The British Virgin Islands are an attractive offshore destination, particularly because of the light requirements for management and taxation. A company secretary in BVI is not mandatory, however, investors are advised to follow this step nevertheless as hey will benefit from several administrative advantages.
Our BVI company formation agents can help you throughout the company formation steps and can offer you advice and assistance tailored to your specific business needs, including dedicated secretarial services.
What is the role of the secretary in BVI?
The decision to appoint a company secretary in BVI is an optional one, according to the rules and regulations for a BVI offshore company.
Secretarial services can be of great importance for BVI companies. They will commonly refer to the local administration of the company and to the preparation of various company documents as well as the timely and lawfully tax submissions, when applicable.
The company secretary in BVI will act as the corporate liaison and will handle the basic communications of the company and can be appointed to handle the signing obligations.
Because appointing a secretary is not a mandatory step during the BVI company set up, one of our agents can help you handle this procedure as soon as possible after the company is incorporated.
What are secretarial services in BVI?
Secretarial services for those who open a BVI offshore company will mainly include those related to the normal functioning of the business after incorporation. The list below includes some of these:
•Managerial services: keeping the company registers, handling daily managerial activities, mail and call answering and forwarding, organizing meetings and handling other business matters.
•Filing services: preparing the annual returns, assisting in the submission of documents or, when needed, working with the appointed accountant for streamlining the process.
•Corporate changes services: the secretary can, when needed, be the one to prepare the documentation and handle the steps for making changes to the company.
•Compliance supervision: ensuring that the company complies with the annual submissions and the payment of fees as well as all of the relevant local laws.
The secretary, once appointed, will have a central role in the daily functioning of the company and will handle a number of matters, some of them essential for the continuation of the business. For example, the company secretary can assist with preparing all of the needed documents for changing the company name or making other changes to the company particulars, such as appointing new directors or changing the registered address (to another location in BVI, as the registered address needs to be based in the Islands). Investors should note that the registered agent and the secretary are not the same in BVI.
Investors who are interested in BVI company formation can choose an annual company secretarial plan that includes a number of services. This is common in the British Virgin Islands and there are numerous providers, like our team of agents. Clients can choose to appoint a secretary provided by our company or another business and, in general, the package will include the following:
•Acting as company secretary for the appointed period, usually on a one-year basis
•Preparing the annual fees and preparing the annual accounts that reflect the situation of the company
•Preparing the minutes of the director’s and member’s meetings
•Handling all other company secretarial matters and office matters.
In some cases, albeit this situation is less common, investors may decide to appoint a company secretary only for a specific period of time. This can be called ad hoc services and will target the secretarial assistance for a particular situation, such as when the change of company name is required. Our team of agents who specialize in BVI company incorporation can also provide this particular service, and others, as part of singular packages and not those included for secretarial services. It is the decision of the investors if they choose ad hoc company secretarial services or separate services, as per the needs of the company, offered by a different team.
The fees for secretarial services in BVI will vary according to the company with which investors choose to work. In most cases, an annual package is presented and optional or additional services can be included in addition to the ones that are part of the basic package and that include the services related to the annual submissions and the daily secretarial services.
Our agents summarize the role of the secretary in the video below:
What are other managerial and administrative requirements for BVI companies?
Investors who open a company in BVI need to observe a few basic requirements. There are no restrictions on appointing company shareholders and directors and no mandatory requirements for a company secretary, however, the company must have a local registered office and a registered agent. The registered agent may not perform the function of company secretary; however, he can appoint one after incorporation. The role of the registered agent and that of the secretary may seem to overlap at times, however, the registered agent is the one who will handle the majority of the communications with the BVI agencies and government, as needed, and will be the one to formally handle certain business matters. On the other hand, the secretary is the one who will generally handle matters such as keeping the minutes of the meetings, a mandatory step and one for which the aid of a secretary is important. The agent and the secretary will work together for the good functioning of the business and for ensuring that it remains compliant with the British Virgin Islands for locally registered companies.
The Registered Agent has powers and duties that cannot be attributed to the company secretary, however these duties and powers can be amended in the Memorandum and the Articles of Association. The agent will be present at the registered address (an address that is publicly available). The name and the address at which the agent may be contacted are made public (and remain this way) for the important reason of allowing for easy company contact, as needed. In this manner, any trader, individual or another company that is interested may obtain information about a registered onshore or offshore company in BVI.
The company secretary in BVI has an important role not only as a liaison between the company and the local authorities but also, when needed, between the company and its clients. As far as the good functioning of the business is concerned, tailored company secretarial services can be of important aid when running a business in BVI, especially for those foreign investors who are not present in the Islands at all times.
Requesting company secretary services is optional in BVI, however, investors are advised to select a secretarial package in order to benefit from having complete administrative options.
BVI company formation
The BVI business company is a flexible business structure that can be used for a variety of business purposes, from international trading to asset management and structuring. The management restrictions are low, an important characteristic that contributes to ease of incorporation. Our agents highlight below a number of facts about the structure of a BVI International Business Company:
- Shareholders and directors: only one shareholder and one director are required to open the company and they can be one and the same;
- Type: there are no restrictions on whether the shareholders can be corporate or natural persons;
- Nationality: there are no restrictions on the nationality of the shareholders and company directors.
- Officers: there is no need to appoint company officers, or a company secretary in BVI, as indicated above; however, these solutions are used in practice;
- Management: third-party offshore company management in BVI is possible and the beneficial owner can take advantage of this if he sees fit (namely, using nominee director and/or nominee shareholder services).
The favorable taxation policy is a main attraction point for foreign investors. The BVI is one of the offshore centers in the world and this means that BVI Business Companies are exempt from income tax, dividend taxation, taxes on interest and royalties, capital gains, inheritance, succession or gift taxes. However, foreign investors should be mindful of the fact that the offshore strategies they choose will also depend on the anti-avoidance laws in their country of origin (their country of citizenship and/or the country that serves as domicile for the business). Because of the law taxation requirements, BVI companies are also subject to minimum filing and reporting obligations.
The British Virgin Islands is an offshore center that can be a suitable option for EU investors as the jurisdiction was removed from the “grey list” once it was determined that it fulfills its obligations regarding economic substance. It is useful to note that the BVI has never been blacklisted. The new status is one that reinforces its position as a business center that makes ongoing efforts to prevent tax avoidance and at the same time promotes tax transparency and fair taxation.
BVI nominee directors and shareholders
When they decide to open a BVI offshore company, foreign investors have two main options for the actual management of the business: they can act as the beneficial owners of the company or they can appoint a nominee director.
The first version is for the company to be directed or managed by the beneficial owner. This is an option for many investors and in this case the name will appear in the Registrar of Directors known to the Registered Agent. We once again remind investors that there is no requirement to mandatorily register the name of the director with the Company Registrar (however, this can be optional and our agents can give you more details on the exact steps and the process).
The second version is for the company to be managed by an appointed third-party. This is the nominee director, the one who will occupy the formal position as the company director, however, he does not remain the beneficial owner of the company. This role can be performed by the registered agent, if so agreed. In any case, a fiduciary agreement is signed between the beneficial owner and the nominee director. This is a written statement that can include information about the real level of involvement in the company’s affairs as well as how any transfers are to be made between the two parties.
The nominee director undertakes to act in the interests of the beneficial owner and his involvement with the company can be predetermined. In most cases he is not actively involved and he maintains a formal role when his presence is needed for in-person appearances, formal transactions, the signing and the execution of documents.
Ultimately, the role of the nominee is to provide an additional layer of confidentiality, when the beneficial owner does not wish to make public his direct relationship with the BVI offshore company. For the purpose of providing the greatest level of confidentiality for the beneficial owner, it is advisable to allow the nominee to occupy a more significant role in the company. This allows his to become part of the everyday activities, minimizing as much as possible the beneficial owner’s involvement and presence. Of course, in this case, the nominee has complete control over company matters as well as the bank account. However, his actions remain under the fiduciary duty and follow the indications received from the offshore company owner or owners.
The nominee shareholder service works in much the same way, however in this situation a third party is appointed to act on behalf of the company shareholders. Direct shareholders do not enjoy the same level of confidentiality, just as in the case of directors. For an added layer of confidentiality the same practice is possible: assigning a nominee who will become involved in the activities of the company in order to conceal the direct relationship the other party has with the BVI offshore legal entity.
A nominee shareholder does not have the same level pf exposure as a nominee director simply because the shareholder does nor perform as many functions overall. The nominee shareholder service needs to be selected from the very beginning as one of the mandatory conditions for BVI company formation is to provide at least one shareholder. Once the shares of the company are issued, they can be transferred from the nominee to the beneficial shareholder or as instructed. One nominee shareholder can hold the shares for more than one beneficial shareholder – this is an issue that may present certain advantage to entrepreneurs who wish to open a BVI offshore company but do not wish to act as direct shareholders.
There is no requirement to hold the director and the shareholder meetings in the British Virgin Islands and there is no requirement to convene an annual general meeting. All of these may be scheduled in another jurisdiction or through electronic means. BVI company shareholders and directors who do not use nominee services and who cannot be present at these meetings can vote by proxy.
Facts about the British Virgin Islands
The British Virgin Islands are a volcanic archipelago in the Caribbean and a British Overseas Territory. The largest island if the four main one that comprise the jurisdiction is Tortola and capital city Road Town is located here. Virgin Goda, Jost Van Dyke and Anegada are the other main islands, however, 60 beautiful and unspoiled smaller islands make up the archipelago.
The main attraction points in the Islands are its beautiful beaches, romantic resorts, many different water sports and island hopping. However, this Caribbean paradise is more than just a convenient and beautiful destination. It is also a business hub for investors from the United States and from around the world.
The British Virgin Islands can also be a world-class location for business meetings or important corporate events. The scenery and numerous recreational activities make it ideal for this purpose.
The following entry requirements are used for those who travel to the Islands:
North America: U.S. citizens need to present a valid passport or another Western Hemisphere Travel Initiative (WHTI) approved document; Canadians need to present a passport;
Europe: all European citizens are to present a valid passport in order to enter the BVI and those in selected countries will also need a visa for entry.
Visa requirements: foreign nationals of certain countries are required to obtain a visa in order to enter BVI; some of these countries are China (except Hong Kong), Egypt, Iran, Iraq, North Korea, Syria, Turkey, United Arab Emirates and Vietnam, among others.
Investors traveling to the BVI for business or investment purposes should be mindful of these requirements and can ask our BVI company formation agents for more details. How long one is permitted to stay in the Islands depends on nationality an it can vary from 30 days to 6 months. For example, nationals of a country that is subject to visa requirements who hold a UK, US or Canada visa can enter the BVI for business or tourism matters and remain for a period of no more than 6 months without a visa.
As seen in this article, BVI offshore company formation is a simplified process and using a company secretary in BVI is not mandatory, although recommended. The requirements for directors and shareholders and low and the level of investment confidentiality remains a favorable one while the jurisdiction manages to observe important international regulations that help it maintain its status.
Please contact us for more information about the British Virgin Islands company formation process. Our team of experts can help you with complete company formation services and additional facilities such as appointing a company secretary or working via a virtual office.
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.
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.