The British Virgin Islands is a British Overseas Territory located in the Caribbean and forms part of the West Indies.
The British Virgin Islands is the world’s most renowned offshore financial centre and a leading offshore corporate jurisdiction. Currently, more than half of all offshore companies in the world are incorporated in the BVI. According to the BVI Financial Services Commission Report, in 2018, the BVI commercial registry contained 402,907 BVI business companies. Of course, this number has grown even more since then.
The British Virgin Islands is a very stable parliamentary democracy. The Queen is head of state and appoints a local governor of the British Virgin Islands who exercises powers on Her Majesty’s behalf.
The BVI flag consists of the Blue Ensign and Union Jack, which denotes the status of the British Virgin Islands as a British Overseas Territory.
The British Virgin Islands has abolished corporate income tax for both offshore and locally operating companies and has introduced a payroll tax for local employees. This means that the BVI tax rate is 0% for corporate tax, capital gains tax and withholding tax. This, along with its vast popularity, makes the BVI one of the most renowned tax havens in the world.
|US Dollar (USD
|Capital gains tax
Legislation in the BVI is based on English common law.
The court of final appeal in the British Virgin Islands is the Judicial Committee of the Privy Council in London.
The BVI company law is deemed to be the most progressive among offshore financial centres. It effectively makes a BVI Business Company very flexible and suitable for both small privately-owned asset protection companies, as well as large enterprises listed on the global stock exchanges. This is one more reason why the BVI offshore jurisdiction remains the most popular in the world.
The BVI Company Registry is maintained by the British Virgin Islands Financial Services Commission (BVI FSC), which supervises the industry and ensures high standards of service provision.
The laws regulating BVI business companies and the financial sector are as follows:
The reputation of the British Virgin Islands as a leader in the corporate services industry is well recognised worldwide and can be compared to that of the Cayman Islands.
The jurisdiction’s name speaks for itself. Today, it is hard to find a person in the world of commerce who has never heard about BVI offshore companies. This can create additional value for any business. In the BVI, a company registry check can easily be ordered by the owners or business partners to ensure that a company exists and is in good legal standing.
This can be proven by using the BVI company search which extracts information from the Registry of Corporate Affairs and can usually be issued within one to two days.
The BVI nil tax regime is another great advantage of the jurisdiction for those who want to minimise unnecessary tax burdens and protect their assets.
Among the BVI company advantages, there is a higher level of service compared to some other offshore jurisdictions. Also, the BVI company formation process is fast and usually takes only one day to complete after the application has been submitted to the BVI corporate registry.
There are not many BVI company disadvantages and these are no different from other jurisdictions with a 0% tax rate.
Another reason to incorporate an offshore company in BVI is the possibility of opening a US Dollar bank account at a local bank. Since the US Dollar is the jurisdiction’s official currency, a BVI bank account can be opened for a company, usually without a personal visit. If other currencies are required, it is always possible to open an offshore bank account in another jurisdiction.
Recently, the jurisdiction has become popular for establishing a private trust company that would be a trustee of a BVI trust. This allows the settlor and chosen family members to retain full control of the trust assets. The BVI trust companies are set up as ordinary companies according to the BVI Companies Act, but with a special trust license granted afterwards to manage the affairs of only the designated trust.
Under the BVI Business Companies Act 2004, the following types of entities can be incorporated in the British Virgin Islands:
A BVI company is the best option for the following business activities:
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To incorporate a BVI company, the following CDD documents are required:
The costs of BVI company set up include the following services:
After BVI incorporation, you will receive the following documents:
According to the BVI Business Companies Act 2004, the name of a BVI limited company shall end with particular words or abbreviations. The list of BVI companies’ ending words is as follows:
A BVI company may have an additional foreign character name approved by the Registrar.
The proposed company name shall not be similar to that of a pre-existing company. Such name shall not contain a restricted word or phrase unless the FSC has given prior written consent to the use of the word or phrase.
A BVI offshore company shall at all times have one or more directors, according to the Companies Act. Directors can be individuals or legal persons. The director(s) can be of any nationality and residency.
The directors of a BVI company can be granted very broad powers by means of the company’s articles of association, which may significantly ease company administration in corporate matters.
There are no restrictions regarding the nationality or residence of the shareholders of a BVI company. They can be either individuals or legal persons.
Nominee services are allowed in the British Virgin Islands. Astra Trust can provide nominee services and assist with all corporate matters to ensure that your company complies with all legal requirements of the BVI’s legislation.
The vast majority of offshore companies incorporated in BVI are companies limited by shares. The authorised share capital can be of any value, however, when such capital exceeds 50,000 shares, the government fee for the incorporation and renewal of such a company rises significantly.
The British Virgin Islands is a pioneering jurisdiction that has abolished the capital maintenance doctrine and the concept of authorised share capital. This effectively means that a BVI company may not indicate the amount of share capital in its memorandum of association, but must simply state the maximum number of no par value shares that can be issued.
That is why the standard number of shares of a BVI offshore company is usually 50,000 shares of no par value. Of course, the authorised share capital amount can be indicated and adjusted to suit particular needs. The share capital with par value can be denominated in any currency.
The share capital issued to shareholders can be of any amount, from a single share to all the shares authorised to be issued by the BVI company.
The BVI company registry is closed to public inspection. This means that information about directors, officers and shareholders of a company is not available to the public. The BVI company search document can be ordered by anyone, but it does not contain information regarding a company’s directors and members unless the company has intentionally made this information public.
Privacy can be enhanced through nominee services that are allowed and widely used in the British Virgin Islands.
The Beneficial Owner Secure Search System Act, 2017, or the so-called BOSS Act, requires each BVI legal entity to disclose information on its beneficial owners, which is filed in this system. The information itself is not available to the public, but is accessible to designated persons, namely the following BVI authorities:
A British Virgin Islands company is subject to economic substance requirements.
According to the Economic Substance (Companies and Limited Partnerships) Act, 2019, a BVI company that provides one or several relevant activities must have economic substance in the British Virgin Islands connected to the relevant activity in each financial period during which income was derived from such activity.
For the purposes of the Economic Substance Act, relevant activities are as follows:
BVI companies that are not related to the above activities are not relevant entities and do not fall under the scope of economic substance requirements.
Pure equity holding companies (PEHE) are those companies that solely hold equity participations and only earn dividends and capital gains. For such BVI companies, the minimum requirements will apply, and generally, there will be no need to demonstrate economic substance in the British Virgin Islands.
For companies that do not conduct activities in the BVI territory, there is no legal requirement to file accounts and tax returns in the British Virgin Islands.
Business Activity Restrictions
Requirements for Directors
Requirements for Secretaries
Requirements for Shareholders