BVI Ready Made Shelf Companies and Company Formation

BVI – British Virgin Islands

British Virgin Islands is British overseas territory encompassing 36 islands and cays situated in the Caribbean Basin. They are a part of the Virgin Islands Archipelago, which also include Spanish Virgin Islands and US Virgin Islands. The area of BVI is 154 km2 and 11 of the islands are uninhabited. The official language is English and the official currency is US dollar.

British Virgin Islands remain under the jurisdiction of the United Kingdom, but they do not constitute an integral part of the country. The country is not subject to the British Crown in terms of fiscal policy.

BVI is one of the oldest offshore jurisdictions, with the brand of a financial centre where business model is immensely attractive for foreign investors. As much as 40% of offshore investments is located right here, and several thousand new companies are created each month. It is here that the biggest companies run their businesses, and this is not only due to an attractive fiscal system but also outstanding political stability and good reputation on the international arena the country enjoys, unlike many other offshore jurisdictions.

BVI have a stable judicial system based on the British law, where all legal regulations concerning the economy are developed in cooperation with the private sector. The offshore services sector plays a key role in the country’s GDP, that is why developing the sector is both in the interest of the government and the public.

The first legal act regarding companies in BVI was the Companies Act of 1884, while the activity of international businesses got regulated in 1984 (International Business Companies Act, 1984) and was subsequently amended. From the beginning, the lawmaker promoted offshore solutions which were to contribute to the country’s economic development as the USA waived the double taxation act which had been affecting the two countries. The solutions turned out to be so attractive, they drew investors from all over the world.

The biggest advantage of a Business Company (BC) is its flexible structure, which may be designed in accordance with the investor’s needs, depending on the activity the company will engage in.

To establish a company, you need only one director and one shareholder; they may be a legal as well as a physical person. There are no restrictions regarding non-residents or foreign companies, and the director and the shareholder may be the same person.

In Business Companies, there is no share capital or authorised capital in the classic sense. According to BVI Companies Act, the Memorandum and Articles of Association stipulate the maximum number of shares the company is authorised to issue. There is no obligation to state the nominal price of shares or their currency, but there may be a situation the clients will request such information. All companies must specify the class of the shares they are authorised to issue, and if the company is authorised to issue two or three classes of shares – the rights, privileges, restrictions and terms assigned to each share.

Shares may be with or without par value. Registered shares as well bearer shares are accepted, however, bearer shares may not be issued to the beneficiary owner. Shares of this type must be kept in custody of a licenced custodian, together with a written indication as to the actual identity and address of the owner of the shares. It should to be stressed that government fees are much higher in case of bearer shares.

There is no obligation to include information on the company’s operational goals in the Memorandum and Articles of Association, but it is possible do include it if the owner wishes so. Business Companies Act of 2015 provides a special business structure: restricted purpose company.

Business Companies (BCs) have to be registered in the territory of BVI with the assistance of a licenced agent. An unusual solution is the fact that newly-formed companies do not issue subscription shares. The agent who registered the company has the statutory right to appoint its first directors who then may receive subscriptions and issue shares. Up until the first company shares are issued, the presidents are personally liable for all activity they perform on behalf of the company.

In the territory of BVI exists a company name registration system and evert newly-formed company needs to have a unique name. The names may be in any language, including Chinese.

BC companies do not have to submit annual financial statements. There is an obligation to keep accounting books, but only on a very basic level, that should demonstrate the current financial situation of a company, and registers that show the relevance of company transactions. The information is not subject to audit and is not public.

International companies registered in the territory of British Virgin Islands are not subject to taxation, including personal income taxation. Business Companies (BCs) are exempt from income tax, dividend tax, and earnings from rents, compensations, bids and other benefits generated by the company. Moreover, there is no capital gains tax on trade in company shares or other securities. BCs are also exempt from stamp duty.

There is also no tax on inheritance, donations or real estate.

In place of taxes, there is a fixed annual licence fee in the amount of 350 USD (on condition the authorised capital does not exceed 50 000 USD and all company shares have par value and pursuant to the Memorandum and Articles of Association the company does not issue bearer shares).

BVI is one of the most developed economies in Central America where the standard of living is high. The foundation of its economy is the financial services sector, with tourism taking the second place. Services for companies that are registered here generates more than half of the revenue of this overseas territory and are of the highest standard.

The local industry produces mainly food products, such as sugar, rum and fish preparations, which constitute the main source of export, as well as electricity.

The official currency is US dollar, therefore there is no government control over the currency by default and it is impossible to manipulate the supply of money, resulting in friendly and quiet conditions for running a business.

British Virgin Islands is an independent overseas territory of the United Kingdom, where the head of state is the British Queen and the power on her behalf is exercised by the Governor. BVI remains under the control and constant subjection to the United Kingdom, but is not an integral part of the UK. BVI cannot make independent decision regarding national security and foreign policy.

BVI politics exists within the parliamentary system with a multi-party system, and the head of the government is the Premier. The judiciary is independent from the executive and legislature. The legal system is based on the British common law.

BVI constitution was established in 1971 and was successively; the present constitution is from 2007.

The political system of BVI is stable and the country is not entailed in any external conflicts.

BVI banking sector is governed by Banks and Trusts Act of 1990 and consists of a small number of international banks, such as Scotiabank, VP Bank, Banco Popular de Puerto Ricco, First Bank Virgin Islands, London International Bank and Trust Company Ltd, National Bank of the Virgin Islands Ltd, The Bank of East Asia Ltd, Rathbone Bank.

Any client information kept by the banks is fully protected and there are financial as well as imprisonment penalties for disclosing it, so confidentiality is the golden rule of BVI banking. BVI law prohibits banks to release any client information as long as there is no court order issued.