Last year was the 30th anniversary of the enactment of the International Business Companies Act in the British Virgin Islands. Back in 1984, this Act marked the beginning of considering the BVI as a global and fast-growing business center. Let’s take a look at what advantages this jurisdiction may bring to your business if you have ever considered incorporating the company in the BVI.
Why Register a Company in the British Virgin Islands (BVI)
The BVI isn’t just a group of islands, each of which is surrounded by the ocean. The BVI is considered a British Overseas Territory. This means that the legal system is English common law. English common law is known for its popularity in the world, awareness, and simplicity of making deals and resolving disputes. However, its location in the Caribbean makes it favorable, as it allows you to be closer to North America and South America as well.
Benefits of BVI Business Companies
Before setting up a company in BVI, consider the advantages of incorporation. Representing shortly, these are the following:
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Political stability
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No currency controls
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No taxes are paid by the company
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No audit or accounting work required
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Ability to adapt the corporate structure entirely to the project
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No obligatory audits
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Simplicity of company management
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Possibility to move the company to another jurisdiction in the future
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Low taxes
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Ability to open a bank account
Tax Advantages and Confidentiality
All companies incorporated in the BVI and companies that are managed or controlled in the BVI are treated as residents and therefore as potential income tax payers under the provisions of Section 206 of the BVI Income Tax Act.
However, the Act contains income tax exemption provisions (Section 242 provisions):
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All business companies
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From income in the form of dividends, interest, rent, royalties, compensation, and other amounts paid by the company
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From income derived from actions involving shares of any kind and/or debentures of business companies.
In addition, the Act provides that no real estate, inheritance, premium tax rates, fees, duties, debentures, or other charges are payable in respect of any shares, debentures, or other securities of the company. Companies are not subject to government duty, except for transactions relating to the transfer of land in the BVI or the transfer of securities to a company that owns land (in the BVI). That is, the tax rate is 0%.
Who Should Consider Company Formation in BVI
That’s why anyone, individual or international business, can benefit from forming a company in the British Virgin Islands.
We, at Icon.Partners, can confirm, SMEs often consider the BVI as a jurisdiction for their companies used for international trading. This jurisdiction is great for startups, too, as it helps to keep vital information and company assets safe. Its status as a British Overseas Territory makes it recognizable and trustworthy, which helps attract investors.
BVI Company Types and Legal Features
Under Section 5 of the Act, it is possible to create these types of companies:
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a company limited by shares;
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a company limited by guarantee that is not authorised to issue shares;
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a company limited by guarantee that is authorised to issue shares;
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an unlimited company that is not authorised to issue shares; or
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an unlimited company that is authorised to issue shares.
Business Company (BC): Key Characteristics
No local director residency requirement: The company director can be of any nationality.
Taxation: BCs registered in the BVI are not subject to taxation on their worldwide profits.
Classes of shares permitted: Companies can issue various classes of shares, including registered shares, shares with no-par value, preference shares, redeemable shares, and shares with or without voting rights.
Power of company: The company has the same powers as a natural person.
Legal structure: The nation has an independent judicial system based on English Common Law.
To establish a BC, navigating and adhering to the specific regulatory and operational aspects governing these entities is essential. The following are crucial considerations:
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Share capital and currency. The standard currency for share capital is expressed in US dollars, but companies can use any currency. The minimum amount paid up for shares is USD 1. The most effective number of shares issued is capped at 50,000. Bearer shares are not permitted, aligning with international transparency standards and regulatory requirements.
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Trading restrictions. Cannot own real estate and trade within the BVI.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 or conduct any gambling-related activities.
Step-by-Step Guide to BVI Company Incorporation
To know how to set up a BVI company, let’s take a look at a step-by-step guide to BVI company formation, so you can better understand the process.
Check Name Availability and Choose Company Type
First but not least, we suggest taking 2-3 desired names for your company to check for their availability. The company name needs to be unique and not copy the names of other active companies. It means the BVI company registration search must be conducted before proceeding with the registration.
As we have pointed out, there are several options for company types in the BVI. You'd better critically assess the pros and cons of each type and its application to you exactly, before making a final decision.
Submit KYC and Corporate Documents
Some of the requested documents need to be provided to start the company registration. It includes:
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Passport (state and international) of each shareholder;
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Passport (state and international) of each director;
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Utility bill (proof of personal address) of each shareholder;
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Utility bill (proof of personal address) of each director.
Additionally, the registered agent may request a CV of each director/shareholder, a bank statement or bank reference letter, and a letter/proof of the source of funds.
At the same time, we prepare proper corporate documents: Memorandum and Articles of Association with information about shareholders and directors.
Government Filing and Company Registration
Once the documents are in good order, the incorporation process starts. It traditionally takes 3-5 business days, most time, even faster. You receive the digital copies of the documents, proving the company's incorporation in the BVI (Certificate of Incorporation).
Open a Business Bank Account in BVI or Remotely
Congratulations! Your company is officially registered. Now, it’s time to open a business bank account. We provide full support on this step, too. As there are a lot of options, it sounds rational to choose a bank first. Some of them require meetings in person to facilitate an opening, while some allow remote registration. Same as the package of documents.
Stay Compliant: Economic Substance and Renewals
To say shortly, all companies and limited partnerships registered or incorporated in the BVI need to conduct an annual review. Under the BVI Economic Substance Act, all BVI companies and limited partnerships, including BVI business companies with legal personalities engaging in one or more relevant activities, must fulfill the Economic Substance requirements concerning that activity.
Relevant activities usually include companies, working in such business categories as
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Banking
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Insurance
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Fund management
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Finance and leasing
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Headquarters
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Shipping
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Holding company
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Intellectual property
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Distribution and service centers
Such a review will show a fulfillment of Economic Substance requirements if the company has carried on any relevant activity; the company is considered a tax resident of the BVI, and if not, what jurisdiction it is, and an evaluation of substance in the BVI for the company and the need for its demonstration.
BVI Company Formation Packages with Icon.Partners
Name of the service
Start
Lite
Business🔥
Pro
Company registration, including state duty
✅
✅
✅
✅
Company registration certificate
✅
✅
✅
✅
Two copies of the Charter and Memorandum
✅
✅
✅
✅
Share certificate
✅
✅
✅
✅
Legal address for 1 year
✅
✅
✅
✅
Registered Agent (1 year)
❌
✅
✅
✅
Appointment of the First Director
❌
✅
✅
✅
Director’s Consent to Act
❌
✅
✅
✅
Mandatory Filing of the Register of Directors
❌
❌
✅
✅
Register of Directors, Officers, and Shareholders
❌
❌
✅
✅
Minutes of the First Board Meeting
❌
❌
✅
✅
Appointment of a Nominee Shareholder
❌
❌
❌
✅
Appointment of a Nominee Director
❌
❌
❌
✅
Shareholders’ Agreement
❌
❌
❌
✅
Issuance of More Than 50,000 Company Shares
❌
❌
❌
✅
Total cost
1890 USD
1450 USD
2020 USD
1550 USD
2280 USD
1750 USD
4550 USD
3500 USD
*The offer is valid until 2025-12-31
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"Their adept use of technology for communication and project management streamlined the entire process."
Thanks to Icon.Partners' efforts, the client was able to integrate with major platforms, such as Google, Facebook, and Stripe, and optimize their platform. The team was highly supportive and responsive from a workflow standpoint, and internal stakeholders were particularly impressed with the service provider's flexibility, professionalism, and technical prowess.
Oleksandr Platonov
CEO, VorfahrQR UG
Germany📍
Apr 10, 2024
Reviews