Advice on How to Start a Company in BVI

Do you intend to open a company in the British Virgin Islands? Get quality advice, as it is crucial for making the right decision and avoiding mistakes at the initial stage of registration. A corporation set up in the British Virgin Islands (BVI) can become a reliable offshore-based ownership structure aimed at asset protection, allowing optimization of the taxation of income received globally.

Today, when global requirements are aimed at increasing tax transparency, a structure in the form of an International Business Company (IBC) of the British Virgin Islands is a legal way to diversify your assets, and a real opportunity to make your business booming.

Setting up an offshore corporation in no way means that the founder intends to evade taxes, but rather prefers confidentiality, not showing their name to the government.

Those wishing to establish an offshore company in the BVI should know that they will not need to visit the country to do so. The entire filing process can be done online, and the ready papers can be received by means of targeted courier delivery.

Turn to the Trusted Experts for Advice

In order to properly set up and incorporate a company without being cheated, you should deal with reputable providers of offshore services such as Offshore Pro Group.

Having received your request for opening a company, we will conduct a comprehensive review of all the benefits and possible disadvantages of a particular offshore jurisdiction, taking into account the character of business, the country of your nationality, tax residency, as well as other aspects.

It often happens that a customer plans to start a company in a particular offshore jurisdiction, but having received a professional opinion they see that this offshore is not suitable for their business, since it does not take into account certain aspects or does not resolve certain issues. 

One such reason may be the difficulty of opening a bank account. For example, banks do not welcome this offshore because of its disrepute or, on the contrary, because of the nationality of the company owner, whose country is not trustworthy enough.

In another case, your application for opening an account may be rejected due to the type of your business that the bank might consider too risky. Thirdly, the reason may be incomplete or incorrectly filled out bank forms. That is, the reasons for rejection may largely vary.

Why is one of the best solutions for your business a company in the BVI?

You can start a company in the BVI means using the state legal system based on the English common law. One of the important advantages for business, when registering a BVI offshore company is the political and economic stability of the country.

The British Virgin Islands are not only famous for their exotic beaches attracting tourists. This British overseas territory is also known for its strong offshore industry that has made it a popular offshore financial center. BVI corporate law backed by the government implies flexible conditions for doing business. 

Under the British Virgin Islands International Business Companies Act, you can open different types of companies, including a private company with limited liability or a guarantee. You can also open a company with unlimited liability, with or without the right to issue shares.

The BVI has strict business asset protection laws shielding foreign investors from political risks or future creditors. The official currency of the BVI is the U.S. dollar.

The government has no controls on capital flight or restrictions on foreign exchange transactions. The British Virgin Islands have a good infrastructure as well as the most successful economy among the Caribbean countries.

Favorable tax system of the BVI

Opening an IBC company in the BVI, provided you will not carry out any business operations within the country, gives your business an opportunity of excluding its global income from taxation. In order to do so, the business must be properly structured, both financially and administratively. As a result, the tax advantages will be as follows:

Despite the tightening of requirements to the offshore jurisdictions by the European Union and the OECD, the BVI still remains attractive for international businesses wishing to reduce their tax costs.

The British Virgin Islands have a territorial taxation policy that involves taxation of income received locally only. 

Yet another fact in favor of establishing an offshore company in the BVI is that the British Virgin Islands have no double taxation agreements with any countries except Japan and Switzerland.

This important peculiarity means that BVI is not required to disclose or share information about the income, profits, or other transactions of companies, or information about the directors, shareholders, or beneficial owners of business entities with foreign governments.

Thanks to its strategic geographic location, with access to markets of North, Central and South America, the country maintains a high standard of living. Therefore, the government has never had to enter into double taxation agreements to obtain international aid or access to goods and/or services from other countries.

Setting up a company in the British Virgin Islands means taking advantage of simplified business procedures when doing business. The IBCs are not required to file financial statements, conduct audits, and submit annual tax returns.

At the same time, the books and accounts must be kept by the company accountant, stored together with the main corporate records at the registered agent’s office. 

Of course, the records can also be stored elsewhere (outside the BVI), but then the storage location address and the identity of the person in charge must be provided in writing to the registered agent.

The financial statements, the main company’s records must be stored for at least 5 years, even after the dissolution of the company. In addition, all records must be clear, explaining the transactions and the financial standing of the company.

Note: When setting up a company in the BVI offshore, you need to consider the existing CFC laws of your country of nationality. Remember that your government will claim corporate profits if you are not a tax resident of the country of incorporation!

Corporate veil in the BVI

Establishing an offshore company in the BVI also means taking precautions related to the confidentiality of your business and name. But when we speak about confidentiality in the BVI, we should see it as secrecy. 

Of course, tightening of international norms and rules related to transparency and de-offshorization has had a significant impact on all offshore jurisdictions, and the BVI is no exception.

The British Virgin Islands were among the first offshore jurisdictions to adopt the Anti-Money Laundering Law (AML) that complies with the FATF recommendations. In addition to that, intergovernmental agreements on automatic exchange of tax information (TIEA) have been made with a number of states, according to the CRS standards.

Confidentiality in the BVI, firstly, is ensured by the fact that the country does not have publicly available corporate registers of beneficial owners or shareholders. The data on the company directors which are entered in the BVI registry is also not public.

At the same time, all the detailed information about the ownership rights of the company’s shareholders and beneficial owners is kept by the registered agent. According to the Anti-Money Laundering Law, registered agents are obliged to properly maintain the KYC information concerning the identity of beneficial owners, shareholders and directors.

Should there arise a request concerning information on the company owners from the regulatory authorities of the BVI, the registered agent is obliged to provide all KYC data within seven days.

Meanwhile, law-abiding companies can rest assured of confidentiality, as the legal platform is based on the principles of English common law. The only corporate documents that are publicly available are the Articles of Association and the Memorandum.

What do I need to start a company in the BVI?

If you wish to start an international business company (IBC), you will need to do the following:

There are no requirements to the ethnicity, residency or nationality of the shareholders or directors when starting a company. However, a single individual may perform the duties of all of the above positions.  

There are also no requirements to the authorized capital and its payment. Usually the authorized capital size for the company registration purposes is 50,000 USD.

In addition, it will be necessary to draw up the Article of Association, to specify the details of the registered agent and the company founders. The prepared documents are then submitted for approval to the Registry of Companies, and upon approval, applications for licenses are submitted, if necessary.

According to the latest amendments to the Business Companies Act (2004) dated 2019, registered international corporations can now conduct business in the jurisdiction of BVI subject to the requirements of the Economic Substance Act.

That is, if you wish to establish an international company, and engage in authorized activities within the BVI, your organization is not only required to have the appropriate licenses, but it must also carry out local administration.

The corporation must provide the level of staffing required for normal operation, have equipment (machinery, other means of business) and comply with the other requirements of economic substance.

Before your company would be able to start operating after opening, it is mandatory to open an offshore bank account. This step is very crucial, so it is better to do it before drawing up the company documents.

Experts of the Offshore Pro Group will approach your decision of setting up a company in a professional way. We will assist you in proper preparation of your personal and corporate documents and help you open an offshore bank account, taking into consideration your wishes and requirements. 

After preliminary submission of bank forms, letters of reference and other documents for opening the account, and upon hearing favorably from the bank, we will come to an agreement with you about the date of visiting the country where the bank is located.

If you have made a decision to open a company as your new business in the BVI or take your existing business to an international level, please feel free to contact our experts for advice in a convenient way, by phone or email.