The British Virgin Islands are a popular location for basing an offshore business, particularly due to their reputation for lack of business taxation and high investor confidentiality.
The requirements for bank accounts
and banking matters are some of the most popular issues about British Virgin Islands company formation
. Our team of experts answers some of the frequently asked questions on how to open a bank account in BVI.
Does the bank account for the company need to be based in BVI?
It is not mandatory for a BVI company
to open its bank account in the British Virgin Islands
. The corporate bank account can be opened in another jurisdiction, as the foreign investors prefer. For some investors, opening a corporate bank account in another country may be more suitable if the business conducts most of its activities in that country or if the beneficial owners are located in that jurisdiction. In some cases, company owners who are interested in BVI company formation
should take into consideration any personal tax implications that may arise from opening a bank account in one jurisdiction and operating/owning an offshore company. Understanding the local tax compliance and transparency rules in both of the jurisdictions in which the founder is doing business is important in order to avoid these issues.
The chosen bank is an important issue to consider, depending on the services for account management and, even more importantly, the associated costs. Some investors may choose to open a corporate bank account with a financial institution with which they have collaborated in the past and one that offers services that suit their needs.
What are the documents needed for opening a BVI bank account?
The documents needed to open a bank account are different for companies compared to individuals. Companies will need to submit proof of company registration, information about the company directors including their identification documents and, in some cases, their signature specimen. When the company has more than one beneficial owner, all of them will most likely be required to provide their identification documents. The actually required documents can vary from one bank to another. Some of the main types of documents that may be required when opening a bank account in BVI include the following: the account application for, the certified copies of the director’s and shareholder’s passports or IDs, the certified copies of the BVI company, the company good standing status, the business plan and information about the company’s financial situation. Some banks may require a minimum initial deposit that can start at 1,000 USD and have different other values, as imposed by the bank. This aspect should be conformed before commencing the bank account opening procedure and it may be a criterion for selecting a particular bank over others.
Banks are subject to a set of regulations and thus in most cases, they will require the presence of the individual who opens the bank account. This means that the founder/s of the company will be required to be present at the bank when the documents for opening the account are filed. However, in some cases, the bank will accept that a representative, who holds a proper power of attorney issued specifically for this purpose, opens the account. One of our BVI company formation agents can provide additional details about how one of our specialists can act as the appointed representative for this purpose.
The process is simplified for individuals who open a bank account (that is a personal bank account, not a corporate one) as they will only need to provide the identification documents and, as needed, proof of residence or employment. Again, the regulations may differ according to the bank with which one chooses to work with.
What are the services offered for banking in BVI?
The services will depend on the chosen bank and will typically include bank account administration and management, online banking options and a range of other services, as needed. Investors should choose the bank they work with based on a few criteria, including the applicable fees and the types of services they provide to foreign investors in BVI
How long does it take to open a bank account in BVI?
The bank will need some time to analyze the application of the client and issue the acceptance letter. This is a process that may take a few days or as long as one month. In special cases, it can last even more. However, the application process is aided if the applicant is able to properly submit all of the application documents and the requested forms as fast as possible and as requested by the bank in order to avoid any delays.
One of our BVI company formation agents
can help answer any questions about banking matters for your offshore company in the British Virgin Islands.
Doing business in BVI
A BVI company offers a number of advantages and its beneficial owners can use the company for a number of international business activities. The BVI company set up process is a simple one, that can be accomplished fast if all of the documents are in order. The main advantages investors have when they choose to open a company here are the following:
Very fast incorporation: a company can be incorporated as fast as one day, provided that the founders comply with the due diligence requirements.
Low costs for incorporation: the company is not only easy to set up but the costs for incorporation remain low as there is no minimum share capital.
No tax: BVI is one of the offshore jurisdictions with no income tax, no corporate tax, capital gains tax, wealth tax, etc.
Confidentiality: BVI maintains a high level of confidentiality for the company directors are shareholders.
Flexibility: investors who open a BVI offshore company can engage in many types of activities.
Bank secrecy in the British Virgin Islands
BVI is a preferred location to open an international offshore company particularly because of the favorable laws concerning banking secrecy.
Confidentiality in BVI should be understood as such as not as secrecy, as special laws are in place that guarantees compliance with the Financial Action Task Force
requirements for anti-money laundering. The country has signed a number of tax information exchange agreements with various countries and has agreed to share information compliant with the requirements of these treaties or the regulations in force (namely, the Financial Action Task Force regulations). However, this does not mean that company directors do not enjoy a high level of confidentiality. Banking information is disclosed only in certain circumstances such as a proper criminal investigation. Only in this particular case do the banks in BVI provide needed information about their clients to the relevant authorities in charge of the investigation. In other cases, when not expressly allowed, the client’s information is subject to a high degree of protection and it is not divulged lightly to third parties. The names of the directors and those of the shareholders of a BVI offshore company are not publicly available. Moreover, investors may choose to use nominee director and nominee shareholder services in order to further increase their anonymity.
US investors in the British Virgin Islands are subject to the provisions of the Foreign Account Tax Compliance Act, or FATCA as it is commonly referred to. This requires that financial institutions (and non-financial ones) in countries that have adhered to this act should disclose the foreign assets held by US nationals. Some examples of foreign financial institutions that may be required to provide information on the accounts held by US nationals (namely, to forward the information to the Inland Revenue Department – IRS) include the following: banks (depository institutions), mutual funds (custodian institutions), hedge funds, private entity funds (investment entities), some types of insurance companies (with cash value products or annuities). The FATCA regulations generally exclude most governmental agencies and non-profit organizations as well as some small, local financial institutions.
One of our BVI company formation agents can provide you with complete information on the Foreign Account Tax Compliance Act and how it applies to the British Virgin Islands.
United Kingdom investors in BVI should know that a similar agreement is also in place in their case, namely the one between the Government of the British Virgin Islands and the Government of the United Kingdom to improve International Tax Compliance (UK CDOT or UK FATCA).
Other relevant provisions include those of the Common Reporting Standards (CRS) that stipulate the manner in which jurisdictions may obtain information from their financial institutions on a yearly basis. The main legal resource for the implementation of these provisions is the Guidance Notes on the Common Reporting Standards and Requirements of the Legislation Implementing the Common Reporting Standards in the Virgin Islands. One of the most recent changes also introduced a requirement for nil reporting for CRS.
BVI financial institutions need to enroll for the UK FATCA as well as the UK CDOT and the CRS using a special portal designed for this purpose. When opening a bank account in the BVI, it is common for the chosen bank to have observed the enrollment and submission deadlines.
The disclosure provisions of the aforementioned international agreements signed by the BVI are important in the context of bank secrecy. Investors should be well aware that the financial institutions they work with are subject to certain requirements. Likewise, investors who wish to open a BVI offshore company that provides financial services should be aware of the reporting requirements they will need to observe as well as the enrollment and submission provisions for the respective agreements.
The British Virgin Islands are one of the most popular offshore centers, together with being a compliant jurisdiction that has not been subject to a blacklist by the Financial Action Task Force. Opening a bank account in BVI is, in most cases, part of the company formation packages and many investors are interested in setting up their accounts with a BVI bank. The following statistics applied for 2017 as per a report issued by the BVI Financial Services Commission:
- Company incorporations in Q4 2017: 8,538.
- Private trust companies in Q4 2017: 31.
- Limited partnerships in Q4 2017: 27.
- BVI business company incorporations in 2017 (Q1-Q4): 32,493.
The British Virgin Islands offer important business advantages and a number of banking options for those who are interested in BVI company set up. Noting the important regulations for financial disclosure currently in force is important, however, for the most part, account holders are subject to a high degree of confidentiality. Opening a bank account in the Virgin Islands is a process that can take place with the help of our team. Investors who choose to have their company professionally managed should also note that they could choose between having a joint signatory or sole signatory on the company’s bank accounts.
Please do not hesitate to contact us
for more information and advice on offshore companies and offshore bank accounts in the BVI