British Virgin Islands Offshore Companies

The BVI are very close to the top of the world's leading offshore jurisdictions in terms of companies incorporated, a resounding success for their company and other offshore legislation.

International Business Companies (IBCs) are companies incorporated in the British Virgin Islands (BVI) under the International Business Companies Act whose business is to be conducted outside the BVI, and which may not do business with any person resident in the BVI.

BVI IBCs are a very popular and widely used offshore companies because of their administrative ease, flexibility, taxation exempt status and the fact that they are widely accepted and understood by the international financial community.

BVI IBCs may not own real property in the BVI, other than the lease of an office, and may not carry on banking or trust business (unless licensed under the Banks and Trust Companies Act, 1990) or insurance or re-insurance business (unless licensed in the BVI to carry on that business). Otherwise, BVI IBCs may engage in any activity that is not illegal under the laws of the BVI subject to any restrictions in their Memorandum of Association.

The BVI has an independent legal and judicial system based on English Common Law, with a right of final appeal to the Privy Council in London. Policies and legislation are developed in close consultation with the private sector. Offshore business can be carried out in a tax-free environment.

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Key Corporate Features

BVI General Information

The British Virgin Islands is located in the Eastern Caribbean approximately 60 miles to the east of Puerto Rico. World renowned for its first class white beaches, water sports and engaging and friendly population, the BVI offers unequalled international financial services and other investment opportunities for business people all round the world.

First inhabited by Arawak and later by Carib Indians, the Virgin Islands were settled by the Dutch in 1648 and then annexed by the English in 1672. The islands were part of the British colony of the Leeward Islands from 1872-1960; they were granted autonomy in 1967. The economy is closely tied to the larger and more populous US Virgin Islands to the west; the US dollar is the legal currency.

The British Virgin Islands consist of 60 islands and cays having a total land area of 150 sq km. The BVI lies lie to the north west of the United States Virgin Islands and are separated from them by a channel only five kilometres width. The neighbour with the largest land area is Puerto Rico, 96 km to the west.

The largest and most heavily populated Island is Tortola, which has about 16,000 inhabitants. The capital, Road Town, is on the southern shore near Sir Francis Drake Channel. In 1672, Britain claimed Tortola. Simultaneously, Denmark asserted her sovereignty over St. Thomas and St. John; then in 1773 Denmark purchased St. Croix from France. The Danish Islands were sold to the United States in 1917 for US$ 25 million.

Relations between the United States and British Virgin Islands are good. The British Virgin Islands is an internally self-governing colony with a ministerial system of Government operating under a Constitution adopted in 1967. The Governor, appointed by the Crown, remains responsible for defence and internal security, external affairs, the civil service, the administration of the courts and finance.

The economy, one of the most prosperous in the Caribbean area, is highly dependent on the tourist industry, which generates about 21% of the national income. In 1985, the Government offered offshore registration to companies wishing to incorporate in the Islands.

The official and spoken language is English. The currency is the US Dollar. There is no exchange control. The type of law is Common Law, based on English Common Law with local modifications and local statutes. The principal corporate legislation is The Companies Act (Cap. 285) and The International Business Companies Act (Cap. 291).

BVI Company Information

There are two types of companies incorporated in the BVI. They are either incorporated under the International Business Companies Act or the BVI Companies Act. The BVI is a leading international corporate domicile offering competitive adminstration costs, tax exemption for International Business Companies, no capital gains, gift or wealth taxes and no death duties, no exchange controls, an established trust law, excellent communication worldwide and a minimum of bureaucracy.

The procedure to incorporate is: submission of the Memorandum and Articles of Association and a certificate from the Registered Agent confirming compliance with the requirements of the ordinance.

BVI IBCs cannot trade within the British Virgin Islands or own real estate there. They cannot undertake the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes, trust management, trusteeship, the rendering of investment advice or any other activity that would suggest an association with the banking or insurance industries. An IBC cannot offer its shares for sale to the public. A company incorporated in the British Virgin Islands has the same powers as a natural person.

The language of legislation and corporate documents is English. Shelf companies are available. The minimum time to incorporate: three days. Language of Name Latin Alphabet. Any name in a language other than English must be accompanied by a translation to ensure that the name is not restricted.

A registered office must be maintained in the British Virgin Islands, and must be maintained at the office of a licensed management company.

The following names require consent or licence: bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, university, municipal or their foreign language equivalents.

There is no disclosure of beneficial ownership to Government Authorities.

BVI Compliance

The normal authorised share capital is US$ 50.000 of a BVI IBC with all of the shares having a par value, this being the maximum share capital for the minimum duty payable upon incorporation and annually thereafter. The share capital may be expressed in any currency. The minimum issued capital is one share which is fully paid up

The following classes of shares are permitted: registered shares, bearer shares, shares of no par value, preference shares, redeemable shares and shares with or without voting rights.

An International Business Company does not pay any tax on its world-wide profits to the British Virgin Islands authorities. The British Virgin Islands has double taxation agreements with Japan and Switzerland, although they have limited benefit and are not applicable to offshore business.

Companies with an authorised capital up to US$ 50.000 pay a licence fee of US$ 300 per year. Companies with a share capital more than US$ 50.000 pay the sum of US$ 1.000 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$ 350 per year.

While there is no requirement to file audited accounts with the authorities in the BVI, a company is required to keep financial records, which must reflect the financial position of a company.

BVI company's need only a single director. They may be natural persons or bodies corporate. They may be of any nationality and need not reside in the British Virgin Islands. A company secretary may be appointed. The company secretary may be a natural person or a body corporate. They can be of any nationality and need not reside in the British Virgin Islands. The minimum number of shareholders is one.

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