Offshore: British Virgin Islands (BVI)
Called by the French 'les Iles sous le Vent', and with a near perfect climate, the BVI has raced to the forefront as one of the premier tax havens of the world. The BVI have the basic offshore financial center attributes: stable, capitalistic government, good communications, an educated population, no exchange controls, and a tax and regulatory climate that encourages offshore activity.
Unlike the Cayman Islands and other Caribbean offshore centers, BVI does not have a diversified financial services industry, but what it does it does well. In the 20 years since BVI, with the blessing of the British government, passed the International Companies Ordinance, the islands' company incorporation services industry has blossomed.
Organisation for Economic Co-operation and Development (OECD)
This emphasis on transparency has earned the British Virgin Islands a stellar reputation in the financial community and a spot on the OECD’s “white list”.
Now, the BVI is the undisputed leader of the pack, with about 180,000 IBCs accounting for nearly half the territory's national income in management fees. The BVIs can now claim to have more offshore companies in their registrar than the Caymans have in theirs (=34,000).
BVI INTERNATIONAL BUSINESS COMPANIES (IBCs)
The BVI government recognizes the importance of its offshore business. The International Business Ordinance was introduced in 1984. This provides for the incorporation of companies exempt from BVI taxes. The success of the financial sector in the British Virgin Islands (BVI) is due almost exclusively to its role as the world's leading jurisdiction for international business companies (IBCs). Increasingly Asian, Middle Eastern and Eastern European companies are being drawn to the British Virgin Islands for its high quality Financial Services sector and particularly its Offshore International Business Companies.
ABOUT BRITISH VIRGIN ISLANDS
The British Virgin Islands is a British Dependant Territory consisting of numerous small islands (many uninhabited) approximately 50 miles east of Puerto Rico and adjacent to the United States Virgin Islands in the Caribbean Sea, only 2 hours by jet from Miami. The Principal islands of the British Virgin Islands are Tortola, Virgin Gorda, Anegada and Josh Van Dyke. The capital of British Virgin Islands is Road Town, situated in Tortola. The population of the islands is about 19,000 with an ethnic diversity of Afro-Caribbean, European, American and Asian. The language is English and the currency is the U.S. dollar. There is no exchange control in British Virgin Islands.
The Queen of England is the Head-Of-State of the British Virgin Islands. She is represented by an appointed Governor. Britain is responsible for the islands defense, internal security and external affairs. There is a bi-cameral Westminster modeled Parliamentary Democracy with locally elected members.
A stable and established political structure is essential to the continued success of any offshore financial center. The strength and success of the British Virgin Islands as a low tax center is in no small measure attributable to its longstanding and stable democratic political system.
Judicial and Legal Structure
Principals requiring the use of offshore facilities will want and need to understand the legal framework of the area within which they wish to operate. The Judicial System is under the direction of the Eastern Caribbean Supreme Court, which includes the High Court of Justice and the Court of Appeal. The Final Court of Appeal resides with the Privy Council in England.
The legal system in the British Virgin Islands is based upon English law and is of Anglo-Saxon origin and therefore offers a tried and tested system with which many international operators will be comfortable and familiar. Furthermore, it is a system which is suited to company structures and which fully recognizes the Anglo-Saxon trust concept. This fact is most often crucial to the success of an international structure.
The British Virgin Islands economy is primarily dependant on Tourism and financial services. Tourism revolves around diving, yachting and cruise tourism. Endless white sand beaches on Anegada to emerald green mountains on Tortola. The numerous islets and cays offer excellent yachting experiences or secluded beaches for lazing and sun tanning. Also available is a rich and varied culture. Events throughout the year highlight local history, art, dance and music.
Accommodation is provided for the visitor in the many luxury resorts, family-like villas, inns and quaint hotels. Approximately 55% of overnight visitors stay aboard yachts, and these visitors account for 60% of total visitor revenue to the tourism industry.
The British Virgin Islands has frequent same day air communications with North America and Europe. Telephone, telex and facsimile facilities compare favorably with any international financial center and worldwide postal and courier services are available on Tortola.
The British Virgin Islands is one if the world's leading finance centres, offering leadership, the integrity of a progressively governed British Dependant Territory and a sophisticated democratic and stable society. There is a commitment to the investor's right to privacy and a professional banking, legal, accounting, trust and management services. With the private sector, the Government continues to accept innovative financial services concepts, consistent with its priority of protecting and enhancing the reputation of the finance industry.
ADVANTAGES OF THE BVI
INTERNATIONAL BUSINESS COMPANIES (IBCs)
Unlike the majority of offshore centers, the British Virgin Islands offer the discretion of not having to disclose the beneficial ownership of companies to any authority or person in the British Virgin Islands.
Low cost maintenance
The British Virgin Islands has succeeded in avoiding the necessity to involve the principal in hefty fees, duties and charges by virtue of its uncomplicated operating procedures and statutory requirements and has justly earned a reputation as one of the least costly offshore centers worldwide.
According to the BVI IBC Act of 1984, the offshore companies are exempted from all the taxes in the British Virgin Islands for the period of 20 years.
Double Taxation Agreements between the United Kingdom and Japan and Switzerland extend to the British Virgin Islands but do not generally apply to IBC's.
Change of Domicile
One advantage of an IBC is that it may change its domicile from the British Virgin Islands to another jurisdiction, i.e. it may, for whatever reason, de-register as a company in the British Virgin Islands but in order to continue as a corporate entity it will need to register in whatever other jurisdiction it goes to.
Non-British Virgin Islands incorporated companies may also change their domicile to the British Virgin Islands by lodging Articles of Continuation there, from which time they are recognized by the British Virgin Islands Government as having a legal corpus there. On seizure of assets or prejudice of interest of shareholders by a foreign government, an IBC may obtain a court order to disregard the actions of the foreign government.Restrictions on BVI IBCs on carrying on any business activities outside the BVI.There are no restrictions on doing business outside of the BVI by IBCs except illegal activities or such activities that require additional licensing such as: provision of the banking services, services of the insurance and trusts.
FORMATION AND STATUTORY REQUIREMENTS
The only documentation that needs to be lodged by an IBC, upon incorporation, is the Memorandum and Articles of Association. This will give details of the Registered Agent and Registered Office. Directors and shareholders are not on public record.
Time to Incorporate
IBC's can be ready-incorporated and held as shelf companies on an immediate basis and can deliver incorporation documents by courier within 48 hours. When a specific name is required, incorporation can normally be arranged within 24 hours, with courier delivery of the incorporation documents within one week.
Please feel free to:
Contact BEAUFORT at (65) 62277 269
Request for a list of ready-incorporated shelf BVI Companies.
Authorised and Issued Share Capital
The normal authorised share capital is US$ 50,000 with all of the shares having a par value. The share capital may be expressed in any currency. The minimum issued capital is one share with or without par value. Classes of shares permitted are Registered shares, bearer shares, shares of no par value, preference shares, redeemable shares and shares with or without voting rights.
- Companies with an authorised capital up to US$ 50,000 pay US$ 350 per year.
- Companies with a share capital more than US$ 50,001 pay the sum of US$ 1,100 per year.
- Companies with a share capital that does not exceed US$ 50,000 and having some or all of its shares with no par value pay the sum of US$ 420 per year.
Application of Name
Any name that is identical or similar to an existing company, or any name that suggests the patronage of the Royal Family or the Government of the British Virgin Islands is restricted. Any name in a language other than English must be accompanied by a translation to ensure that the name is not restricted.
Suffixes to Denote Limited Liability
Limited, Corporation, Incorporated, Societe Anonyme, Sociedad Anonima or their relevant abbreviations.
Shareholders, Directors, Secretary, Registered Office
Shareholder(s) and director(s) of an IBC need not be British Virgin Island residents,. The shareholder(s) and director(s) can be a natural person or a corporate body. Only one shareholder and director is required. Shareholder(s) and director(s) may be the same person.
The concept of secretary is not recognized in the British Virgin Islands but there is no objection to such an appointment if so required.
An IBC must have a Registered Office and a Registered Agent in the British Virgin Islands and a copy of its Shareholders Register has to be kept at the Registered Office but is not open to public inspection.
Location of Company Records
The statutory records of a British Virgin Islands company may be kept anywhere in the world but an imprint of the Company Seal must be held at the Registered Office if the seal is outside the British Virgin Islands.
Whilst there is no requirement to audit and file financial reports with the authorities, it is a good corporate practice to maintain proper accounting and financial records.
BUSINESS WITH RESIDENTS & LOCAL COMPANIES
Doing business with BVI residents and companies
A company in the BVI is restricted from doing business with BVI residents or companies except where:
It makes or maintains professional contact with solicitors, barristers, accountants, bookkeepers, trust companies, management or secretarial companies, investment advisors, or other similar persons or entities carrying on business within the BVI.
It prepares or maintains books and records within the BVI (if it decides to keep such books and records).
It holds within the BVI, meetings of its directors or members (if it so desires).
It holds a lease on property for use as an office from which to communicate with members or where books and records of the company are prepared or maintained (if so decided).
It holds debt obligations, shares or other securities in British Virgin Island IBCs or any other locally incorporated company.
Shares, debts obligations or other securities in the company are owned by any person resident in the BVI or by any BVI IBC or any other locally incorporated company.