Advantages to incorporate in British Virgin Islands
Offshore incorporation services – BVI Business Companies (BC)
BVI Business Company (BC) is the most commonly used official name for what is more popularly known as an “offshore company”. BC’s are the basic building blocks of the offshore financial services industry.
The BVI Business Company (BC), commonly referred to as a “BVI offshore company,” is a fundamental element of the offshore financial services sector. In essence, a modern Business Company (BC) is a privately held corporation that enjoys tax exemptions, making it suitable for a wide range of international business activities. It offers flexibility in its organizational structure, imposes minimal reporting and record-keeping obligations, and upholds stringent confidentiality provisions.
BVI BCs are highly favored and extensively utilized in offshore finance due to their administrative simplicity, flexibility, tax-exempt status, and recognition within the international financial community. It’s important to note that BVI BCs are restricted from owning real property in the BVI, with the exception of leasing office space. Additionally, they cannot engage in banking, trust business (unless licensed under the Banks and Trust Companies Act, 1990), or insurance or reinsurance activities (unless licensed in the BVI for such purposes). Nevertheless, BVI BCs are permitted to participate in any legal activity not prohibited by BVI law, subject to the restrictions outlined in their Memorandum of Association.
BVI Business Company Advantages
- Currency Stability: The BVI utilizes the US dollar as its official currency, eliminating currency controls and government-driven manipulation of the money supply.
- Political Stability: As a British Overseas Territory, the BVI enjoys remarkable political stability and maintains a low international profile with a strong reputation, avoiding issues faced by some less reputable tax havens.
- Independent Judicial System: The BVI has an independent judicial system based on English Common Law. It collaborates with the private sector to develop laws and regulations, recognizing the offshore financial services sector’s significant contribution to the country’s GDP. This fosters a shared interest in maintaining competitiveness.
- Financial Privacy: The BVI is an independent country with a high standard of living, which has allowed it to avoid entering into information-sharing agreements with foreign entities. Client confidentiality is robustly protected by BVI corporate and business legislation.
- Accessibility: The BVI is easily accessible by sea and air, boasts modern telecommunications infrastructure, and operates on US Eastern Standard Time.
BVI BC Tax Exemption
Most relevant characteristics
A BVI Business Company is exempt from BVI income tax, as are dividends, interest, rents, royalties, and other payments made by the company. Additionally, all capital gains related to shares, debt obligations, or other securities of the company are tax-exempt. No estate, inheritance, succession, or gift tax is levied on these assets. Transactions and instruments concerning property, assets, shares, debt obligations, or securities are exempt from stamp duty, except for land transactions within the BVI.
Legal personality
A BVI Business Company possesses a separate legal identity and wields the same powers as a natural person.
Secrecy
Confidentiality is a hallmark of the BVI Business Company. Details about beneficial owners, directors, and shareholders are not part of the public record. Information such as the Register of Members, Register of Directors, Minutes, and Resolutions are held in strict confidentiality. However, these documents may be available for inspection by company shareholders. The only public records are the Memorandum and Articles of Association, which typically do not reveal the identities of shareholders, directors, or beneficial owners.
Structural flexibility
A BVI Business Company requires only one owner, one shareholder, and one director, and all of these roles can be held by the same individual. Operating officers need not be appointed, and the management structure can be tailored to meet specific requirements. Shareholders, directors, and officers can be individuals or corporations of any nationality. Shareholder or director meetings need not take place in the BVI, and there is no requirement for an Annual General Meeting. Meetings can be conducted electronically, and voting by proxy is permitted.
Provisions against confiscation
If a foreign government or authority seizes company shares or interests in the company due to reasons like nationalization or expropriation, the company or a shareholder can apply to the BVI court to disregard the seizure and maintain the person from whom the shares were seized as the rightful holder.
No reporting
BVI Business Companies are not obligated to prepare or file financial accounts. However, they must maintain records sufficient to explain their transactions and determine their financial position accurately. These records need not be kept in the BVI, and there is no requirement to publicly disclose commercial or financial records.
Types of Business Entities
BVI Business Companies can be incorporated in various forms, including as companies limited by shares, companies limited by guarantee, unlimited companies, segregated portfolio companies, and restricted purpose companies.
No requirement to state operational objects
Since 2005, there is no requirement for BVI Business Companies to specify operational objects in their foundation documents (Memorandum and Articles of Association). However, companies may choose to do so, and a “restricted purpose company” type is available under the Business Companies Act for this purpose.
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