STATUTORY REQUIREMENTS OF A BRITISH VIRGIN ISLANDS COMPANY

Type of Law.  Common Law, based on English Common Law with local modifications and local statutes.

Principal Corporate Legislation.  The Companies Act (Cap. 285), BVI Business Companies Act, 2004 (“The BVIBC Act”). (All companies previously incorporated under the International Business Companies Act, 1984, automatically became subject to the BVIBC Act from 1st January 2007.)

BVI Business Companies (Amendment) Act, 2012. 

Restrictions on Trading.  Cannot trade within the British Virgin Islands or own real estate there. Cannot undertake the business of banking, insurance, assurance, reinsurance, fund management, collective investment schemes, trust management, trusteeship, the rendering of investment advice or any other activity that would suggest an association with the banking or insurance industries. Cannot offer its shares for sale to the public.

Powers of Company.  A company incorporated in the British Virgin Islands has the same powers as a natural person.

Language of Legislation and Corporate Documents.  English.

Language of Name.  Latin Alphabet. Any name in a language other than English must be accompanies by a translation to ensure that the name is not restricted. The BVI Business Companies (Amendment) Act, 2012 provides detailed guidance on the use of foreign character names in the naming of the BVI Business Company.

Registered Office Required.  Yes, must be maintained in the British Virgin Islands, and must be maintained at the office of a licensed management company.

Name Restrictions.  Any name that is identical or similar to an existing company, or any name that suggests the patronage of the Royal Family or the Government of the British Virgin Islands. The BVI Business Companies (Restricted Company Names) Notice 2013 brings the number of restricted words or phrases.

Names Requiring Consent or License.  Bank, building society, savings, loans, insurance, assurance, reinsurance, fund management, investment fund, trust, trustees, Chamber of Commerce, university, municipal or their foreign language equivalents.

Suffixes to Denote Limited Liability.  Limited, Corporation, Incorporated, Société Anonyme, Sociedad Anónima or their relevant abbreviations.

Disclosure of Beneficial Ownership to Authorities.  No

Share Issue.  The normal number of shares issued is 50,000 with all of the shares having a par value, this being the maximum share issue for the minimum duty payable upon incorporation and annually thereafter. The shares may be expressed in any currency. The minimum number of shares issued is one share of no par value or one share of par value.

Classes of Shares Permitted.  Registered shares, shares of no par value, preference shares, redeemable shares and shares with or without voting rights.

Directors.  The minimum number of directors is one. Directors may be natural persons or bodies corporate. They can be of any nationality and need not be resident. A copy of the Register of Directors must be held at the Registered Office and any changes to the Register must be sent to the Registered Office within 15 days of the change. Failure to do so may result in a fine of US$10,000

Company Secretary.  A company secretary is not a requirement under the Act, but a secretary is normally appointed to facilitate signing obligations.  An imprint of the Company Seal must be held at the Registered Office. Failure to do so may result in a fine of US$10,000. If the Minute Books containing records of meetings of members and directors are not held at the Registered Office the address at which these books are held needs to be provided.

Shareholders.  The minimum number of shareholders is one.  A copy of the Register of Members must be held at the Registered Office and any changes to the Register must be sent to the Registered Office within 15 days of the change. Failure to do so may result in a fine of US$10,000.

Taxation. A Business Company does not pay any tax on its world-wide profits to the British Virgin Islands authorities.

Double Taxation Agreements.  The British Virgin Islands has treaties with Japan and Switzerland, although they have limited benefit and are not applicable to offshore business.

Financial Statement Requirements.  Whilst there is no requirement to file audited accounts with the authorities, The BVI Mutual Assistance (Tax Matters) (Amendment) Act, 2012 states that it is mandatory for a company to keep reliable accounting records for a minimum of five years from the date of transaction. The records must include sufficient information to explain the company's transactions and determine the financial position of the company with reasonable accuracy.

The Registered Agent must maintain a written record of the physical address where the accounting records are maintained for each company.

BVI companies that fail to comply with the Act are liable to a fine of US$10,000 as stated in Section 98 (2) of the BVI BC Act, 2004.

Economic Substance Requirements (ESRs).  Please refer to Frequently Asked Question.

Procedure to Incorporate.  Submission of the Memorandum and Articles of Association and a Certificate from the Registered Agent confirming compliance with the requirements of the ordinance.

Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error omission.