The British Virgin Islands (BVI) are one of the top offshore destinations for foreign investors. The Business Companies Act is the one governing company formaton and defines the International Business Company, a legal structure similar to that used in other offshore jurisdictions.
The Islands are a British Overseas Territory in the Caribbean and an important advantage for foreign investors is that the primary language spoken in the islands is English. Tourism and financial services are the two pillars of the economy, the latter being supported primarily by a large number of offshore companies incorporated here.
The British Virgin Islands company formation process is simple and straightforward, this being one of the top advantages for investors.
Among the top advantages for opening a BVI offshore company we can list the following:
-an easy company set up procedure: there are minimum requirements for the formation of a BVI company (one company director and one shareholder) and the incorporation process is a fast one.
-no corporate tax for companies: here is no corporate income tax and no capital gains tax on companies in the BVI.
-no restrictions on doing business: companies can be involved in banking, insurance, and other business fields.
-company incorporation is open for any foreigners: there are no nationality restrictions applicable to foreign investors in the British Virgin Islands.
-high degree of company director and shareholder confidentiality: here are no requirements for the details of the company founders or beneficial owners to be included in public registries.
BVI company formation
The BVI company incorporation process is governed by the British Virgin Islands Companies Act. This document defines the conditions for doing business in the islands and for the incorporation of the Business Company (BC), formerly referred to as the International Business Company (IBC).
The legislation requires an offshore company in the British Virgin Islands to have at least one director and one shareholder. Our BVI company incorporation specialistscan give you complete details on these conditions and those for the company officers. The six general steps for company formation in the British Virgin Islands are as follows:
Reserve a company name with the Registry: this is done in order to ensure that each company has a unique name; the name will end with an abbreviation of the company type.
Draw up the company documents: one of our BVI company formation agents can help you during this step when the company’s Articles of Association are created.
Appoint a Registered Agent: this is required in the British Virgin Island and the details of the agent will be submitted when the company is incorporated.
Submit the documents for registration: all of the company documents, details about the founders (which are not made public) and those about the Registered Agent are submitted for registration with the Companies Registry.
Open a bank account: this step can be performed before the company documents are drafted and it is a mandatory step for company incorporation.
Obtain any special licenses: financial licenses for companies operating in this business field are obtained from the Financial Services Commission.
Information about registered companies in the British Virgin Islands is available from the BVI Commercial Registry for a small fee. The general information that is offered includes details about the registration number, the registered office and the date on which the legal entity was registered. Other information can include the authorized capital and the status of the company.
The video below highlights the process of BVI company incorporation:
No taxes for offshore companies in BVI
The British Virgin Islands represent one of the oldest offshore company jurisdictions and have a legal framework for these types of companies that have been replicated by other tax havens. The Islands have no corporate income tax for offshore companies, an important advantage to all foreign investors.
What’s more, any foreign national is allowed to open a BC in the Virgin Islands. There are no restrictions on nationality and no restrictions on doing business.
Company director and shareholder protection in BVI
Company director and shareholder confidentiality are important for many foreign investors who are interested in BVI company formation. Here, the information about company directors and shareholder is not disclosed upon the registration of the company and the public register is not available for public search.
Investors in the British Virgin Islands have access to a number of corporate services, related both to the actual BVI company set up procedure as well as to the subsequent company administration.
Company management in BVI
The director of a BVI company is the one who has the power to manage, supervise and direct the affairs of the company. There is no requirement for the directors to be British Virgin Islands residents and the number of permitted directors can be outlined in the Articles of Incorporation. The general requirement is that the company must have at least one director. When a situation arises in which the company does not have a director for a certain period, then the manager or the supervisor of the company is the one who will fulfill the role of the company director, as per the Companies Act.
Starting with April 2016, companies in BVI are required to keep an updated register of directors and they need to file copies of this register with the Registrar. However, investors should note that the directors decide the form of this registrar and it is not publicly available. It does contain information such as the name and identification details for each of the corporate directors as well as the date on which they commenced their role (or, when their role ceased, as applicable). Newly incorporated companies are required to file the register within 21 days of the appointment of the first director. When any changes occur in the management structure of the company, the legal entity is required to notify the change within 30 days (by filing an updated copy of the register of directors with the Registrar).
Because the British Virgin Islands is a jurisdiction where the identities of the company directors can be protected by using nominee services, the actual company management process can take place in two ways: when the director is the owner of the company and when the director is not the beneficial owner but an appointed nominee.
In the first situation, the beneficial owner of the company is the one who takes all of the business decisions and sings all of the relevant documents. Moreover, his name will appear on all of the documents related to the formation of the company. However, as stated above, the identity of the director is not made public in the registry, the name/names will appear in the company’s Articles of Association which are available publicly. The use of a nominee director is optional.
The nominee director is not the beneficial owner but has managerial powers through a fiduciary relationship. An agent occupies this position and acts out his duties as per the agreement with the beneficial owner.
In addition to the register of directors, a company is also required to keep a register of members. investors who are interested in BVI company set up should know that this register will contain information such as the names and addresses of members, the number and class of shares owned by each member. When the company issues bearer shares, the number of bearer shares owned by each member as well as the identifying number of each bearer share certificate. One of our agents who specialize in company formation can provide more information about the register of members as well as the register of directors.
A requirement does exist for holding annual general meetings for BVI companies, however, this is a flexible requirement because there is no condition to hold the meetings in the British Virgin Islands. Moreover, as per the Business Companies act 2004, the director’s meetings can take place by telephone or other electronic means as long as all of the participants to the meeting are able to hear each other.
Bank accounts in the BVI
Investors will commonly open a bank account in BVI when they incorporate the Business Company, the business form commonly used for offshore purposes. with some banks, the company directors will need to submit a set of documents that will be used for identification purposes. the company’s constitutive documents will also be required. One option is to open a bank account by using an approved intermediary. Our team of offshore company formation agents can help you both with the BVI offshore company set up and the creation of the bank account. Our company formation packages can be customized by investors in order to include bank account opening services, as needed.
Shelf companies in the BVI
Investors in the British Virgin Islands have the option of purchasing a ready-made or shelf company. This is a legal entity is one that has already been registered in BVI or one that is ready for immediate registration. Investors can buy a ready-made company when they wish to save the time needed to incorporate and although this is a short time in BVI, the shelf company also has an important advantage: for trading and business purposes, a company with a later incorporation date may have more prestige. Entrepreneurs can also purchase a shelf company if they do not have the time to propose a unique company name and want to use one that is already registered.
Regulated and restricted companies in BVI
The British Virgin Islands Financial Services Commission regulates companies in selected business fields. Baking and fiduciary companies, insurance companies as well as insolvency practitioners and registered agents are considered regulated entities. The Commission maintains an updated list of these entities that can be accessed by the public as well as other market participants.
Another category of companies in the British Virgin Islands are the regulated purpose companies (RPC). These business forms include specific information in their Memorandum that limits their purposes. In most cases, these companies are used for structured finance transactions or they are created for the sole purpose of holding certain types of assets. Investors should note that these types of companies must state their limited scope as soon as they are incorporated. The certificate of incorporation issued for this type of business will expressly state the restricted purposes for which the legal entity is used.
Our team of BVI incorporation specialists can provide interested investors with more details about regulated companies as well as the RPC company.
According to the Financial Services Commission, the following situation regarding the number of companies was applicable at the end of 2018 as per the Statistical Bulletin:
-9,126: the number of business companies, private trust companies, and foreign companies in Q2 2018.
-9,789: the number of legal entities in Q1 2018;
-7,621: the number of companies in BVI in Q2 2017.
According to the same Bulletin, the number of new company incorporations in BVI in the second quarter of 2018 increased by 19.75% in 2018 compared to the same period in 2017.
According to business type, the most popular business form is the company limited by shares, accounting for 99% of all the Business Companies in BVI. The rest are unlimited companies without an authorization to issue shares as well as unlimited companies authorized to issue shares.
Call us now at +44 203 287 0408to set up an appointment with our business consultants in the British Virgin Islands. Alternatively you can incorporate your company without traveling to the British Virgin Islands.
As a BridgeWest client, you will beneficiate from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in the British Virgin Islands.