The British Virgin Islands have long been known for its thriving offshore financial services sector and in fact, it is also home to around 40% of all the world’s offshore companies. The reasons behind this number is not due to its sandy beaches or pleasant climate, but rather to do with the huge range of fiscal and other benefits available to those who decide to incorporate a company, trust, or bank account there.
Why should you incorporate in BVI? Here are a few good reasons.
- A company incorporated in BVI is generally an International Business Company (IBC), otherwise known as an offshore company. It is a private corporation and is popular due to the fact that it is exempt from many kinds of taxes as well as offering the beneficial owner a high level of confidentiality and a flexible organisational structure.
- BVI has a strong and stable political climate and its economy has gone from strength to strength. This, combined with its relatively low international profile makes it the perfect location for company incorporation and offshore business entities. Its judicial system is based on the English common law and its currency is the US dollar.
- BVI is what is often referred to as a “tax haven” due to the fact that it offers foreign individuals and businesses low fiscal liabilities and shares little to no financial information with tax authorities. Because of this, many individuals or companies do not need to be physically present or even operate in the country to receive any of the benefits on offer.
- BVI companies are great for holding assets or property and this is due to a high level of flexibility when it comes to disposing of the property. The BVI company can behave like a holding entity for another company and it can also be used to defer taxation and minimise other liabilities when it comes to trading companies. It is also great for joint ventures and e-commerce and trusts and funds can enjoy low tax rates and high levels of security. Furthermore, a ship that is registered with a BVI company can apply for British flag registration with relative ease.
- BVI uses what is known as a territorial tax system which means that there is effectively zero corporate tax due on any companies incorporated in BVI that run their operations outside of the country. Types of tax that are exempt for these entities include income, customs duties, capital gains, sales, profits, inheritances, dividends, interests, and royalties.
- Tax is only payable on a BVI companies revenue when there are elements of the business which are run in-country. There are also a number of Tax Information Exchange Agreements in place and no withholding tax is payable.
- Setting up a company in BVI is relatively easy and there are not too many requirements that need to be satisfied. The company need only have one director and one shareholder who can be of any nationality and do not need to reside in the country. Furthermore, you don’t need to worry about annual meetings as these can take place wherever you are meaning you don’t have to travel to BVI to take part.
- Shares in a BVI company can be issued in any currency with a maximum of 50,000 shares.
- You are not required to file any annual returns of account audits, although it is always good to keep them anyway. Maintenance is low-cost due to the limited number of ongoing requirements.
- Confidentiality levels for a BVI company are high as company ownership is only permitted to be revealed under a lawful request from a TIEA jurisdiction. Beneficial owners are not required to be made public but the registered agent must have access to that information and should have done suitable due diligence. Nominee shareholders and directors can also be used as an extra layer of privacy as long as a declaration of trust is in place.
Fast Offshore has over 21 years of experience in BVI, assisting clients with the set up and ongoing maintenance of a variety of structures. We can provide comprehensive advice and guidance to those looking to set up any kind of offshore structure, in literally any jurisdiction. To find out more, get in touch today!