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Buy a Shelf Company in BVI

Updated on Sunday 10th October 2021

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Buy-a-Shelf-Company-in-BVI.jpgA shelf company or a ready-made company is a business entity that has been duly registered but has yet to record any trade or commercial activity whatsoever. 
 
Investors who buy a shelf company in BVI do no need to handle the entire company formation procedure. They will need, however, to handle the paperwork associated with transferring the company ownership.
 
The duration of the BVI company incorporation process is effectively reduced when buying a ready-made company. In fact, the investor who purchases a legal entity will only need to handle the transfer papers.
 
The table below is a summary of the four most important benefits of buying a BVI ready-made company:
 
Benefit Description
Quick business commencement The shelf company allows its buyer to start the business activity almost instantly.
Business history An aged company is one that has accumulated a number of years in existence thus has business history and possibly more credibility.
Easier access to credit
Companies that have had a longer existence can, in most cases, access corporate credit more easily than startups or young companies.
 
Credibility A company that has been in business for several years and has no bad credit or debts is perceived as a more credible one; building client confidence can be important.
 
Our team of BVI company formation specialists can help you purchase an already existing company and start your business activities in the shortest amount of time possible.
 

Ready-made shelf companies in BVI

 
The price of a BVI ready-made company will vary according to the type of legal entity that is being purchased and, in some cases, even according to its actual incorporation date (its “age”). An older company will have required more upkeep and will have an increased value. At the same time, old companies with absolutely no trading history can be harder to find and this makes them even more valuable. Different providers will offer different types of companies and investors should look for a company that will be as old as they need and not necessarily much older so as to cut the cost associated with buying a very aged (and thus pricier) company. In most cases, irrespective of the actual age of the company, the entire procedure of purchasing the legal entity should last only one day.
 
When the shelf company also includes a bank account and/or a merchant account, the price will be higher as these are often considered premiums when purchasing this type of company. However, this means that you will not need to complete the steps necessary to open a bank account in BVI. It is advisable to purchase a company with added items only when specifically needed and if this is mandatory for your business purposes, have a team of experts perform a due diligence on the bank statements and other records that will be available because of these additional features. Because these companies are present and registered in other locations as well (not only the Trade Register but also the bank for example) it is always recommended to perform a thorough due diligence.
 
These types of companies are usually incorporated by using a standard form of Articles of Association and Memorandum and are registered in order to allow for a convenient degree of flexibility for the future buyers in terms of business activities.
 
When updating the company’s details in the BVI, the Memorandum and the Articles of Association will be publicly stored with the Companies Registry. One of our BVI company formation agents can give you complete details about this step and can recommend a nominee director and nominee shareholder service when needed. This is offered to those investors who wish to remain anonymous and will thus delegate their attributions to the appointed third-party director.
 
While the main advantage is the saved time factor, investors who decide that this is the most suitable way to start a business need to be wary of companies that have been incorporated and were used in previous business activities and transactions, even for a short time.
 
Due diligence is recommended whenever purchasing a shelf company and one of our BVI company incorporation specialists can help you during the selection process. The main reason why this is considered a mandatory step is for the investor to make sure that the purchase is legitimate and that the company does not owe any debts to creditors. A comprehensive analysis of the company’s registration documents as well as tracing any type of activity can be performed by our team of experts. By working with a team of professionals when purchasing a shelf company, you can avoid the risk of purchasing a company that carries a certain amount of risk due to previous activities.
 
The following video summarises the main benefits of buying a shelf company:

The advantages of buying a BVI shelf company

 
The main advantage of buying a ready-made company is that investors can save the time required to complete the BVI offshore company incorporation procedures. Immediate purchase can also allow for immediate use and for immediate engaging in business activities. What’s more, investors can also skip the step needed to find a unique business name, as shelf companies will have an already approved and registered name. The name criteria can apply in many cases, however, those who wish to use a certain business name can perform a company details update once the transfer is complete. Investors who are not concerned with the name of the legal entity whatsoever will enjoy the fact that they do not need to lose any time searching for and registering a new business name.
 
In some businesses, the actual registration date of the company may offer more credibility. This is why some investors prefer to buy a shelf company that has been aged. This means that it has been incorporated for some time but it does not have any debts or obligations. The aged or shelf company can allow for a greater degree of certainty both for business purposes (when entering into new business agreements and for clients) but also for the purpose of obtaining bank loans and credits. When foreign investors need to do business in BVI immediately, a shelf company can be a suitable means of setting up the operations, particularly when the business arrangements cannot allow for any delays or a postpone the signing of the business agreements. While these cases can be rare, making up for potential business delays can be an advantage for certain types of activities.
 
Companies ready for purchase may have all of their incorporation documentation finished or they may have only their name approved and investors will need to handle the subsequent steps. Shelf companies will need to have their new directors assigned and these procedures can only be completed once the company has been purchased, as they are specific to each client.
 
The ready-made company can be particularly useful to some investors and will offer a set of unique advantages, compared to a newly incorporated BVI offshore company. Choosing a legal entity from a reliable source is a step of primary importance for any investor who decides that this is the manner in which he prefers to do business in the British Virgin Islands. The associated costs do not have to exceed those needed to open a company but they can vary according to the age of the company and the preferred package if the investor chooses optional features. It is recommended to estimate the total costs for purchasing a ready-made company versus those needed to open a new legal entity. With due diligence, investors can eliminate any risk that may arise when buying a company that was incorporated by a third party.
 

BVI company incorporation 

 
The British Virgin Islands brings together a number of advantages that are very attractive to foreign investors. Starting with taxation, and also including a good regulatory regime, the British Overseas Territory has much to offer. There are a number of companies available for incorporation and one particular type that reunites all of the main advantages that make this jurisdiction attractive to foreign entrepreneurs. This is the BVI Business Company or BVI BC and it is the most popular type of company in the country as well as one of the top types of offshore legal entities in the world, given the favorable conditions for offshore activities. 
 
Below, our BVI company formation agents highlight the main benefits of the BVI company:
 
  • - No taxes: there are no corporate taxes or income tax; in fact, there are no local taxes and stamp duty; an annual registration fee is applicable. 
  • - Simple company management: there is no requirement to perform an annual audit or to hold annual meetings in BVI; the company records can be deposited in any chosen location and you do not need to move to BVI to manage your company, unless you wish to do so;
  • - Low corporate compliance requirements: the requirements for companies are light, there are no conditions for minimum capital, no need to have a local director as well as other benefits.
  • - Good regulatory regime: the local company formation laws are clear and formulated in order to simplify the procedures and encourage investments.
  • - Stability: the BVI is a jurisdiction that also offers stability and modern infrastructure, along with the fact that English is the official language.
  • - Privacy: companies incorporated here are not required to share information about their directors or shareholders; while there is a requirement to state the names, the Register has a higher degree of confidentiality compared to other jurisdictions. 
When choosing the preferred jurisdiction to set up an offshore company, investors should know that the British Virgin Islands are part of several agreements regarding the disclosure of tax information. For example, BVI is part of the US FATCA, the Foreign Account Tax Compliance Act as well as the Agreement between the Government of the British Virgin Islands and the Government of the United Kingdom to Improve International Tax Compliance. In practice, this means that citizens from these two states and from other states, as per other signed agreements, are required to follow the conditions for filing income tax returns and declare their income derived from other sources. Investors who are particularly interested in the provisions of FATCA, as well as other agreements, can reach out to our BVI company incorporation agents.
 
Investors who are looking forward to setting up a company that offers financial services should know that there are special provisions for regulated entities. The main regulatory agency is the Financial Services Commission.
 

BVI nominee directors and shareholders

 
The nominee director can be used in BVI by those foreign investors who wish to remain anonymous. By doing so, a foreign entrepreneur will prevent the general public from knowing that he is directly linked to the BVI offshore company. A fiduciary relationship is in place between the nominee and the company’s beneficial owner, effectively allowing the latter to maintain control over the business (and the income) all whilst his name is not included in the company’s documents and is not communicated to the British Virgin Islands authorities.
 
The role of the nominee director and his actual involvement in the daily activities of the company is decided by the beneficial owner who requests this service. In practice, the nominee will need to observe a minimum role as per his indicated position – this means that he will undertake a number o administrative functions that need to be performed by the director. Any other additional activities and his involvement are decided when the fiduciary agreement is signed.
 
One issue to keep in mind is that the nominee director service will imply additional costs for company owners. This means that minimum involvement in the company usually translates to lower costs while a more significant percentage of involvement (for example, when the nominee undertakes many of the daily activities of the business) will imply more significant costs. These are to be taken into consideration when selecting this service.
 
The main advantage of using nominee director services is that the beneficial owner is protected from certain tax consequences in his country of origin (the fact that he does not appear as a director who derives income from the British Virgin Islands means that he will not be taxed in his country of origin).
 
If confidentiality is important, nominee director services are suited to those who wish to purchase a shelf company in BVI. The same can apply in case of shareholders  - the mechanism is the same as for nominee directors, through which an appointed nominee shareholder takes on the role on behalf of the beneficial shareholder of the company.
 
If you would like to know more about the nominee director and shareholder service, as well as receive details about the packages available to foreign entrepreneurs, please reach out to our BVI company formation agents.
 

Other requirements for BVI companies

 
Offshore companies in the British Virgin Islands are not subject to an extensive regulatory regime or conditions for functioning, however, they do need to have a minimum local presence and this means having a registered office and a registered agent. For shelf companies, the registered office is already in place as its address is included in the company’s documents. Entrepreneurs who seek this service can also benefit from a package that will include registered agent services once the company is purchased and all the documents are final.
 
The role of the Registered Agent is essential both during the incorporation of the company and later on, for management and other purposes. He is the one who handles most of the incorporation requirements and is the one who makes all the necessary submissions as well as keeps some of the most important company records, for example, the Register of Members and the company’s Minutes and Resolutions. The registered agent services are usually purchased as a package and this is convenient for most investors.
 
In case of shelf companies, the incorporated legal entity that is up for sale will have a certain appointed registered agent. The buyer can choose to continue the relationship with this agent or he may change the agent. This is done by sending a letter to the acting registered agent, asking for his resignation and the transfer of duties and responsibilities onto another agent, this time chosen by the new company owner. The registered agent change is not a complicated process, however, the one that is to be appointed needs to agree to taking over the company. He may choose to verify the company before he decided to accept to provide these services (applicable to all companies, not only in case of shelf companies).
 
The registered agent is an intermediary between the BVI offshore company and the authorities, therefore his role is instrumental in the good functioning of the company. The registered agent is the one who will receive information about the beneficial owners, however, he has a confidential due diligence towards them, and he is not required to disclose them to the Registrar (he may, however, disclose the nominee directors to the Registrar, as agreed, if applicable).
 

Foreign investments in BVI

 
Foreign investors in BVI enjoy full foreign ownership and there are no residency restrictions or requirements. There are many possible uses for an offshore company and investors who are interested in BVI company formation can structure their business as needed. Some of these include the following: trading company, investment company, professional service company, holding company, copyright or patent-holding company.
 
The international trading company is among the most popular types, allowing the investors to offer services as a trading intermediary. These can be for distribution, export or import. When used as an investment company, another popular use for a BVI company, the entity would pool private funds and distribute them into investment instruments structured in other jurisdictions. 
 

Investment statistics in BVI

 
The following figures highlight the evolution of the economic trends as well as foreign direct investments in BVI in recent years:
 
  • - 44.2 million US$ FDI inflow in 2018;
  • - 56 million US$ FDI outflows in 2018;
  • - 19 million US$ merchandise exports in 2018 (out of which 73% were manufactured goods).
  • - top export partners in 2018: Switzerland and Liechtenstein with 5 million US$ export value.
  • - GDP growth in 2018: 3.30%.
 
BVI companies are suitable for investors interested in setting an offshore legal entity that offers a certain degree of privacy and it is suitable for international trade services, for fund management and other purposes.
 
If your desired approach to doing business in BVI is to purchase a ready-made company, our British Virgin Islands company formation agents can give you complete information about how to purchase a shelf company. Contact us for more details and for specialized company formation assistance.
 
 

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Call us now at +230 5252 6703 to 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.

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