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British Virgin Islands
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BRITISH VIRGIN ISLANDS (BVI) COMPANY REGISTRATION
Company registration in BVI is relatively straightforward. The British Virgin Islands (BVI) is a semi-autonomous territory located in the Caribbean Sea, around 80 kilometers off the coast of Puerto Rico. It has become a popular destination for individuals and businesses looking to establish an offshore presence, particularly for the formation of corporate trusts, offshore companies, and registered company in BVI.
With over 500,000 foreign companies registered in the territory, the BVI offers a stable and predictable legal system, which the United Kingdom oversees. This system is a reputable and established commercial center.
Additionally, the BVI has a level of autonomy that allows businesses to take advantage of the BVI’s legal system while also having the flexibility to structure their operations in a way that best suits their specific needs. The BVI’s incorporation and corporate tax regulations are favorable, making it an attractive destination for businesses looking for tax efficiency and privacy.
If you are interested in BVI company registration service and require further assistance, you may contact us at enquiry@relinconsultants.com
KEY REQUIREMENTS FOR INCORPORATING A BVI COMPANY
TIMELINE OF BRITISH VIRGIN ISLANDS INCORPORATION
Shareholder
BVI corporations must have at least one shareholder. It is advised that shares be issued promptly upon incorporation. Otherwise, the directors will be held accountable for any transactions undertaken by the organization.
Share Capital
There are no minimum share capital requirements for company formation in BVI. A company can have any minimum capital of US$ 1.
Directors
A minimum of one director is necessary for BVI corporations. The directors of the corporation do not need to be BVI residents and might be either private individuals or commercial organizations.
Registered Agent
Regardless of company type or business activity, every company must have a registered agent in the BVI. Registered agents serve as a go-between for the Registry of Corporate Affairs, the BVI International Tax Authority (ITA), and the company.
Registered Office Address
A local office address is required for BVI corporations. This address will be used for service requests as well as official notices. Postal boxes are not appropriate business addresses.
TYPES OF BUSINESS ENTITIES IN BVI
There are several types of business entities in the British Virgin Islands (BVI), including
BVI Business Company (BVIB’C)
A type of company that can be incorporated in the BVI and is commonly used for international business and investment activities.
Limited Partnership
A partnership is formed by one or more general partners who manage the business, and one or more limited partners, who provide capital but are not involved in management.
Limited Liability Company (LLC)
A type of company that combines the characteristics of a corporation and a partnership, with the liability of its members limited to their respective contributions.
International Business Company (IBC)
A type of company that is incorporated in the BVI and is commonly used for international business and investment activities.
Ordinary Resident Company
A company incorporated under the Companies Act has its management and control exercised in the BVI.
Segregated Portfolio Company (SPC)
A company that can create separate portfolios, with assets and liabilities ring-fenced from the assets and liabilities of other portfolios of the same company.
Economic Substance Requirements For Companies Registered In The British Virgin Islands
The British Virgin Islands (BVI) has implemented economic substance requirements for certain types of business entities, including companies and limited partnerships, to meet international standards for tax transparency and combat tax evasion.
These requirements state that companies conducting certain relevant activities, such as banking, insurance, shipping, intellectual property, and holding company activities, must demonstrate adequate economic substance in the BVI.
This includes having a physical presence in the BVI, conducting core income-generating activities in the BVI, and having an adequate number of qualified employees in the BVI. Failure to meet these requirements can result in penalties and fines. The BVI government has also set up an Economic Substance Division to monitor and enforce compliance with these requirements.
COMPARISON OF DIFFERENT BVI BUSINESS ENTITIES
| Business Entity | Legal Structure | Liability | Shareholders | Taxation | Legal Entity |
| Company Limited by Shares | Separate legal entity | Limited to capital contribution | At least 1 shareholder | No corporate income tax | Separate legal entity |
| Company Limited by Guarantee | Separate legal entity | Limited to guarantee amount | At least 1 guarantor | No corporate income tax | Separate legal entity |
| Unlimited Company | Separate legal entity | Unlimited | At least 1 shareholder | No corporate income tax | Separate legal entity |
| Restricted Purpose Company | Separate legal entity | Limited to specific purpose | At least 1 shareholder | No corporate income tax (if qualified as an RPC) | Separate legal entity |
| Segregated Portfolio Company | Separate legal entity | Limited to individual portfolio | Shareholders of each portfolio | No corporate income tax (if qualified as an SPC) | Separate legal entity |
PROCEDURE TO SET UP A BVI COMPANY
The procedure for company registration in BVI is as follows –
Determine the company structure and company name
Before registering the company with the BVI companies registry, the beneficial owner should work with our team of consultants to determine the optimal company structure and provide the necessary documents required. The authorities will require copies of the beneficial owner and director’s passports.
Proceed with the registration of the company
Once Relin Consultants has received all the required documents, the relevant forms will be prepared for signature by the parties involved. The consultant will then submit the British Virgin Islands company registration to the BVI Company registry. Contact us if you require additional information or support before registering with BVI company.
Submit a license application and open a corporate bank account
Once the company is incorporated, the consultant can assist with submitting any necessary license applications and help to open a corporate bank account, depending on the business activity.
DOCUMENTS REQUIRED FOR BVI COMPANY FORMATION
- Articles of Association and Memorandum of Association;
- Certificate of Incorporation
- Duly filled application form
- A letter of acceptance from the directors
- Passport copies (Notarized)
- Share(s) certificate
- Articles and Plan of Consolidation
PROS AND CONS OF A COMPANY IN BVI
PROS
Crypto-friendly
The British Virgin Islands (BVI) has emerged as a desirable location for initial coin offerings, crypto funds, and FinTech activities. The BVI has developed a regulatory sandbox to encourage BVI enterprises and other ventures to develop and use innovative FinTech in a low-touch regulatory environment.
Reputable
The British Virgin Islands have never been banned as a jurisdiction creating offshore entities by the Financial Action Task Force (FATF) on money laundering, or the Organization for Economic Cooperation and Development (OECD).
This implies that international finance watchdog groups have long regarded the British Virgin Islands as “white” (clean) financially. This is beneficial and safe for BVI company formation.
Tax Benefits
The government of the British Virgin Islands does not mandate BVI Corporations to pay corporation or income tax. BVI companies are not subject to income, capital gains, or withholding taxes in the British Virgin Islands.
Confidentiality
BVI corporations don’t need to provide information about their executives, directors, owners, or shareholders. The BVI company Register (British Virgin Island Companies Registry) does not have any information that may be used to identify any of these names. As a result, they are never found in public records.
Flexibility
BVI companies have minimal reporting and compliance requirements and can be easily managed and administered remotely.
Asset protection
BVI companies can be used as a vehicle for asset protection, as the BVI has strong laws protecting the assets of companies and their shareholders from creditors.
CONS
Substance and Reporting Tax
BVI authorities have implemented a revised rule from 1 January 2020, which requires all new company registration BVI and existing companies undertaking certain activities to declare whether they are a BVI tax resident.
If the company is a tax resident, it has to appoint active directors, lease a physical office in BVI and submit annual financial statements/reports to the authorities.
If a company is not a BVI tax resident, it has to provide supporting documents justifying the same. The updated regulation has resulted in additional compliance requirements and costs to the owners.
Restrictions
There are certain restrictions imposed by the authorities for company registration in the British Virgin Islands. For example, a BVI company is prohibited from owning properties or trading in the BVI. In addition, selected activities undertaken by a BVI company will require a license.
For example, a company undertaking banking, insurance, trust management, or investment advisory services must apply for a license via the British Virgin Islands Financial Services Commission.
TAX INFORMATION FOR THE BVI OFFSHORE COMPANY FORMATION
An International Business Company based in the British Virgin Islands is free from capital gains, inheritance tax, stamp duty, sales tax, and value-added tax. BVI might be a great place to launch the business if the investor’s goal is to maximize their profits.
A BVI company formation is free from all stamp duty associated with its assets or operations, with the exception of BVI land-ownership transactions, where stamp duty is still due.
Businesses based in the British Virgin Islands are exempt from filing tax returns or other types of reports to the government regarding foreign income.
BVI COMPANY RENEWAL
The BVI Government requires yearly renewal fees from all BVI Business Companies in lieu of corporate income tax. Annual service fees are also due for the optional company management and administration services (if requested) and the Registered Agent and Address services.
Beginning in the second year following incorporation, the annual renewal fee to the BVI Government is payable once a year and is due on the following dates:
(a) The fee must be paid by May 31st for all companies incorporated between January 1st and June 30th;
(b) by November 30th for all companies incorporated between July 1st and December 31st.
The company’s anniversary of registration serves as the deadline for paying the annual professional fees to the registered agent, which are also accounted for annually. The annual professional fees and government fees are typically raised on a single invoice for practical reasons. Since the dates for the government fees are set, the deadline for the entire annual services invoice will always be set far in advance of the government due date in the same year so as to ensure that all deadlines are met.
ALTERNATIVE TO BRITISH VIRGIN ISLANDS OFFSHORE COMPANY FORMATION
Purchasing a BVI company is an option if the applicant wants to establish a business in the BVI immediately. In other words, they are going to be investing in a shelf company. An offshore company that has been registered by the registered agent but hasn’t engaged in any business operations or taken on any debt or obligations is known as a shelf company.
It is regarded as a ready-made company or a BVI business for sale that entrepreneurs who want to establish a company in the BVI can purchase. To get started right away, the applicant has the option to buy a BVI shelf company with a bank account.
A shelf company can offer many advantages that a newly incorporated company does not, even though the cost of buying one can sometimes be greater than the total cost of incorporating a new business. First of all, a shelf company saves time because it eliminates the need for the applicant to spend a lot of time preparing the necessary incorporation documents in order to register a company in the British Virgin Islands.
Second, having an earlier registration date could help the business meet certain requirements for specific business transactions.
But buying a shelf company would also mean giving up the ability to select the organizational structure of the business. If they want to rename the shelf company, the applicant will also need to pay extra fees to the Registrars of Companies in the BVI.
FAQs
What is the taxation in BVI?
The British Virgin Islands (BVI) is a tax-neutral jurisdiction, which means that there are no taxes on income, capital gains, or withholding taxes for companies and individuals. BVI companies are not required to file income tax returns or pay taxes on their income.
However, BVI companies must file annual financial statements and pay an annual fee to the government, which is based on the authorized share capital of the company. There is also a stamp duty of 0.15% on all mortgages, charges, and debentures over BVI land and property.
It’s worth noting that BVI has implemented economic substance requirements for certain types of business entities, including companies and limited partnerships, to meet international standards for tax transparency and combat tax evasion.
These requirements state that companies conducting certain relevant activities, such as banking, insurance, shipping, intellectual property, and holding company activities, must demonstrate adequate economic substance in the BVI. Failure to meet these requirements can result in penalties and fines.
How much does it cost to maintain a BVI company annually?
The annual cost of maintaining a BVI company can vary depending on the type of company and its authorized share capital. The main costs include:
- Government fees: These include an annual fee for the registration of the company, which is based on the authorized share capital of the company. The annual fee for a company with an authorized share capital of up to $50,000 is $350 and increases with the authorized share capital.
- Registered Agent and office fees: Most BVI companies are required to appoint a registered agent, who will provide a registered office address for the company. The costs for this service vary depending on the service provider but typically range from a few hundred to a few thousand dollars per year.
- Other costs: Depending on the company’s activities, it may be required to obtain licenses or permits, which can incur additional fees. And also it may have to comply with the economic substance requirements, which may impose additional costs and time to comply with it.
- It’s worth noting that these costs are subject to change and may be different depending on the specific circumstances of the company. It is recommended to consult with a professional advisor to get an accurate estimate of the annual cost of maintaining a BVI company.
Can I register a company in the British Virgin Islands?
Yes, you can register a company in the British Virgin Islands (BVI). The BVI is a popular jurisdiction for incorporating companies due to its tax-neutral status, strong legal framework, and reputation as a reputable offshore jurisdiction.
However, before registering a company in the BVI, you should consider your specific business needs and goals, as well as the potential legal, regulatory, and reputational risks involved. It is also important to ensure that you are in compliance with all relevant laws and regulations, both in the BVI and in your home jurisdiction.
Before registering a company in BVI, it is advisable to work with a professional advisor to ensure that you understand the process and comply with all relevant laws and regulations. This will help ensure that your company is set up correctly and that you are aware of any potential risks or challenges that may arise in the future.
What are the types of companies in BVI?
The BVI Business Corporations Act 2004 (Act) specifies several types of companies which can be seen below: –
| Company limited by shares | Restricted purpose company | Segregated portfolio company | Company limited by guarantee | Unlimited company |
| The most prevalent type of corporation formed in the British Virgin Islands. | A special-purpose vehicle with a limited corporate capacity to carry out certain tasks. | A corporation with a share capital. |
Both the guarantee members and the stockholders have their own legal identities.
|
The corporation has the authority to issue an infinite number of shares. |
| Has the power to issue shares, the holders of which are the company’s shareholders (owners). | Typically used to store specific assets in securitization and structured finance deals. | The legal separation of each individual portfolio’s assets and liabilities from those of the other portfolios and from those of the firm itself | A business limited by guarantee might be authorised to issue shares or not authorised to issue shares. | These corporations are available in two forms: authorised to issue shares and not authorised to issue shares. |
How much does it cost to register a company in BVI?
The cost to register a company in the British Virgin Islands (BVI) can vary depending on the type of company and the services required. However, generally, registering a company would be around 1,500 to 2,000 US$ for the registration fees, including government and agent fees.
Why do people register companies in the British Virgin Islands?
There are several reasons why people register companies in the British Virgin Islands (BVI), including:
- Tax efficiency: BVI companies are not subject to income, capital gains, or withholding taxes in the British Virgin Islands, making it an attractive option for individuals and businesses looking to minimize their tax burden.
- Confidentiality: The BVI has strict laws protecting the confidentiality of company ownership and financial information.
- Flexibility: BVI companies have minimal reporting and compliance requirements and can be easily managed and administered remotely.
- International recognition: BVI companies are widely recognized and respected internationally and are commonly used for cross-border business and investment activities.
- Asset protection: BVI companies can be used as a vehicle for asset protection, as the BVI has strong laws protecting the assets of companies and their shareholders from creditors.
- Economic Substance Requirement: BVI companies are subject to economic substance requirements, which may impose additional costs and time to comply with it.
However, it’s important to note that while the BVI is a reputable offshore jurisdiction, it has been criticized for its lack of transparency, which may lead to reputational risks for companies registered there. It is also important to ensure that you are in compliance with all relevant laws and regulations, both in the BVI and in your home jurisdiction.
Does BVI Company need Registered Office and Registered Agent?
Yes, a British Virgin Islands (BVI) company is required to have a registered office and a registered agent.
A registered office is an official address that is used by the government and other official bodies to send mail and legal documents to the company. The registered office address must be located within the British Virgin Islands.
A registered agent is a person or company that is appointed to act as the official point of contact for the company and to receive mail and legal documents on its behalf. The registered agent must be located within the British Virgin Islands and must be authorized to provide registered agent services.
It’s important to note that the registered office and registered agent must be maintained at all times, and any changes to the registered office or registered agent must be reported to the Registrar of Companies. The company may also appoint a company secretary, who is responsible for maintaining the company’s records and ensuring that it complies with all legal and regulatory requirements.
It is advisable to work with a professional advisor to ensure that you understand the process and comply with all relevant laws and regulations. This will help ensure that your company is set up correctly and that you are aware of any potential risks or challenges that may arise in the future.
How do I register an online business with the British Virgin Islands?
Registering an online business with the British Virgin Islands (BVI) involves a similar process as registering a traditional brick-and-mortar business, but with a few additional considerations such as setting up a merchant account and a company website.
How do I check if a company is registered in BVI?
There are a few ways to check if a company is registered in the British Virgin Islands (BVI).
Online Search: The BVI Financial Services Commission (FSC) maintains an online register of companies, which can be searched by company name, registration number, or director’s name. This is the official register of companies in the BVI and can be accessed through the FSC’s website.
Contact the Registrar of Companies: The Registrar of Companies is responsible for maintaining the register of companies in the BVI. You can contact them directly to inquire about a specific company and its registration status.
Consult with a professional advisor: You can also consult with a professional advisor, who may be able to assist you in checking the registration status of a company in the BVI.
It’s important to note that the information available in the public register may be limited, and you may need to provide additional information to verify the registration of a company. Also, the company may be dissolved or inactive, and it’s important to verify the current status of the company.
Could I set up a BVI company from Singapore?
Yes, it is possible to set up a British Virgin Islands (BVI) company from Singapore. The incorporation process can be completed remotely, and you do not need to be physically present in the BVI to register a company.
After my company is formed, will I receive a certificate of incorporation?
Yes, you will receive a hard copy of this as well as an email once your company is incorporated.
Do BVI companies need to be audited?
No, since they do not have to file an annual return, the majority of BVI businesses do not require an audit. However, there are a few exceptions. Within six months of the end of the financial period, BVI businesses with investment business licenses must conduct an audit and submit an annual report to the Financial Services Commission.
They must also follow international accounting standards when preparing audited financial statements. Especially segregated portfolio companies will have to audit their financial statements and annual reports because they typically engage in investment activities like fund management.
Could I set up a BVI company from Singapore?
Yes, it is possible to set up a British Virgin Islands (BVI) company from Singapore. The incorporation process can be completed remotely, and you do not need to be physically present in the BVI to register a company.
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