While the British Virgin Islands (BVI) are just one of many locations catering to offshore companies and offshore banking, few jurisdictions offer flexibility of a BVI company and bank account. Aside from confidentiality – the registry limits personal information to public exposure. Moreover, company reporting requirements are minimal. The BVI pioneered many of the financial and tax benefits used by offshore jurisdictions, and still has the greatest number of registered offshore companies. Plus, BVI has some of the strongest, safest banks in the region.
Currently there are seven BVI banks operating. None of the banks in the BVI will currently accept US or Canadian account signatories. This is because of the harsh FATCA laws and the Canadian equivalent which banks must follow for such clients. So, if someone in these countries wants a BVI company and bank account, the would likely be better off going with Nevis, a neighboring island. Moreover, the privacy and asset protection laws are superior in Nevis (particularly with a Nevis LLC) over BVI. We establish companies and bank accounts in both BVI and Nevis as well as many other jurisdictions.
Alternatively, if you want to establish a BVI company and bank account, we can establish the company in BVI and the bank account in another jurisdiction. So, you are not stuck with a BVI bank just because you have a company in BVI.
BVI, a Popular Choice
To date, people have incorporated nearly 1 million offshore companies in the BVI over the past 35 years. Keep reading and you will learn why BVI makes an excellent choice for offshore company registration. You will also see why a BVI company and bank account is the most popular choice for Asian clients.
BVI company establishment is ideal not only for business people per se. It is also useful for those seeking to hold intellectual property rights, protect inheritances, trade Forex and stocks, and hold real estate. BVI has few rivals when it comes to company formation.
BVI Advantages
Located in the Caribbean, the BVI are famous for its white sand beaches and fantastic sailing and snorkeling opportunities. While tourism is a major economic driver in the BVI, it is not the largest industry. The financial services sector holds this distinction. As such, it which makes up approximately 60 percent of national income in BVI. Most of these financial services companies are based on the largest cities in the BVI, Tortola, and its capital, Road Town. Many top accounting and law firms also have a BVI presence.
English is the official language. Likewise, the judicial system is based on English common law. The telecommunications systems are state-of-the-art. The legal system derives from English Common Law. Most important, the country and its government are very stable, with a strong reputation.
In addition, the BVI observes Atlantic Standard Time (AST) year-round. AST is the same as Eastern Daylight Time (EDT). So, it is the same zone as the eastern part of the U.S. for much of the year. When Eastern Standard Time (EST) begins in these areas, it is one hour behind AST. Thus, investors living in most of the U.S. will find contacting BVI financial institutions convenient during business hours.
Although the BVI are a British Overseas Territory, the pound is not its official currency. That honor belongs to the U.S. dollar. The government does not impose restrictions on foreign exchanges.
When time is of the essence, a BVI financial services company can deliver. If an offshore company has all of its documentation in order and performed its due diligence, incorporation is possible within 24 hours.
BVI Business Companies Act
The BVI Financial Service Commission is the governing body for business incorporation. The BVI International Business Companies Ordinance became law in 1984, surpassed by another law 20 years later. This later legislation erases some of the distinctions between offshore and onshore companies in the BVI.
Under the 2004 BVI Business Companies Act, all international companies must have a Register of Directors. Within 30 days of incorporation, the company must appoint its initial director. Companies need to have only one shareholder and one director. On the other hand, there is no upper limit on the number of shareholders. Such shareholders may include both individuals and corporate entities. Directors and shareholders may consist of the same person or multiple individuals. There is no minimum share capital. Unlike some offshore jurisdictions, the statutes do not require local directors or secretaries.
BVI Articles of Incorporation
Company names may appear in any language, as long as one uses Roman characters. Such names are unique, and cannot share the name of any current BVI registered company. If a company chooses a foreign name, include a notarized English translation with the application. Most types of business suffixes are allowed. However, if the company uses words such as bank, loans, insurance, trust or similar terms relating to financial institutions, special licensing is needed.
Create a company with limited shares, or an unlimited company. The founder may establish a segregated portfolio or restricted purpose company. Limited companies may end with various suffixes, including Limited or Incorporated. The names of unlimited companies must end with Unlimited or the abbreviation.
Companies do not require a stated corporate objective. There are no annual meeting requirements, whether in the BVI or elsewhere. There is no need for filing annual returns or financial statements. Yearly audits are not conducted. While companies are required to maintain accounting records and relevant documents for at least five years, there is no need to store such records in the BVI. However, the Registrar must have a record of the physical address in which company records are stored.
Unlike some offshore tax havens, the BVI offers international companies the ability to own local real estate.
BVI Taxes
In the BVI, there is no corporate income tax. That includes no taxation on investment income or capital gains, interest, dividends, royalties, and rental income. There are no personal income taxes. That includes no estate, gift and inheritance taxes.
However, the BVI participates in the EU savings directive. That means residents of an EU state can expect their agents to exchange information regarding interest payments with the particular EU state’s tax officials. This information includes the amount of the payment and beneficiary.
If the company wants to purchase real estate in the BVI, expect to pay a stamp duty. This tax is based on the property’s market value. Currently, the stamp duty runs from 4 to 12 percent of the property value.
BVI levies an annual land tax of $50 US for properties under half an acre. Those properties consisting of between one-half and one acre are taxed at $150 US per annum. If there is additional acreage, it is taxed at $50 US per acre.
Incorporating in the BVI
Incorporating in the BVI is a relatively straightforward procedure. Only a licensed, registered agent may apply for the incorporation. Our organization provides this service. The founders must provide a certified copy of their passports to the agent. You also need to provide certified proof of domicile to get started is a recent. A recent utility bill will meet this requirement.
Necessary documents include a memorandum of association and articles of association. In the former, the maximum number of shares the company is issuing is included. However, the memorandum of association may also state that the company will authorize an unlimited number of shares. After the registered agent signs this paperwork, he or she then files it with the Registrar of Corporate Affairs. As of this writing, these documents do not include the names of directors, shareholders or beneficial owners. Thus, privacy is assured. This may or may not change in the future.
Once the Registrar determines that the documents meet all the BVI Companies Act Requirements, they register the company. That involves providing the company with a special number and issuing the certificate of incorporation.
The company must always maintain a BVI registered agent. Should a company fail to do so, it runs the risk of losing its registration. The registered agent holds key documents, including:
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- Copies of the articles and memorandum
- Members’ register
- Directors’ register
- A decade’s worth of all notices and pertinent documents filed with the Registrar
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Note BVI still permits bearer shares. If one uses them, bearer shares must stay with a licensed BVI custodian. Companies with initial share capital of up to $50,000 USD pays the minimum annual licensing fee. For companies with share capital above that amount, the annual fee is an additional $650 as of this writing.
Company Dissolution
Should you decide to dissolve a company incorporated in the BVI, the process is not difficult. While legally dissolving the company may prove complex, there are other options. For the most part, failure to renew the registration for several years will end with de facto dissolution. It is critical, though, to keep company records for at least five years when going the failure to renew route for dissolution.
One caveat: If a company is dissolved because it is eventually struck from the registry, a creditor may attempt to reinstate the company.
BVI Company and Bank Account
Unlike some offshore jurisdictions, the BVI does not require a company incorporated in the jurisdiction to open a BVI bank account. A BVI company may open a corporate bank accounts in the jurisdiction in which the principles prefer.
If the company does not conduct much of its business in the BVI, it may not make sense to open a BVI bank account. It is incumbent upon company officers to conduct due diligence and determine whether maintaining a corporate bank account outside of the BVI makes sense from a tax perspective.
For those companies choosing to open a BVI bank account, certain documentation is required. This includes:
- Company registration proof
- Company directors and their identification documents
- Beneficial owners and identification documents
Required documentation may vary according to the bank. As with any bank, the company makes it banking determination based on its own needs and the types of services provided.
In the BVI, banks will usually require the presence of a company founder when the documentation is filed. If it is not possible for the founder to appear and sign the necessary documents, a representative given power-of-attorney may do so. Expect it to take between several days and several weeks before the account is officially opened. The bank sends an acceptance letter after reviewing the application.
Conclusion
BVI is one of the most popular jurisdictions in which to open a company and bank account. It is especially popular for Asian clientele. If asset protection from lawsuit is your priority or you live in the USA or Canada, choose Nevis over BVI. This is because Nevis has far superior asset protection statutes over BVI. Plus, no BVI banks will open accounts for Americans or Canadians.
