British virgin islands (BVI) company registration
The Virgin Islands in the Caribbean to the east of Puerto Rico is one of the prominent offshore regions. The country’s territory is formed by 16 inhabited islands (furthermore, there are 20 inhabitant islands). The largest and most famous is Tortola. The administrative center is Road Town. The former British colony gained independence from the British crown in 1967.
As a legacy of the monarchy, the Anglo-Saxon system of law, with English as the state language, has been preserved. The money is the US dollar. The jurisdiction is tax-free; non-native companies that operate outside the land pay no tax on income. The judiciary is independent, but the UK is liable for defense and foreign policy matters.
It is no coincidence that the land has a reputation for being offshore – more than 40% of the world’s offshore establishments are registered here. The provisions of The International Business Act regulate foreign corporations. It is very easy to open a firm – it only takes a few days.
BVI company registration is attractive in terms of taxation (0% for non-residents) and privacy. Also, the business is not mandated to keep accounting archives, which greatly simplifies the management of the company. There is no need to pay the authorized capital. Shareholders and beneficiaries can keep their privacy.
What is a business establishment in BVI?
Opening a new business here implies the entry of data into the British Virgin Islands company register. This is the official registry of all local and non-native firms. An extract from the record (Certificate) is the main paper of the organization.
BVI company formation procedure, in principle, is not much different from the incorporation procedures in other jurisdictions. You ought to come up with a unique name that captures the essence of the business or any unique title you like. Then this label, along with a box of papers, must be submitted to the state clerk.
All documents must be translated into English and certified by a notary. Registration can be performed remotely based on a power of attorney. A personal visit to the territory is not necessary. Typically, the customer authorizes a lawyer working on the islands to represent his interests before the governmental and taxation administrations.
Characteristics of the BVI corporate law
In 2014 the Commercial Companies Act was decreed, which regulates the business firm activities of firms enlisted in the islands. All lawful entities are recorded in the BVI registry.
The enterprise can be founded by any person, both a native of the homeland and an outsider. The establishment of a business by foreign legal entities is also allowed. Subsequently, you can re-register the enterprise to any other territorial dominion.
All types of activities that are permitted by other governments work well in the British Virgin Islands too. If you don’t need a license, you can open an enterprise in just a week. But sometimes you ought to get a license for certain activities. Check with Fintecharbor lawyers about the kinds of actions.
The legislation does not provide for a minimal authorized capital, so the founder can determine its size and deposit it into the enterprise’s account. As mentioned above, the income tax rate is zero. Therefore, all the money earned can be left for business development or disposed of at your discretion.
As for the founders and beneficiaries, complete confidentiality is guaranteed in this matter. Nevertheless, it is worth noting that the statute law is changing. The conditions for investors have been tightened recently. Now the beneficiary must supply bank reports with other banks. In addition, the authorities began to demand additional information about the founders (copies of legal documents and addresses).
Advantages of firm set up in the British Virgin Islands
Local enterprises have many advantages and are actively used for tax-optimization structures around the globe. In an era where banking secrecy and privacy are virtually over, business owners need to be able to protect their assets. This is especially true for people from countries with turbulent regimes. The government provides high confidentiality to business owners. There are no bilateral international documents on cooperation in the exchange of data.
Additionally, the country has a stable economy. And the official currency – the US dollar – protects your assets from depreciation. Foreign exchange control is not demanded, which means that dollars can be freely transformed into any currency.
Offshore units (non-residents who conduct business outside the territory) do not pay taxes, they do not need to undergo a yearly audit and submit any reports to the tax administrations. But this does not mean that you can not do bookkeeping at all. Primary documents (contracts and invoices) should still be in order. They must be stored for at least 5 years to the requirements of the Mutual legal assistance act (2012). Documents may be stored in paper or electronic form. The penalty for not keeping documents is rather big. The fine is USD 50,000.
A legal entity can be used for export, as a principal in compound agency schemes, for savings and investments, and the preservation of assets anywhere in the globe, as well as the transfer of acquisitions by inheritance.
Recent legal updates
In past years, several changes have been introduced to the civil law of the islands. For illustration, the BOSS system. Since 2017, the law has obliged state registrars to upload data on beneficiaries who own 25% of shares or more into a special secure registry. Access to the database is public, which means that competent bodies can search for information about beneficiaries if necessary.
In addition, businesses are now also required to comply with KYC (know your customer) under the Anti-Money Laundering Law. These procedures apply to all individuals who control more than 10% of the firm’s shares. It will not work to hide the beneficiary. By law, data on any natural or legal person who has become the beneficial owner must be submitted no later than 15 days after the appointment.
In recent years, substance requirements have extended to tax-free and offshore jurisdictions. This is a requirement of real presence in the territory of registration. The goal of this event is to counter tax abuse and recognize organizations that violate double taxation treaties and do not pay taxes in any country. Substance rules prescribe having a real office with local employees (director and secretary) in the land where the firm is registered. At the BVI, these directions came into power on Jan. 1, 2019.
It is worth commenting that these increased substance requirements do not apply to all types of activities but only to some, including finance, insurance, banking services, and shipping. Also, if you plan to establish a holding or a fund manager, you will have to comply with these rules and open a real office on the isles.
If you are interested in the BVI company set up, you should study the most current information and new legislation carefully.
Bilateral doubled tax agreements
The Virgin Islands ratified a double tax pact with the UK, Switzerland, and Japan. In 2009 the country also entered into bilateral information exchange with seven states — Denmark, Norway, the Faroe Islands, Greenland, the Republic of Finland, Sweden, and Iceland.
At present moment, the state has one double tax contract with the Swiss Confederation and 22 data interchange contracts with different lands: Australia, India, the UK, Canada, the People’s Republic of China, the United States of America, the Faroe Islands, and Japan. Furthermore, there are agreements with several EU member countries (Sweden, Norway, Germany, The Netherlands, Island of Guernsey, Greenland, Kingdom of Denmark, Republic of Iceland, Ireland, Netherlands Attila, Republic of Poland, Finland, French, and Czech Republic).
How do we register your business in BVI?
We set up a company in the British Virgin Islands under all the provisions of the current civil law. At the first consultation, our lawyers will study your corporation requests and recommend the appropriate jurisdiction and statutory form of the firm that best suits your goals.
After we make sure that both parties understand the objectives and further plan of action, we will start collecting documents. In the beginning, we will help you come up with or choose a unique establishment name. We will also ask for information about the director or directors and all stockholders. At the request of the law, these data must be submitted to the state register.
Our lawyers will draw up the Memorandum of Association, which will describe how the shares in the authorized capital are distributed among the shareholders. We will help you translate all documents into English and carry out a notarization.
After the package of papers is formed, we will submit the necessary applications to the state clerk and in a few working days, you will have all the certificates confirming the ownership of the enterprise in your hands.
Although the registration procedure is standard, it is necessary to consult with lawyers to ensure that all documents are completed correctly. Then all applications will be approved the first time, and you will not have to send them again and pay state fees.
Many service providers on the Internet can set up a BVI company. Unfortunately, we had a negative experience of cooperation with some agents. We contacted Fintecharbor and did not regret it. The lawyers are very competent and efficient, and I highly recommend them.
I registered a holding enterprise to protect my international business from raider takeovers and dishonest actions by competitors. Fintecharbor consultants prepared all the necessary documents very quickly and were ready to advise me on all issues.
We are very pleased with the cooperation with this company. We were looking for a suitable jurisdiction to open an international business. We were recommended a BVI and explained all the advantages and features of working with this jurisdiction. Our management team received comprehensive information before making a decision.
I would like to thank Fintecharcbor lawyers and tax advisors for detailed and clear advice on such sensitive and confidential issues as tax optimization and registration of a holding. We received high-quality legal support for an adequate price. In the future, we will work only with this law firm.
Earlier on the islands, it was achievable to set up the type of business – IBC (International Business Company). But in 2019, there have been changes. And now the sort of business is BC (Business Company). The difference between them is that IBC is a purely offshore organization that could only operate outside the country. And now you can register a BC – a firm that has the right to carry out commercial actions not only outside the territory but also within it. The firm name in the BVI corporate registry must end in Ltd, Corp, Inc, Limited, S.A., and derivatives from these words (for example, Corp = Corporation = CORP, etc.).
BCs in the Virgin Islands are tax-free despite the origin of revenue. The sole taxation that subsists is payroll tax for institutions hiring regional workers: the present rate is 8%, and salaries lower than $10,000 are tax-exempt. The BVI establishment has to bear a yearly contribution to the state based on the maximal volume of stakes and the particular date of registration of the firm. For companies with a share capital of up to $50,000 – $350 per twelvemonth. For firms with shares worth surpassing $50,000, the taxation tariff is $1,100. There is another tax on realty dealings – a stamp duty. It is set at a rate of 12% for foreign-born nationals and for inhabitants of the country – 4%.
The assistance on enlisting a new firm in the Virgin Islands consists of the registration of the institution itself, payment of the administration signup fee, the services of a regional vendor, the provision of a legal address, and DHL delivery of papers anywhere in the globe. The fee of registering a business depend on every specific case. Please note that this fee does not contain translation of papers into English and apostille. Also, obtaining licenses for certain sorts of activities is a different service that is supplied for a separate fee. Opening a bank account is also an additional service that is not included in the cost of the establishment.
In most chances, the BVI offshore company formation takes up to five days. It also takes about 10-14 days to prepare the documents. Express delivery of papers using DHL takes 2-3 days. If you need to obtain specific licenses for banking or insurance activities, it will take a little longer. A separate period for opening a corporate bank account. Depending on the chosen jurisdiction and bank, the terms can differ, starting from one month to several months. It all depends on how strict the due diligence requirements are in a particular bank. But you can also buy a ready-made enterprise if you urgently need to get a new legal entity. You can buy a ready-made firm in 1-5 days.
The provisions for a new firm are not much dissimilar from other countries. Both a citizen of the state and a foreign resident can register an enterprise. A legal entity can also be a founder. By jurisprudence, you will ought to provide personal information about the creators and stockholders. It is worth considering that new rules for economic presence have been in power in the land since 2019. Now for particular sorts of activities, you need to keep a registered business office on the islands. Looking for BVI enterprise registration? Visit our website to set up a firm in the Virgin Islands. We keep our finger on the pulse of updates in lawmaking and act exclusively in the lawful field. We will help you collect a complete package of documents for quick setup of your business. Our team of consultants will be happy to advise you on all issues regarding the choice of the optimal jurisdiction, the statutory form of the enterprise, and the tax regime. By contacting the lawyers of our firm, you will receive competent advice.