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British Virgin Islands (BVI) remains a popular jurisdictions with active company of 364,980 as at end of Q2 2021. Despite the various effort of OECD / FATF in cracking down offshore jurisdiction, BVI is proven to be one of the most ideal places in the world for establishing an offshore business.
1. Is BVI a tax haven? A tax haven country is where a country offers businesses and foreign investors with low or no tax liability, enabling it to be an attractive jurisdiction to incorporate businesses.
Most of the Caribbean nations are known as pure tax havens where no taxes are imposed. BVI is one such example where no taxes are imposed on offshore businesses. In addition, since there are no tax treaties with other countries, it possesses tax security, protecting the bank account holders’ financial privacy.
2. Political and Economic Environment BVI operates with only financial services and tourism as its main industries. The national income consists of 60% and 40% of the financial services and tourism industries respectively. Even though BVI has a smaller land area and population, it is still one of the most popular offshore financial centers.
Whilst money laundering may be a concern in BVI, there were measures taken such as the signing of Common Reporting Standards (CRS) in 2017 and it continued to adhere to the international guidelines on KYC laws and money laundering initiatives. In addition, the new Beneficial Ownership Secure (BOSS) Act was passed, and beneficial owners can no longer remain anonymous when they are uploaded into the government’s registry.
BVI is democratic and a politically stable economy with no territorial threats or internal tensions within the jurisdiction. BVI is also business-friendly. It is more affordable to start a business compared to other jurisdictions.
3. Business Company (BC) Business Company is the most popular type of companies in BVI. BCs follow the 1984 International Business Companies Act. Since then, it has incorporated more than 600,000 BC and remains one of the most popular places for establishing an offshore business.
BC is a company with limited liability. Since it is a separate legal entity, owners are not liable for the debts and obligations of the company. There are no restrictions for the requirement of at least one director and one shareholder, the position of the director and shareholder can be held by the same person. The speedy incorporation process withij of 2 to 5 business days makes it a preferred choice by many investors to enjoy the full tax exemption on profits or capital gains generated from outside of the BVI. In addition, the minimum paid-up capital of US$1 is required. There is also minimal compliance requirements and no reporting requirements. Hence, privacy is one of the key features of BC in BVI.
Another advantage would be the absence of exchange controls. Hence, funds can be transferred between different countries for trading and investment purposes while financial privacy is protected.
4. Benefits of a tax haven One of the BVI company advantages would be its tax-free nature. Leading accounting and legal businesses internationally enjoy a strong reputation in the BVI. The BVI has also been involved in around 115 Tax Information Exchange Agreements (TIEAs), with countries including China, Japan, United States, India, and Germany, allowing countries to exchange information on tax-related matters formally.
Even though BVI is a relatively smaller country, it has a relatively higher per capita GDP, which exceeds US$43,000. Furthermore, the political stability in BVI is well-known.
5. BVI Company Registration Process Once you have considered and decided to open company in BVI, you may proceed with the preparation. The steps to BVI company registration are as follows:
Step 1: Planning of your business idea. Think of a business idea that is unique and feasible.
Step 2: Choosing a suitable corporate entity. There exist many types of business entities but the most popular BVI company formation would be BC.
Step 3: Reserving of the company name and registration through BVI Commercial Registry
Step 4: Obtaining business licenses and permits
Step 5: Corporate bank account opening
Step 6: Staying compliant
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Whatsapp : (852) 6499 4686 Phone : (852) 2186 6936 Email : info@intershores.hk
Disclaimer: Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice. |
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