A. Why Form a Company in the British Virgin Islands (BVI)

The British Virgin Islands (BVI) is one of the oldest offshore centers which is managed by the International Business Companies Act 1984. Most other offshore jurisdictions have also followed this same Act. In 2005, a new version of the British Virgin Islands (BVI) Companies Act was adopted, implementing more improvements within the British Virgin Islands (BVI) offshore corporate legislation.

It is an extremely favourable choice for many as a BVI company formation is easy to operate, maintain and control. All business can be conducted internationally. It has a straightforward company structure with only one Shareholder and single directorships required. Another great feature is that the Shareholder and Director Meetings are not restricted within the British Virgin Islands. Books of accounts, records, and minutes do not need to be obtained within the BVI, they can be maintained elsewhere at a location of your choice. There is no statutory requirement to hold annual general meetings. The British Virgin Islands also offer minimum reporting, there are no audits, no tax reports, and no financial information is shown on public records. All shareholder details are also kept private and not shown on the public records.

The key features of a BVI Company Registration are: 

• Company Incorporated within 48 hours (subject to compliance review)
• Only 1 director and 1 shareholder are required in a BVI Company Formation, the director and shareholder can be the same person
• You do not need to be resident in BVI to be a director or shareholder
• A BVI Company Registration can be set up with no personal visit required
• No annual accounting requirements
• Business can be conducted internationally
• Exemption from all local taxes and stamp duty
• Only 1 yearly renewal fee is required for a BVI company

B. What is Registered Agent?

The registered agent holds a license issued by the British Virgin Islands government and is a representative of the British Virgin Islands government to accept the application for the incorporation of an offshore company. In addition, the registered agent also has the right to issue specific documents to prove the company’s current status and shareholding structure, such as Certificate of Incumbency. 

C. What is Economic Substance of British Virgin Islands?

With effect from 1 January 2019, a new legislation titled the Economic Substance (Companies and Limited Partnerships) Act was introduced in the BVI. This new legislation introduces economic substance requirements that are applicable to all “legal entities” carrying on “relevant activities”, unless they can demonstrate that they are residents for tax purposes in a jurisdiction outside the BVI. BVI company is required to submit economic substance annually through their registered agent to declare whether it has carried out relevant activities.

Relevant Activities include:

• Banking Business
• Insurance Business
• Shipping Business
• Fund Management Business
• Financing and leasing Business
• Headquarter Business
• Distribution and Service Centre Business
• Intellectual Property Business

Existing companies and limited partnerships, which are established before 1 January 2019, must comply with the economic substance requirements by 30 June 2019. They have to fulfill the reporting obligation within 6 months of the end of their first financial year, but no later than 30 June 2020, and report annually thereafter.

New companies and limited partnerships, which are established on or after 1 January 2019, must also comply with the economic substance requirements immediately. They have to fulfill the reporting obligation within 6 months after the end of the first year (or financial year) and report annually thereafter.

D. Requirement for Company Name

When choosing a company name for a BVI company formation, you must ensure that all words within the name are in English. The name must end with a word, phrase or abbreviation that indicates limited liability, such as Limited (LTD), Corporation (CORP), Incorporated (INC) or Societe Anonyme (S.A.). 

E. Directors, Shareholders and Secretary

For a standard BVI company formation, a minimum of one director and one shareholder is required, however, they do not need to reside in the British Virgin Islands and they can be corporate bodies. What makes this destination so popular is an individual director is not required. You can also have a one-man company, meaning that the Director and Shareholder can be the same person.

Nominee Director and Shareholders are also permitted in a BVI company registration. 

F. Share Capital

The standard currency for a BVI Company formation is USD, and the standard authorised share capital is 50,000 shares worth 1USD each. If the shares exceed the standard 50,000 the Government fees will increase. This will affect the Incorporation and Yearly Renewal price. Please contact our office for more information. The shares within a BVI company may be divided into different share classes with different rights and conditions. The shares can also be issued with or without a value. Bearer shares may be issued, but only if the company constitution (articles of association) authorises this. 

G. Tax Information for your BVI Company Registration

A British Virgin Islands International Business Company is exempt from all local taxes, stamp duty, there is no capital gains, no inheritance tax, no sales tax and no VAT. If you are looking to maximise your profits, BVI could be a very good place for you to start your business. The BVI is one of the world’s most attractive financial jurisdictions.

A BVI company formation is exempt from any kind of stamp duty that relates to its assets or activities, excluding land-ownership transactions in the BVI, in this case stamp duty still remains payable. BVI Companies are not required to file tax returns or any other type reports to the BVI government regarding foreign income.