The British Virgin Islands (BVI) are a group of 46 islands in the Caribbean of which only 11 are inhabited. BVI is located approximately 60 miles east of Puerto Rico. The largest island is Tortola, where the Capital, Road Town, is located. The British Virgin Islands are a British Overseas Territory, which offers all the security and stability traditionally associated with the British flag.
The territory is responsible for its own internal self-government and is governed by a democratically elected Parliament and a Cabinet. BVI has an independent legal and judicial system based on English Common Law with a right of final appeal to the Privy Council in London. The United Kingdom is responsible for the territory’s external affairs, defense, internal security and the courts. The British Virgin Islands have become the only Caribbean Overseas Territory to which the British Government has devolved responsibility for developing and managing its own financial services industry. Policies and legislation have been developed in close partnership with the private sector to ensure that they meet the needs of the financial community. The government has created an environment that is highly attractive to private enterprise through this partnership. The integrity of the jurisdiction established by the government provides sophisticated and efficient supervision and regulation.
Since the adoption of its pioneering International Business Companies (IBC) legislation in 1984, the BVI has become a high quality international financial center. The government is actively encouraging the development of its offshore finance business and has upgraded the Companies Registry by installing state of the art technology. Some of the characteristics of the IBC are documented below:
- Reporting Requirements
- Restrictions on Name and Activity
- Local Requirements
- Tax Treaties
- Professional Services
An IBC is exempt from taxes provided it does not carry on business with persons resident in the BVI, own real estate in the BVI, or accept either banking deposits or contracts of insurance. Interest, dividends, rents royalties, and compensation paid by an IBC to persons who are not residents in the BVI are exempt from taxes. Also, capital gains realized by non-residents with respect to any shares are exempt. There is VAT tax.
A minimum of one shareholder is required and either registered or bearer shares may be issued. No details of the shareholders appear on the public file but a register of shareholders must be kept at the registered office address of the company.
A minimum of one director is required. The director does not need to be a shareholder. In addition, corporate and non-resident directors are permitted. Details of the directors are not required to appear on the public file.
An IBC is not required to file any financial reports or tax returns in the BVI. In addition, the books and records may be maintained in any manner desired and in any part of the world.
Restrictions On Name And Activity
Names must end with one of the following words, or abbreviations thereof- Limited, Corporation, Incorporated, Societe Anonyme or Sociedad Anonima. The following words, and their associated activities, cannot be used: Assurance, Bank, Building Society, Chamber of Commerce, Chartered, Cooperative, Imperial, Insurance, Municipal, Royal and Trust.
An IBC may not carry on business with persons resident in the BVI, nor own real estate in the referred jurisdiction, or provide registered offices for companies.
The local company law requires that an IBC maintain a registered office address within BVI and must also appoint a BVI resident as registered agent.
There are no specific statutory provisions governing secrecy in relation to companies.
There are no double-taxation treaties with the United States. There are double taxation agreements with Japan and Switzerland.
There are several accounting firms and law firms of international standing.