international businesses. With a reliable system and a great position as a global financial centre, you should highly consider the jurisdiction.
Outstanding Reputation
The British Virgin Islands are known to be a primary jurisdiction for setting up offshore companies. The biggest number of offshore companies worldwide has been registered in the BVI.
Same as Anguilla, the BVI is a British Overseas Territory. The British Virgin Islands are known for their stable economic, legal, and political environment. Despite the introduction of enhanced compliance requirements, the BVI remains a prior choice to many investors over other offshore centres like Cayman, Cyprus, Anguilla, Luxembourg, and Bermuda.
Same as the Cayman Islands, the BVI is packed with the largest top-tier law firms ready to provide their clients with top-notch legal support in company formation.
No Concept of Capital
The BVI was the first jurisdiction to abolish the concept of issued share capital. That step significantly eased corporate governance within the company.
Other jurisdictions, including Anguilla and the Cayman Islands, have subsequently followed the same approach.
No Tax Jurisdiction
The BVI is a classic offshore, which basically means:
- no withholding on income tax for individuals or entities.
- no wealth tax;
- no stamp duty tax;
- no capital gains tax; and
- no inheritance tax;
It does not matter whether it is a private limited company or partnership, since all legal entities registered in the BVI are exempted from direct taxation.
There is, however, a minor exception for a stamp duty tax related to the land located in the British Virgin Islands. Companies holding a title of ownership over the land in the BVI should pay stamp tax on transferring the property.
Purpose of Business Company
While comparing company formation in Anguilla vs. BVI, it is essential to understand the goal you plan to pursue.
The BVI offshore companies are suitable for various business purposes, including holding company for IP rights or assets, trading company, vessel ownership, international trade, etc.
An Anguilla offshore company is the same universal solution for asset holding and international trade, known inter alia for its developed captive insurance industry.
Key Takeaway
BVI is a leading financial centre for company formations offshore. The number of offshore entities registered in BVI is by far exceeding any other offshore jurisdiction.
Anguilla vs BVI: Key Factors to Consider
Anguilla and BVI are both considered as tax haven jurisdictions offering various tax perks to international businesses and high-net-worth individuals.
While the legislation for offshore company formation remains more or less similar for both islands, there are certain differences.
Requirements for Directors
Same as in the BVI, an Anguilla company should have at least one director. A director could be an individual or legal entity. The law governing a company’s formation in Anguilla does not set up any requirements for nationality or residency of an appointed director.
A director can be changed at any time by the resolution of shareholder meetings. Changes should be registered properly within 15 calendar days after a change is made.
The law, however, imposes certain limitations with regard to a person who cannot be appointed as a director of an Anguilla offshore company:
- less than 18 years of age;
- has a bankruptcy status;
- has a disqualification order to act as a director, issued by the court.
Requirements for the appointment of a director for a British Virgin Islands company are slightly different.
While both jurisdictions allow at least one director (despite being an individual or corporate entity), the residency requirement of a director might be an issue. Even though the BVI Business Companies Act does not set up specific residency requirements, it still could be an issue by virtue of other legal acts.
In fact, according to the BVI Economic Substance Act, when a company undertakes one or a few “relevant activities”, a place of management in relation to those activities should take place in the BVI. Under “relevant activities”, business ventures like financial or banking services are included.
It is common for both jurisdictions that a person appointed as a director should give their prior consent for such an appointment. At the same time, the BVI law explicitly states that if a company does not have any directors, a person who directs or manages the daily business of a company is considered to be a director.
Requirements for Shareholders
According to the Anguilla Business Companies Act, a company could be set up with at least one shareholder. Same as for directors, there is no qualification or residency requirements. Besides that, a shareholder could be an individual or corporate entity.
A share certificate should be issued to every shareholder in the company. Though the register of shareholders is private and is not accessible to the public, it should be kept with a registered agent for the whole time of the company’s existence.
Same as for Anguilla, the BVI company should have at least one director of any residency, being an individual or corporate entity. The registers of shareholders, however, should be kept up to date not only with a registered agent but also with the BVI Registrar of Companies.
Even though the register of shareholders is not publicly accessible, third parties do have a right to get information based on a special request to the BVI Registrar of Companies.
Annual General Meeting
There is no mandatory requirement to set up an annual general meeting. Both jurisdictions follow the approach according to which corporate governance of a company is the sole responsibility and business of its members and shareholders.
When it comes to the BVI, if a mandatory annual general meeting is established in the articles of the company, in that case a meeting should be held in any case.
Types of Business Companies Available
The type of company is essential since it directly defines future obligations and possible liabilities of their shareholders or directors, the size of issued share capital, and internal corporate governance.
When comparing company formation in Anguilla vs BVI, it becomes evident that both jurisdictions allow the setup of the same types of companies:
- company limited by shares;
- a company limited by guarantee that is not authorized to issue shares;
- a company limited by guarantee that is authorised to issue shares.
- an unlimited company that is not authorized to issue shares; or
- an unlimited company that is authorised to issue shares.
Company Limited by Shares
This type of company is widely used in offshore business for tax planning in Anguilla and BVI.
According to Article 7(2) of the Anguilla Business Companies Act, a company limited by shares could be registered as a restricted purposes company only on the date of its incorporation. At the same time, a BVI company limited by shares can be registered as a restricted purposes company either on the date of its incorporation or on the date of its continuation.
A restricted-purpose company is used to limit the activity, which is extremely helpful for companies holding IP rights, for instance.
Company Limited by Guarantee
An Anguilla limited liability company should have at least one member who is a guarantor, whether the company is authorised to issue shares or not. Such a guarantee member can also be a company’s shareholder only for a company authorised to issue shares.
The same requirements are being imposed towards the formation of a company limited by guarantee in the BVI.
Usually, a company limited by guarantee that is not authorised to issue shares is used in charity business or other associated non-profit activities. The main difference between a company authorised to issue shares and one that is not is the scope of liability for its members/shareholders.
Key Takeaway
Choosing the right offshore jurisdiction is a balancing act between tax implications, regulatory requirements and privacy considerations. While both BVI and Cayman Islands offer substantial tax benefits, their regulations differ significantly; BVI’s flexibility attracts foreign investors while Cayman’s stringent rules ensure stability.
Bank Account Opening
Before making the final choice for offshore company formation, you would need to decide about the company’s business activities.
If you plan to register a business company for simply holding certain assets like the title of real estate property or certain IP rights, both Anguilla and the BVI are good choices.
On the other hand, if you are planning for your future company to be engaged in trading activity, think about opening a bank account. Not all banking and financial institutions would be eager to open a bank account for a company registered in a classic offshore jurisdiction like the BVI.
Cost of Formation and Maintenance
The expenses related to setting up and running a company matter.
Generally, the costs for offshore company formation in Anguilla are slightly lower compared to the BVI.
When setting up a company in either jurisdiction, keep in mind future costs that might be involved.
This fee includes professional fees of the registered agent for the provision of the registered office address and filing all required documentation for company registration. Government fees are usually included in that price.
Annual Maintenance Fee
This is a fee paid to keep your company in Anguilla or in the BVI renewed for the next business year. The said annual fee includes (a) professional fees of your registered agent; (b) provision of a registered office address for your company; as well as (c) government renewal fees.
The deadline for the BVI annual maintenance fee differs depending on when exactly the company was registered. If a company in question has been registered before the 30th of May of the current year, the annual maintenance fee should be paid by the 30th of May next year. When a company is registered after the 30th of May and before the 31st of December in the current year, the annual maintenance fee should be paid before the 30th of November next year.
The deadline for payment of the annual maintenance fee in Anguilla is on a company’s anniversary date.
The amount of the annual maintenance fee in the BVI does not depend on the business company’s type (e.g. limited liability company or company limited by guarantee). What really matters is the number of issued shares. If the BVI company’s share capital is 50,000 shares or more, the government fee for the annual maintenance will be higher. The same rule applies for Anguilla as well.
Annual Return Fee
According to the newly established reporting requirements, every BVI company needs to submit an annual financial return to their registered agent.
This is a summary of all annual accounts and balances. Even though a financial report won’t be disclosed further to the Registrar, failure to submit such a report will result in increased penalties.
By virtue of the Anguilla Business Companies Act, every Anguilla company should file an annual return.
This requirement applies to both jurisdictions and all types of companies, including limited liability companies and partnerships.
Regulatory and Compliance Requirements
Another important consideration to compare company formation in Anguilla vs BVI is the availability of additional compliance requirements.
Provisions on regulating economic substance for companies are governed by the following legal acts:
It is essential to understand that all companies performing any of the relevant business activities below are subject to such reporting: banking, insurance, holding, headquarters, shipping, and others.
The penalties for failure to submit an economic substance report are two times higher in the BVI compared to Anguilla.
The process of company incorporation in Anguilla and the BVI is similar.
1. Selecting a Registered Agent
At this stage you would need to pick up an agent of your choice like Astra Trust. You will be required to submit a certain list of documents needed for incorporation:
- proof of identification documents for all directors, beneficial owners, and shareholders who will be appointed;
- proof of address for all directors, beneficial owners, and shareholders;
- CV and some other documents.
Please note that all the documents should be properly certified and translated in English, if needed.
2. Choosing Your Company Name
Select a few different company names of your choice, and your registered agent will check their availability. Please note that the company’s type (e.g., unlimited company or company limited by guarantee) should be reflected directly in the company’s title, including the following:
- “spv limited” for restricted purposes company
- “spc” for segregated portfolio company
- “unltd” for unlimited company
3. Drafting Your Incorporation Documents
This stage involves drafting and signing all the activation documents and resolutions needed to set up an offshore company in the BVI or Anguilla. All the documents are prepared by the registered agent on your behalf. You would need to sign the documents only in case of your appointment as a shareholder or director.
4. Filing with the Registrar
All the documents should be subsequently filed with the Companies Registrar. Usually the registration process of an offshore business company takes up to 4 business days.
5. Offshore Bank Account
If you plan to use the newly registered company for trading, you would need to open an offshore bank account for it. The timeline on bank account opening varies depending on the selected bank and complexity of the application.
6. Maintaining Compliance
After the company is registered, it is important to check the law to make sure all essential compliance requirements are met.
In particular, any company formed in Anguilla or the BVI should submit an annual financial return as well as an economic substance report. Failure to file those reports will result in substantial penalties.
Conclusion
Ultimately, picking between Anguilla and BVI relies on your exact needs. Both provide many ways to meet business goals. They have solid options regarding how each matches business activities or taxation concerns. Carefully consider the benefits of either and match them against expansion plans when comparing company formation in Anguilla vs BVI, so your organisation thrives.
