International Trade – Case Studies
Using the British Virgin Islands for International Trade
The British Virgin Islands (BVI) stands as one of the leading offshore jurisdictions globally. Companies incorporated in the BVI are widely employed for international trade, property holding, personal service companies, and asset holding entities. They are recognised for their exceptional flexibility as corporate entities. The jurisdiction itself operates under a British-style legal system, embraces common law legislation, and boasts a strong reputation for professionalism and trustworthiness.
The most commonly utilised corporate entity is the Business Company (BC), which can engage in global trade and banking while maintaining a tax-exempt status. BCs are not obligated to file annual accounts with authorities and pay a fixed Annual License Fee to the BVI Government, ranging from US$550 to US$1,350 (depending on share capital structure) per annum. Nevertheless, TBA advises all companies to prepare annual accounts to adhere to good corporate governance practices.
For those interested in cryptocurrency, please refer to our British Virgin Islands cryptocurrency company page.
The BVI Business Company (BC) Advantages
- Low startup costs and minimal annual maintenance.
- Outstanding reputation and credibility.
- Adaptable company legislation.
- Minimal reporting requirement
- A British-style legal syste
- Professional business environment
- Presence of world-class financial institutions based in the BV
- Highly qualified, well-educated, and multilingual workforce.
- Democratic country with a free market economy.
- Freedom of movement of foreign currency.
- Political stability.
- Efficient legal, accounting, and banking services.
- No capitalisation requirements for companies.
Operational International Trade BVI
Mr. Hassan resides in UAE, Dubai, and seeks a corporate entity to invest in the UK property market and invoice clients in various Middle Eastern countries for his consultancy work in the oil industry. He also desires the flexibility of a Common Law jurisdiction.
TBA establishes a company in the BVI for Mr. Hassan and facilitates banking arrangements with a prominent world bank in London. Mr. Hassan is appointed as the sole Director and Shareholder of the company and secures financing, with TBA’s assistance, for the purchase of a £1,000,000.00 property in Kensington.
The BVI Company becomes the registered owner of the property and registers itself under the Non-Residents Landlord Scheme, as the property is to be rented out to cover the financing payments. The BVI Company can also claim UK tax relief on the loan interest to offset potential rental income profits.
Two years later, Mr. Hassan decides to sell the property due to the robust growth in the UK housing market. The property is sold for £1,500,000.00, realising a capital gain of £500,000.00. This gain is not subject to UK tax since the property is owned by a BVI Company, and the funds can be held with the London bank for further use or reinvestment.
Throughout this period, Mr. Hassan has been providing consultancy services to major oil and petroleum companies in the Middle East, which require invoices from a registered corporate entity. Mr. Hassan invoices them monthly through his BVI Company and receives the funds directly into his London-based bank account, free from taxation. Additionally, Mr. Hassan benefits from the limited liability provided by a BVI Company, reducing the risk of litigation. He can access his accumulated funds anywhere globally by utilising his internet-accessible bank account and a globally accepted bank card.
Mr. Hassan has successfully realised a capital gain on the property and eliminated potential tax burdens on UK rental income. He has also leveraged a renowned London-based bank for property financing. His consultancy services have been conducted through an efficient corporate entity that can invoice clients globally and transfer fees to the London-based bank account. He has safeguarded himself against potential litigation and can utilise the BVI Company in various countries.
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Disclaimer: While TBA & Associates strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact TBA Customer Services for advice on your specific cases.