Business people wishing to take their companies to the global level often choose the British Virgin Islands (BVI) for this purpose. Registering a company in the jurisdictions has some important specifics.
Key facts about the BVI
The jurisdiction is located in the Caribbean and it’s a British overseas territory. Even though it’s an offshore zone, companies registered in the BVI enjoy a high level of trust. It’s a reputable jurisdiction recognized by all national organizations and banks.
English is spoken on the islands, which simplified business communication and company registration.
Bank transactions are performed in the US dollars and no currency control is applied in the BVI.
Financial services and tourism are the key industries in the jurisdiction. The number of offshore companies registered in the BVI is growing and now it exceeds 400,000.
More than 95% of the population are literate and local people are well-qualified to work for foreign companies.
Main advantages of the BVI for international entrepreneurs
It is highly advantageous for an international entrepreneur to register a company in the BVI. The main benefits that the jurisdiction offers include the following ones:
1. Fast and simple company registration. You will most likely need an attorney to give you a hand through this process so your company can be registered as soon as possible.
2. Minimal requirements to company founders. One shareholder and one company director is enough and both positions can be filled by the same person. Any foreigner can register a company in the BVI.
3. Light fiscal burden. Some taxes are non-existent in the BVI.
4. The BVI is on the EU white list of jurisdictions. Doing business with European partners and banks is quite possible.
5. High level of confidentiality. Information about company UBOs can be disclosed only by judicial decision.
6. Flexible corporate legislation. It is amended regularly and adapted to the needs of entrepreneurs in the first place.
7. Large corporate potential. There are very few restrictions for corporations in the BVI.
8. Large choice of legal commercial activities. Most market segments are open for foreigners. A license or a special permit is seldom required.
9. Flawless reputation of the Commercial Court. All disputes are resolved quickly and within the legislative framework.
10. Nominee services are legal. The company can have a nominee director and a nominee shareholder.
Benefits that the BVI offers to foreign investors
A foreign investor can find some serious benefits in the BVI that are seldom available in other jurisdictions:
1. An opportunity to buy a shelf company;
2. A transparent system of company purchase;
3. An opportunity to work with clients from other jurisdictions without any currency control;
4. Recognition of foreign ownership shares.
Startups are often launched in the BVI. What is more, you can join a business project at the stage when its prospects are already easy to see.
Forms of company ownership available to non-residents in the BVI
Foreign entrepreneurs register companies of the following types in the BVI:
1. Companies limited by shares;
2. Companies limited by guarantee;
3. Companies limited by guarantee authorized to issue shares;
4. Unlimited companies with or without shares: the company administration is free to decide if the company should issue shares or not;
5. Restricted purpose companies: the purpose(s) should be clearly stated in the company’s By-laws and all its activities should be aimed at achieving the set goals;
6. Segregated portfolio companies: a convenient form of ownership for a company owned by many people.
All the types of companies listed above are full-fledged legal entities and they can make business agreements, open bank accounts, take out loans, hire personnel, and so on.
Advantages of registering a Business Company in the BVI
Foreign nationals most often opt for establishing a Business Company in the BVI. Essentially, it is a company limited by shares but the abbreviation BC is commonly used in business circles. Experts point out the following main advantages that a BC boasts:
1. Clear and transparent regulation through a special Business Companies Act that was passed about 17 years ago but it remains an up-to-date Act;
2. A wide choice of company names (the company name can be in any language, even Chinese);
3. An opportunity to decide how much the company’s charter capital is going to be (mist often, BCs in the BVI have US$ 50,000 as their charter capital);
4. No need the deposit the charter capital;
5. The company is authorized to issue registered shares.
In addition to that, a BVI-registered BC can carry out business activities in the BVI and outside. No restrictions apply.
Requirements for company founders
The requirements are not too burdensome. Any company has to have at least one director and shareholder whose nationality and residence is irrelevant. Personal identification documents need to be supplied.
Economic substance requirements
Companies registered in the BVI have to have some economic substance in the jurisdiction and comply with some rules. Any local company has to do the following:
1. Rent a physical office in the jurisdiction;
2. Keep the corporate documents in the BVI;
3. Hire local residents (whose number has to exceed the number of foreign company workers);
4. Suggest several possible company names when applying for company registration.
Please note that companies owned by foreign nationals cannot buy real property (land and buildings) in the BVI. At the same time, renting real property is legal for a foreign company in the jurisdiction.
Please also note that since recently, foreign company founders have had to submit bank statements to prove their solvency.
Company maintenance costs in the BVI
The BVI is not a cheap jurisdiction and you have to take several costs into account. For example, you will not be able to avoid the following costs:
1. Office rent;
2. Office maintenance;
3. Salaries;
4. Accounting,
Office rent is rather expensive on the islands. An office 20 square meters in size can cost you US$ 2,000 per month. A warehouse is going to cost you twice as much. Without doubt, the rent will depend on the office building location and the size of the warehouse.
In addition, you will have to cover the utilities, telephone, internet connection, etc. Be prepared to spend US$ 300 to US$ 500 per month on that.
If your company has employees, having an accountant is unavoidable because he/ she will have to pay the salaries. If the accountant has no other duties, his/ her wage will have to be about US$ 200 per month. The more work your accountant has to do, the higher his/ her wage will have to be.
Thus, even though maintaining a company is rather expensive in the BVI, the benefits that it can bring will surely compensate for the costs.
