Why You Should Consider Registering a Company in the British Virgin Islands

The British Virgin Islands (BVI) is an archipelago made up of 36 islands and cays, located northeast of the U.S. Virgin Islands. Only 16 of these islands are inhabited. The total area of the British Virgin Islands is 153 square kilometers.

Tortola is the largest and most populated island, home to around 16,000 residents. The capital of the BVI, Road Town, is also situated on Tortola. In total, about 25,000 people live across all the islands, with around 90% of them residing on Tortola.

Christopher Columbus discovered the British Virgin Islands, and legend has it he was so taken by their beauty that he named them “Las Virgenes” in honor of Saint Ursula and her 11,000 virgins.

The BVI boasts one of the most advanced legislative systems, actively promoting the growth of offshore businesses. The BVI Business Companies Act, enacted on January 1, 2005, replaced the previous Companies Act known as Cap.285 and the International Business Companies Act of 1984. Under this law, offshore companies face minimal requirements while enjoying significant benefits, including complete confidentiality and tax exemption.

Some jurisdictions are adopting laws similar to those of the BVI to compete in the international financial market. However, the BVI maintains its leadership in this arena due to the flexibility of its legislation, the quality of its financial services, confidentiality, and the country’s political stability.

Benefits of registering a company in the BVI jurisdiction

Thanks to its progressive offshore legislation, the BVI has become one of the leading offshore jurisdictions, with over 650,000 companies registered there in recent years. A record 64,000 new companies were registered in 2000 alone.

A company registered in the BVI enjoys a host of competitive advantages, such as:

• Asset security: Protecting assets from third parties, with the option to transfer assets to another country or legal entity, including trusts, funds, associations, or partnerships.
• Exemption from local taxes and government fees (except for registration and annual license/franchise fees).
• Maximum confidentiality.
• Both bearer shares and registered shares are possible. Registered shares can be held by the company itself, while bearer shares must be kept by a licensed custodian under new rules.
• Share registers are accessible only to registered shareholders (bearer shares remain completely anonymous).
• There are no requirements for submitting financial and other annual reports to the BVI authorities, though the company must keep and store documents reflecting its financial status. These documents must be provided upon request by the Department of Financial Services. Failing to comply can result in a fine of $10,000.
• Only one director is required, who can be an individual or a legal entity.
• No minimum share capital is required.
• Directors can retain assets by transferring company shares to trust owners, other companies, or other legal entities.
• Flexible naming requirements for offshore companies. The company name can be in any language and must include terms like Limited, Incorporated, Corporation, Sociedad Anonima, Société Anonyme, their equivalents, or abbreviations.
• Low government fees and charges.

Requirements for International Business Companies in the BVI

The requirements for foreign companies registered in the BVI are quite lenient. Here are the main ones:

1. Only one director or shareholder is needed for registration.
2. The director and shareholder can be the same person.
3. Both individuals and legal entities can serve as directors and shareholders.
4. No local directors or shareholders are required.
5. There are no residency requirements for the secretary.

Confidentiality regarding beneficiaries

The registration documents for companies in the BVI do not disclose the names of shareholders or directors. However, the law mandates that companies maintain registers of directors and shareholders, which must be kept by the registered agent. Failure to comply can lead to fines of up to $10,000.

Nominee service

If you need complete confidentiality regarding the true owners of a company or wish to obscure your involvement, you can use nominee services. When you order such a service, the name of the nominee director will appear in the Register of Companies instead of yours. Nevertheless, the true owner can manage the company through a General Power of Attorney from the nominee directors.

Share and capital requirements

• Shares can be issued with or without a par value.
• Shares can be issued in any established currency or multiple currencies.
• Shares can be paid in cash or through the transfer of other assets or as remuneration for obligations.
• The recommended share capital is $50,000 (equivalent in any freely convertible currency is acceptable).
• Issuing bearer shares is allowed. The new law defines a “bearer share” as one represented by a certificate stating that the certificate holder is the owner of the share. All bearer shares must be held by a licensed custodian. The annual government fee for companies issuing bearer shares is now $1,100.

The minimum contribution and issued share capital can be one fully paid share.

Maintaining company records and archives

There’s no requirement to submit accounting reports, but companies must keep financial records that reflect their transactions sufficiently to explain their operations if needed.

Conducting meetings of shareholders and directors

• Minutes of meetings and resolutions of directors and shareholders must be kept by the registered agent or at another location (either within or outside the BVI) designated by the director.
• Board meetings can take place anywhere in the world and can be called by any director.
• Shareholder meetings are held only at the request of the board of directors or by shareholders holding more than 50% of the voting shares.

Restrictions on doing business for offshore companies in the BVI

It’s essential to be aware of some limitations that offshore companies registered in the BVI must contend with.

Conducting business with BVI residents and companies

To benefit from tax exemptions, a company must not conduct business with BVI residents (individuals and companies). However, such companies are permitted to operate in the BVI if:

• The company interacts with legal consultants, attorneys, accountants, trust companies, management or secretarial firms, investment consultants, or other similar individuals or organizations doing business in the BVI.
• The company keeps all necessary records and registers in the BVI (if it chooses to maintain such documentation).
• Meetings of the company’s directors or members are held in the BVI.
• The company rents office space for communication with its employees or where company records and logs are kept.
• The company holds debt securities, shares, or other securities in a BVI International Business Company or any other locally registered BVI company.
• Shares, debt securities, or other securities of the company are owned by any individual resident in the BVI or any BVI International Business Company or any other locally registered company.

Restrictions for commercial companies on doing business outside the BVI

There are no restrictions for BVI companies on conducting legal business or any investment activities, except for banking, insurance, or credit activities, which require special licenses.

If you’re looking to register a company in the British Virgin Islands, reach out to professionals for assistance!