BVI Offshore Company Formation
Nominee services can also be provided.
BVI COMPANIES - BVI COMPANY FORMATION
BVI IBC or BVI International Business Company is a discrete business entity that is exempted from tax regulations, ideal for many situations that deal with international business activities, allows for a more lenient organizational structure, has less requirements as far as record keeping as well as reporting is concerned, and also offers much more confidentiality. BVI IBC or BVI International Business Company is the same as what is typically referred to as an “offshore company”.
Ever since the introduction of the BVI IBC, or British Virgin Islands International Business Companies Ordinance in the year of 1984, the BVI IBC has become an ideal offshore investing opportunity. Currently there are more than 550,000 incorporations as well as over 5,000 new companies that are registering each month. This makes the BVI one of the most prevalent offshore jurisdictions available.
BVI COMPANY TAXES
Each company that is incorporated within the BVI or is managed within the BVI is treated in such as a resident. Therefore these companies are taxed as per the British Virgin Islands Income Tax Act, but the BVI Business Companies Act 2004 allows for a full exemption from these requirements for: All BVI business companies, dividend, interest, royalties, compensation, capital gains as well as debt obligations.
The Business Companies Act states that no estate, inheritance, gift tax rate, levy, duty or other charge is able to be paid with any shares, debt obligations or assets of a business company. These companies are also exempt from stamp duty unless in the state where the instrument may pertain to the transfer of an interest in land in the BVI or the transfer of securities of a land possessing business.
At the start of January 1st 2005, the BVI have taken on a zero-rated income tax command that pertains to all commercial entities. These commercial entities will be required to pay a starting registration fee as well as a yearly license fee that will be paid to the Financial Services Commission. The registration fee and the yearly fee is $350 or $1,100 if the company in question has authorized the issuance of anything over 50,000 shares.
Restricted purpose companies will be required to pay an initial registration fee of $5,000.
There are no branch profit taxes, capital gains taxes or sales taxes that are required to be paid. Stamped duty is enforced whenever there is the transfer of real estate as well as the transfer of shares within a BVI business that owns real estate within the BVI. This rate of stamp duty is 4% for belongers or 12% for non belongers. Any other stamp duty transfers will range from 0.2% to 5%.
BVI COMPANIES WILL NOT BE SUBJECTED TO
- Income Tax;
- Capital Gain Taxes;
- Inheritance Tax;
- Gift Tax;
- Double Tax Arrangements due to Foreign Tax Relief;
- Corporate Group Taxes;
- Transfer Pricing;
- Value Added or Sales Taxes;
- Branch Profit Tax;
- Withholding Tax on Interest, Dividends or Royalties paid by BVI Business Companies, (subject to the below).
Currently there are no withholding taxes on dividends, royalties or interest when pertaining to BVI companies. The BVI has ratified the EU Savings Directive since the first of July 2005. A withholding tax is enforced to interest payments to natural people who reside within the EU. This withholding tax is not required as the investor/depositor is able to avoid the tax by giving information pertaining to their account to authorities of their home country.
The primary legal tender within the BVI is USD. There aren’t any exchange control restrictions between transactions of USD funds in or out of the BVI or on their conversion to different currency.
For companies with registered shares only:
- Companies with registered authorized shares up to $50,000 are required to pay an annual fee of USD 350, and
- Companies with registered authorized shares of anything over $51,000 are required to pay an annual fee of USD 1,100.
- For companies with bearer shares, or with the right to issue bearer shares:
- For Company with up to 50,000 shares, if all bearer shares are kept with a BVI Custodian - USD 800;
- For Company with more than 50,000 shares, if all bearer shares are kept with a BVI Custodian - USD 1100;
- For Company with up to 50,000 shares, if some of the bearer shares are not kept with a BVI Custodian - USD 1100;
- For Company with more than 50,000 shares, if some of the bearer shares are not kept with a BVI Custodian - USD 1350.
CONFIDENTIALITY AND PRIVACY
Privacy is a big perk of BVI companies and it is a vital reason of obtaining an offshore company within the British Virgin Islands. The BVI IBCO has many requirements in place that are set out to protect your privacy and confidentiality.
Some of the primary features of BVI companies when pertaining to privacy are:
- Register of Members, Directors and Minutes and Resolutions by the Company are held with the Registered Agent within confidential due diligence and they are not kept as public records.
- Information pertaining to shareholders is required to be kept on file with a Registered Agent and they are kept confidential as they are only able to be accessed by members within the company.
- All information pertaining to the company owners, shareholders as well as directors are kept private and away from the public availability.
- The Memorandum and Articles of Association are the only public records available and these types of documents do not hold any detailed information that pertains to the owners.
- Owners of an IBC company have the ability to utilize Company Management services that will provide added protection to keep the owner away from association of the given company. These services can also be utilized to add deeper levels of privacy if requested.
BVI KEY BENEFITS
Here are some of the advantages of BVI companies:
- Cost effective maintenance and incorporation;
- Secure and stable jurisdiction;
- Thoroughly understood and respected method of financial upkeep within the business community;
- Simplistic incorporation as well as administration requirements;
- Zero minimum share requirements;
- High levels of privacy and confidentiality for shareholders;
- Just one shareholder as well as director is required and there are no restrictions on residency of such holders;
- Absence of required annual meetings;
- Both individuals as well as corporate entities can serve as directors as well as shareholders;
- Ability to change director and shareholders without registration;
- Competitive tax rates and exemption from many taxes;
- Business activities that are outside the BVI are still tax exempt;
- Exemption from income tax on dividends, royalties as well as interests;
- No allowance of foreign exchange controls;
- No requirements for creating company accounts and annual returns;
- Ability to open corporate bank account without being present;
- Shares can be denominated in every currency and business transactions have the ability to be made within any currency of choice;
- Bearer shares are allowed.
BVI CORPORATE AND LEGAL FEATURES
- There are no requirements for multiple directors.
- Ability to have corporate entities as directors.
- No requirement of a local director.
- Meeting places of directors have no requirements.
- Voters have the ability to vote by substitution.
- Directors have the ability to attend meetings via an electronic device rather than in person.
- Only one shareholder is needed;
- Shareholders are not required to be BVI residents;
- Shareholder meetings have no requirements on the location;
- Shareholders have the ability to attend meetings either electronically or over by telephone;
- Shareholders are able to vote by substitution;
- It is required that the copy of the Register of Members be held at the Registered Office and that any changes made to the Register are sent to the office before 15 days of said change;
- No AGM requirement.
Underlying Company Owners
- Information of beneficial company owners not publicly available.
- Beneficial owners have the option to hand over shares to be kept by a trustee.
Although a company secretary isn’t a requirement, they are typically chosen in order to assist with the signing process.
It is a requirement that an imprint of a Company Seal is kept at the Registered Office and if this requirement is not met there is the possibility of a $10,000 fine. In the case that the Minute Books are not held at the Registered Office, it is required that the address at which these books are kept is provided.
The standard share capital is $50,000 as all of the shares have a par value; this is the maximum allowed share capital for the least duty owed upon incorporation and also annually subsequently. This share capital can be expressed in whichever currency. The minimum issued share capital is a single share of no nominal value or one share of nominal value.
Permitted Share Classes
- Registered shares;
- Shares with no par value;
- Preference shares;
- Redeemable preference shares;
- Shares without or with voting rights.
BVI companies have the ability to issue shares in the form of a bearer. These shares are not permitted to be transferred to the actual owner, but they are able to be kept in the possession of a licensed custodian within or outside the BVI. These shares must be kept with a written indication that states the identity as well as address of the actual share owners. Government fees for these types of shares will be higher than that of traditional types. Oxford can provide custodian services.
Names that are the same or similar to that of a company currently residing within the BVI may not be registered. Registering a name that is reserved within the BVI’s name-reservation system is also disallowed. Unless you have attained permission to do so, the usage of certain words is not allowed. Words such as: “Bank”, “Building Society”, “Chamber of Commerce”, "Chartered", "Cooperative", "Imperial", "Municipal", "Royal", "Trust” and any other word that has a similar meaning or suggests the same meaning is not permitted. Offensive names and any other name may be disallowed if the Registrar deems it unsuitable.
There are no requirements pertaining to filing accounts with authorities, but it is a requirement that holders keep proper financial records that state the financial information of their company.
For more information about BVI companies & BVI company formation please download our FACT SHEET No.23 BRITISH VIRGIN ISLAND (BVI) COMPANIES.