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Offshore BVI companies and British Virgin Islands company (IBC) description

BRITISH VIRGIN ISLANDS BUSINESS COMPANY (BVI BC)

An “offshore company” is generally understood to be a corporation registered in a “tax haven” – low-tax or zero-tax country. Tax advantages, however, are by no means the only benefit to registering an international business enterprise in a jurisdiction like British Virgin Islands. A typical modern offshore company is a private corporation which is exempt from tax, suitable for virtually any international business activity, has a flexible organizational structure, is not subject to excessive accounting and reporting requirements and maintains certain level of confidentiality with rather limited information available to general public. The BVI offers all of these benefits – and more.

In 1984 the British Virgin Islands adopted International Business Companies Ordinance which marks the beginning of its success as an offshore financial services jurisdiction. Since that time the BVI offshore company has attained a model status in the offshore services industry. Since then BVI has been by far the most popular offshore tax haven with the greatest number of registered offshore companies among all the offshore jurisdictions in the world. Such is the dominance of the British Virgin Islands as an offshore corporate domicile, that in many regions of the world International Business Companies are called simply as “BVI’s”.

In 2005 the BVI introduced a further development in its corporate legislation by eliminating any discriminatory differences between international business companies (offshore companies) and domestic companies. All the companies in the BVI whether they operate locally in the BVI or internationally outside the BVI are registered in the same Register, regulated by the same law, all have the same rights and the same tax regime (tax-free). This is a great advantage as it is harder to determine whether a particular company is actually “local” or “offshore”.

By virtue of its legal and commercial reliability, constant and proficient modernization of corporate legislation and prompt reaction to global changes, BVI has retained a well-deserved reputation between the offshore jurisdictions. As far as offshore business jurisdictions go, BVI is clearly a premium “brand”.

CORNERSTONES OF SUCCESS

These are some of the general advantages of the British Virgin Islands over many other offshore jurisdictions:

US dollar is the official currency in the BVI – therefore, by definition, there can be no currency controls and no artificial manipulation of money supply by the local government.

BVI are a British Overseas Territory, which provides for an outstanding political stability. The country also maintains a low international profile and a clean reputation, thus avoiding the pitfalls experienced by some more publicised and less scrupulous offshore tax havens.

BVI has an independent judicial system based on English Common Law. Laws and regulations are routinely developed in consultation with the private sector. Offshore financial services sector contributes a very significant part to the country’s gross domestic product. Therefore, an inherent and pronounced interest exists both with the government and with the general public to maintain and develop the country’s status as a competitive offshore jurisdiction.

BVI is easily accessible by sea and air, has modern telecommunications and is on US Eastern Standard Time (1 hour behind EST in winters).

THE MOST IMPORTANT CHARACTERISTICS OF A BVI BC IN DETAIL

Exemption from tax

A BVI Business Company is exempt from the BVI income tax, the same exemption applies to all dividends, interest, rents, royalties, compensations and other amounts paid by a company, and all capital gains realised with respect to any shares, debt obligations or other securities of the company. No estate, inheritance, succession or gift tax is payable with respect to any shares, debt obligations or other securities of a BVI BC. All transactions and instruments relating to transfers of any type of property of assets, shares, debt obligations or securities to or by a BVI BC are exempt from the stamp duty, with a sole exception for land-ownership transactions in the British Virgin Islands, in which case stamp duty remains payable.

Legal personality

A British Virgin Islands Business Company has separate legal personality and the same powers as a natural person.

Structural flexibility

A BVI Business Company requires a minimum of only one owner, one shareholder, and one director. All of them can be one and the same person. Apart from the director, the company need not appoint any operating officers. The management structure of the BVI Business Company may be designed in accordance with the widest variety of requirements.

The shareholders, directors and officers of a BVI Business Company may be individuals or corporations and of any nationality. The shareholder’s or director’s meetings need not be held in the British Virgin Islands and there is no requirement for an Annual General Meeting.

Meetings can be held by telephone or other electronic means; alternatively, directors as well as shareholders may vote by proxy.

Where a Business Company has only one member who is an individual and that member is also the sole director, such sole member / director may specifically appoint a reserve director to act in his place in the event of his death.

Provisions against confiscation

If a foreign Government or authority seizes Company shares, or any other interest in the Company in connection with nationalization, expropriation, confiscatory tax, other governmental charge or with a similar cause the Company or a shareholder may apply to the BVI court for an order that the Company disregard the seizure and continue to treat the person from whom the shares were seized as continuing to hold the shares.

Keeping of accounting records

BVI Business Companies do not have an obligation to prepare or file financial accounts. However, records must be kept that are sufficient to show and explain the Company’s transactions; and will, at any time, enable the financial position of the Company to be determined with reasonable accuracy. The information required to be kept includes the records and the underlying documentation which means all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place, all sales and purchases of goods by the company and the assets and liabilities of the company.

Such records do not have to be kept in the British Virgin Islands and the location for keeping the records can be freely determined by the owners of the Company providing the Registered Agent with a written confirmation of the respective address.

There is no requirement whatsoever to file or otherwise make public any commercial or financial information of the Company. Likewise, there are no auditing requirements.

Bearer shares

BVI is one of the few offshore jurisdictions where bearer shares are still permitted. Nonetheless, the legislation has substantially restricted the advantages of bearer shares and effectively negated their original principle – free and anonymous circulation. Bearer shares – while still theoretically available – have in fact become rather similar to the registered shares, just more cumbersome. Bearer shares may not be issued to their actual owner as it used to be in the past century. Instead they must be kept in custody of a licensed custodian in the BVI, or with such custodian outside BVI, together with a written indication as to the actual identity and address of the owner of such shares. No transfer of bearer shares is valid until the new owner is properly identified and the respective identification and address documents provided to the custodian of the shares.

The government registration fees in respect to BVI Business Companies also clearly discourage the bearer shares in the structuring of BVI Business Companies – those fees are considerably higher. Finally – and perhaps the biggest obstacle of all – is the fact that most (if not all) banks are absolutely averse to accept any companies with bearer shares permitted in their Articles.

Various types of incorporations

A BVI Business Company may be incorporated as a company limited by shares, a company limited by guarantee (with or without authorisation to issue shares), an unlimited company (with or without authorisation to issue shares), a segregated portfolio company and a restricted purpose company.

No requirement to state operational objects

There is no requirement to specify the operational objects of the BVI Business Company in the foundation documents of the Company (Memorandum and Articles of Association). However, the company may choose to do so, as a specific type of a “restricted purpose company” is envisaged by the Business Companies Act.

Confidentiality

In order to register a company in the BVI, each beneficial owner, shareholder and director will be required to provide detailed information including legalized copy of identification document and proof of address to the Registered Agent and keep this information updated at all times. Information of the beneficial owners and shareholders stays confidential at the office of the Registered Agent. The Register of Directors is filed to the Registrar, but it does NOT become publicly available.

The only publicly available documents of the companies are the Memorandum and Articles of Association, but these normally do not contain any indication as to the actual shareholders, directors or the beneficial owners of the company.

However, in the modern world, almost all the countries have associated in common fight against international crime and fraud. Information sharing between the countries is inevitable and becomes more automatic and widespread each year. The few countries that do not cooperate are excluded from participation in global finance or face severe restrictions on international financial operations. BVI has always quickly reacted to the changes in the global trends to retain its excellent reputation and impeccable name in the finance sector. It means also more dedicated participation in information exchange. Nonetheless, any information is disclosed only strictly according to the procedure set forth in the respective laws or international agreements. Only limited amount of information is disclosed and NO information is disclosed to the countries that are not part of such agreements with the BVI.

Generally, two types of agreement are the most common basis for information sharing – Tax Information Exchange Agreements (TIEA) concerning tax matters and FATCA for USA residents or CRS for the residents of the countries committed to the CRS concerning banking information.

Regarding TIEAs, the BVI has these agreements in force with more than 20 countries, including USA, UK, Canada, China, France, Germany and others, you can find full list of such countries here. Information sharing according to these agreements is NOT automatic and the requesting party must follow complicated procedure to obtain it. It must identify the suspected person and demonstrate realistic grounds for believing that the requested information is held by the BVI. No information is disclosed based on mere suspicions of tax evasion. The disclosed information may not exceed the requested. So, basically it means that the BVI can only confirm the information that the foreign Government already has in its possession and would not provide any additional information.

As for the banking information, it is shared automatically strictly according to the procedures specified in the FATCA and CRS regulations. Here you can find more information about FATCA or CRS.

Company names

A BVI Business Company may not be registered under a name that is identical to the name of an existing BVI company, or is so similar to the name of an existing BVI Company, that, in the opinion of the Registrar, such name would be likely to confuse or mislead. As the BVI Registrar of Companies has a name-reservation system, a reserved name would also be considered as an already existing name.

Without obtaining a prior written consent of the Financial Services Commission, a BVI Business Company may not be registered under a name that contains a “restricted” word or phrase (according to a published list of such restrictions) – such as the words “Assurance”, “Bank”, “Building Society”, “Chamber of Commerce”, “Chartered”, “Cooperative”, “Imperial”, “Municipal”, “Royal”, “Trust” or any word conveying a similar meaning, as well as any name suggesting the patronage of the British Royalty, British, BVI or any other government or its department.

The Registrar may also refuse the registration of any particular name if, in the opinion of the Registrar, such name is offensive or, for any other reason, objectionable.

The name-endings denoting the type of company

The name of a limited company, shall end with the word “Limited”, “Corporation” or “Incorporated”; the words “Societe Anonyme” or “Sociedad Anonima”; the abbreviation “Ltd”, “Corp”, “Inc” or “S.A.”; or such other word or words, or abbreviations thereof.

The name of an unlimited company shall end with the word “Unlimited” or the abbreviation “Unltd”.

The name of a restricted purposes company shall end with the phrase “(SPV) Limited” or the phrase “(SPV) Ltd”.

The name of a segregated portfolio company shall end with one of the phrases “Segregated Portfolio Company Limited”; “Segregated Portfolio Company Ltd”; “SPC Limited”; “SPC Ltd”; or, in the case of a segregated portfolio company that is a restricted purposes company, one of the phrases specified in this paragraph with “(SPV)” inserted immediately before that phrase or immediately before “Limited” or “Ltd”.

Quite uniquely for BVI, the name of a BVI Business Company may comprise the expression “BVI Company Number” followed by its company number in figures and the ending required, as specified above – for instance “BVI Company Number 987654 Ltd”. A company name expressed in such fashion may also contain additional foreign characters between the company number and the ending.

Appointment of Agents

The directors of a BVI Business Company may appoint any person (including an existing director), to be an agent of the Company. Subject to the Memorandum and Articles of Association such agent has such powers and authority as the directors may prescribe, except that no agent shall have no authority to amend the Memorandum or Articles; to appoint directors or agents; to approve a plan of merger, consolidation or arrangement; or to make a declaration of solvency or approve a liquidation plan.

Annual renewal fees

After the incorporation, a BVI Business Company must pay the renewal fees every year to continue its legal existence. The minimum mandatory fees include Government renewal fee, Registered Agent fee (covers also the Registered Address) and Compliance fee for regular document verification of the beneficial owners, shareholders and directors of the company.

Apart from the fees above, other professional fees may be payable for the Company management and administration depending on the services you have ordered (third-party director/board member, shareholding/share custody, company secretary, business address, call handling or any other services). These services are optional.

All fees are listed in full detail in our Schedule of Fees. The annual fees are charged once a year following the renewal payment schedule of the BVI Company Registry. All the companies registered from January to June must pay the annual fees by the end of May every year starting from the next year after the company registration, and the companies registered from July to December must pay the annual fees by the end of November every year starting from the next year after the company registration.

If the company fails to pay any of our service fees, we will resign from providing the respective services to the company. The company will stay liable for any services already provided.

In case the Government fees are not paid, the penalty fees will apply according to the BVI Business Companies Act. If the company has not paid the renewal fees and/or the late penalty fees, the company name will be struck off the Register. Once the company name is struck off, the company cannot do any business and deal with its assets. Restoration of the company name to the Register is possible, however quite costly procedure.

Fixed Government fee

A BVI Business Company must pay the following annual license fees to the BVI Government:

FOR COMPANIES WITH REGISTERED SHARES ONLY:

USD 450 for Company with up to 50,000 shares, with or without par value.

USD 450 for Company limited by a guarantee or an unlimited company without shares.

USD 1200 for Company with more than 50,000 shares, with or without par value.

USD 7500 for a Restricted Purposes Company.

A SHORTLIST : MAIN CHARACTERISTICS OF THE BVI BUSINESS COMPANY

BVI Company Registration, Formation & Setup Benefits

There’s a reason that about 40% of the world’s offshore companies are BVI Company Registrations. It isn’t because the British Virgin Islands are a nice place to visit.  A BVI offshore company has a wide variety of business uses and great benefits. Thus, it can be a smart business move for your business life. This article will explore what a BVI company is, the benefits it provides, and the uses it has.

What is a BVI Company?

A BVI company is a corporation one or more people or entities form in the British Virgin Islands. The term International Business Company or IBC is the official name for what most people think of as “offshore companies” according to Fidelity. An IBC is a private corporation. One reason a person might use it for international business activity because it avoids certain taxes. In addition, a BVI offshore companies has strict confidentiality provisions and a flexible organizational structure.

The British Virgin Islands (BVI) joined the world of offshore banking in the mid 1980’s. They enacted British Virgin Islands International Business Companies Ordinance in 1984. The islands have become such a popular destination for international companies that many people refer to these companies as just “BVIs” rather than BVI companies.  In 2004, the BVI Business Companies Act removed the distinction between offshore and local companies in the islands. It eliminated any discrimination between the two types and making a BVI offshore company more accessible worldwide.

The BVI have strong political stability and a low international profile. As such, it makes for an ideal location for an offshore tax haven. BVI has an independent judicial system based on English common law. A significant portion of the country’s gross domestic product comes from offshore financial centers. The U.S. dollar is the official currency. The BVI has more than 600,000 incorporations registered, with more than 5,000 new companies registering every month.

BVI Tax Haven

The British Virgin Islands are what people often refer to as a “tax haven” jurisdiction. Investopedia defines a tax haven as a country that offers foreign individuals and businesses a low tax liability; especially within a politically and economically stable environment. Tax havens share little to no financial information with tax authorities. Thus, they often do not require companies or individuals to live in or operate out of the country to receive these benefits.

In addition, tax havens are not only beneficial to the individuals and companies using them. They are also beneficial to the host country as well. Tax havens draw capital from their banks and financial institutions, which can result in a strong financial sector. Individuals and companies utilizing a tax haven country have zero to low single digit tax rates. This is as opposed to the higher rates they would receive in their home country. Along with the BVI, many consider other countries as tax havens including Andorra, Belize, the Cayman Islands, Hong Kong, Monaco, and Panama. Keep that enjoying those tax benefits depends on your country of residence and/or citizenship. For example, the US government taxes its citizens and residents on worldwide income. So, setting up a company in a tax haven such as BVI is generally tax-neutral for such individuals.

BVI Company Benefits

One of the reasons people choose to incorporate an offshore company is for tax avoidance. This benefit, however depends on  the jurisdiction of the owner. Tax reduction is only one of the many BVI company benefits. Maples explains that people often choose BVI for their common law legal principles. Moreover, BVI has administrative simplicity, and security. Beyond that, BVI companies:

• Do not add extra layers of taxation to the taxes investors are already paying in their home country
• Do not impose additional mandatory corporate governance requirements, allowing companies to create their own model.
• Are not required to provide share capital
• Can migrate to or from any other jurisdiction that allows such migration
• Can merge with one or more BVI or foreign companies, and the surviving company may be in another jurisdiction
• May acquire the shares of a member with a solvency test and consent of the member
• Have no financial assistance restrictions
• Have low maintenance costs
• Can list their shares on worldwide stock exchanges

How to Use Your BVI Company

With hundreds of thousands of companies incorporated in BVI, and more incorporating every day, it would be nearly impossible to get a complete list of BVI companies. One of the reasons they are chosen, after all, is for their increased privacy. When it comes to making use of a BVI company, however, there are a lot of options to choose from.

Mondaq lists several possible uses for a BVI offshore company in a separate article from above. Asset or property holding is one of the most popular uses.  That is because using a BVI allows for ultimate flexibility in the disposal of the property. A BVI company can act as a holding entity for another company. Additionally, one may use it to defer taxation and minimize liability when trading companies. The flexibility of a BVI company is great for e-commerce and joint ventures. Trusts and mutual funds can take advantage of the lower taxes and security of a BVI company. A ship registered with a BVI company can apply for British registration. Captive insurance BVI companies – insurance subsidiaries of non-insurance parent companies – can be a valuable tool to lower risk and create tailored financial services for a company.

Set Up a BVI Offshore Company

Setting up your BVI company can be a complicated process. Thus one should, and must by law, do it with the help of an experienced professional to ensure one follows the proper regulations. That is, a licensed agent must perform the service of forming a company in the BVI. Our organization provides such services. According to Mondaq, the BVI Business Companies Act 2004 allows for the creation of five different types of BVI companies:

• A company limited by shares
• A company limited by guarantee that is not authorized to issue shares
• An unlimited company that is not authorized to issue shares
• A company limited by guarantee that is authorized to issue shares
• An unlimited company that is authorized to issue shares

The most common type of company people register is a company limited by shares. To create one of these companies, you will need several things. At the beginning of BVI company set up, every company needs a registered agent and address located within the islands. The firm automatically provides the registered agent for you when you have a professional organization such as this one establish the company for you.  Your company formation agent oversees a lot of the beginning tasks, like the incorporation of the company and appointment of its first directors. One must appoint directors within six months of incorporation.  Directors may be either individuals or corporate entities. At the time of incorporation, the company formation agent will usually also need details of the shareholders.

Full Disclosure

As a full disclosure, this company establishes offshore companies worldwide. Forming companies in the BVI is a specialty. There are numbers and inquiry forms on this website in order to have a conversation with an experienced consultant and to obtain additional details.

The only documents in the process of incorporation that are a matter of public record are the Memorandum and Articles of Association. Everything else – like the details of a company’s beneficial owners, shareholders, and directors – is not. The office of the registered agent securely keeps the register of members and directors, as well as meeting minutes. We keep these files  confidential unless the company elects to file them, and are available for inspection only by the shareholders of the company.

BVI Company Registration

An important part of incorporating your BVI is the BVI company registration, which will be the job of your agent (such as the company hosting this page). Per the BVI Business Companies Act 2004, the Registrar of Corporate Affairs maintains the registry of any incorporated companies, foreign companies, or charges. The BVI Financial Services Commission is the sole regulator of all financial services. They must authorize and license any company or person intending to conduct financial business services within the BVI, and regulate those services as they operate in or from the BVI company. Trademarks and patents go through the commission as well.

When registering a company, the statures require company name to have a corporate suffix. For example, BVI corporations, also called BVI limited companies, must end their name with either Limited, Corporation, Incorporated, Societe Anonyme, or Sociedad Anonima, and their respective abbreviations such as Ltd., Corp., Inc., and S.A. The BVI has a state-of-the-art filing system. It that allows your agent to make company incorporations and post incorporation filings electronically. This results in a fast turnaround for the registration process. The process usually takes 3-5 days plus shipping time.

BVI Company Bank Account

Once your BVI company is set up, it might be a good idea to set up a BVI company bank account. One of the problems with offshore bank accounts is that often, the account holder needs to be present at the bank at some point in the process of opening the account. However, several BVI banks allow company bank accounts to be opened without the holder being present. Keep in mind the policies in this regard change from time to time. So, there is no guarantee that remote opening is still available in the BVI at the time you are reading this. That is not so important, however, because you can open a company in the BVI that has a bank account elsewhere.

The rules and documentation you will need to open an account vary by bank. Most banks need a copy of your articles of incorporation from your BVI company, an application and various know-your-client documentation. One thing you’ll likely need to provide is the identity, client information, and internal information of the actual beneficial owner of the company. The beneficiary could either be the business owner himself, shareholders or directors, depending on how the business is organized. Additional paperwork involved might include a certified passport copy, a copy of a second photo identification, a banker’s reference letter. This is to your benefit because when you request a withdrawal, the bank will really know it is you making the request and not someone else. Plus, it keeps the good guys in and the bad guys out.

Conclusion

The above benefits display some of the reasons why BVI is the most popular offshore company formation center in the world. Establishing a company in the BVI offers many financial, possible tax and international business opportunities. To establish a BVI company and to help you choose the right bank for your organization, you can use the number or inquiry form located above.

Offshore Company is  a service of General Corporate Services, Inc. See the reviews of General Corporate Services on the Better Business Bureau.

Offshore BVI. Offshore british virgin islands. Offshore registration in the British Vingir Islands | Law firm Jus Privatum

Offshore jurisdictions: BVI (British Virgin Islands)
BVI offshore registration

British Virgin Islands, BVI – a group of 36 islands and islets (with a total area of ​​153 sq. km.), Located to the northeast of the US Virgin Islands. Only 16 islands and islets are inhabited. The largest islands are Tortola (55 sq. km.), Anegada (38 sq. km.), Virgin Gorda (21 sq. km.) and Jost van Dyck (8 sq. km.). The capital is Road Town, located on the island of Tortola. The population of all the islands is about 25 thousand people, while about 90% of them live in Tortola.

The British Virgin Islands is a British Overseas Territory. The official language of the BVI is English. The main currency is the US dollar (since 1959).

Currently, the British Virgin Islands is the most popular offshore zone – there in the first half of 2012. 33,065 new companies were registered this year, which is several times higher than the number of registrations in the second-ranking Cayman Islands (4,794 companies). Researchers believe that this is primarily due to the increasing availability of services and the necessary specialists – lawyers, specialists in the organization of trust enterprises, bank employees.

Registration of companies in the British Virgin Islands (BVI) is governed by the International Business Companies Act 1984. Currently, more than two hundred and fifty thousand companies are registered in the British Virgin Islands.

In 2003 and 2004 The International Business Companies Act was amended to restrict the issuance of bearer shares.

The attractiveness of British Virgin Islands companies is determined by the way they are taxed: all taxes are replaced by an annual mandatory fee. The annual mandatory fee for companies with registered shares effective January 1, 2005 is $350 per year if the company is incorporated with a standard share capital of $50,000. This fee is the minimum. The annual mandatory fee for BVI companies with registered capital exceeding $50,000 is $1,100.

A company can only be registered by a specialized registered agent and must have a registered office. The minimum possible number of shareholders is one, the minimum possible number of directors is one. A director or shareholder can be either an individual or a legal entity. The first directors of a BVI company are appointed by the subscriber within 30 days from the date of incorporation of the International Business Company. The appointment of a secretary is not a requirement. It is also allowed to have a director and a shareholder in the same person.

In addition, all newly founded companies are required to maintain a register of directors and keep it at the office of their registered agent. Such register of directors shall indicate the name and address of the director of the company, the date of his appointment and dismissal. At the same time, registers of directors are not provided to the registration chamber.

A BVI offshore company cannot carry out business activities with residents in the British Virgin Islands (BVI), own immovable property in the British Virgin Islands, conduct banking, insurance or reinsurance activities, provide a legal address to other companies.

However, it may hold meetings of directors or shareholders, store corporate and financial records of the enterprise in the British Virgin Islands.

Despite the amendments to the legislation, companies in the British Virgin Islands remain popular among clients interested in maintaining confidentiality: information about shareholders and directors of the company is not actually disclosed to government authorities, and registered shares of an international business company can be issued to a legal entity registered in another offshore jurisdiction that allows the issue of bearer shares.

JUS PRIVATUM law firm is pleased to offer you its services for offshore registration in the British Virgin Islands (BVI).

Additional sections:

• Offshore Anguilla
• Offshore Belize
• Offshore BVI (British Virgin Islands)
• Offshore Hong Kong
• Offshore Dominica
• Offshore Cyprus
• Offshore Malta
• Offshore Panama
• Offshore Seychelles
• Offshore Singapore
• Bank accounts for offshore companies
• Compliance
• Deoffshorization

British Virgin Islands