British Virgin Islands

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Overview

British Virgin Islands (BVI) is a British Overseas Territory in the Eastern Caribbean. It consists of the main islands of Tortola, Virgin Gorda, Anegada and Yost Van Dyke, as well as more than 50 other smaller islands and cays. With a good business and professional infrastructure, the Government actively promotes the development of the financial services industry. The BVI is not only the world's most famous company registry, but also the world's second largest hedge fund registry and the fourth largest exclusive registry for insurance products and services.

BVI legal system is based on English common law. It is part of the Eastern Caribbean Supreme Court (ECSC) region. A specialized commercial court was established in 2009 to hear commercial and financial matters from the British Virgin Islands. Appeals to the Eastern Caribbean Court of Appeal, with a right of appeal to the Privy Council of England.

The official language of the BVI is English and the official currency is the US Dollar. There are no exchange controls, no capital gains tax or capital transfer tax, no inheritance tax, no sales tax or value added tax, stamp duty and property tax are payable on certain transactions, personal and corporate income tax was abolished in 2004, payroll tax is currently levied on local employees, and there is no withholding tax in the BVI.

The British Virgin Islands became a market leader in corporate services with the introduction of the International Business Companies Act 1984, which created the International Business Company (IBC). This has become the industry's preferred offshore tool and is particularly popular in the Far East.

● Leading offshore company offshore center

: The second largest source of international foreign direct investment in the world, with more than $125 billion per year through the British Virgin Islands.

: Zero-rated corporate tax, no wealth tax, capital gains tax or inheritance tax for offshore entities.

:: Low administrative burden and cost of setting up and operating a company

:: British Virgin Islands companies have operational flexibility-the governance of the company can be adjusted according to the appropriate structure.

:: Improving the legislative framework for innovation

● Strong regulatory system

● Familiar with and establish legal and court systems based on English common law

● Stable and defined investor framework

● No exchange controls

● The local currency is USD

● Good business and professional infrastructure

Formation and management of BVI companies

BVI's regulatory framework, low taxes and established legal system have attracted a large number of international investors, which ensures that the region is a neutral and safe place for funds. The neutrality of such a venue makes it a suitable place for outside investors to establish holding companies or invest in markets where there may be political risks or legal barriers to direct investment. The BVI has more than 450,000 active companies registered.

1 January 2007, the BVI Business Companies Act 2004 became the only business company law in the jurisdiction. The BC (Business Company) Act reduces the income tax rate for local and international business companies to 0% and effectively eliminates the distinction between "offshore" and "onshore" entities. It was drafted to ensure that the British Virgin Islands fully complies with the European Union (EU) Savings Tax Directive and the EU Business Tax Code of Conduct, which is a British requirement for all of its overseas territories.

Under the previous IBC Act 1984, there was only one form of company available-a company limited by shares. Several different types of companies can be formed under the new regime:

● Company Limited

● Company Limited by Guarantee

● Mixed Guarantee Limited and authorized to issue shares

● an unlimited company authorized to issue shares

● Unlimited company not authorized to issue shares

the bill also allows companies to register as restricted purpose companies, typically used for structured finance transactions, or as independent portfolio companies limited to mutual funds and insurance companies.

located in the BVI are required to establish and maintain a register of directors and must appoint their first directors within 30 days of incorporation. Other statutory requirements remain minimal and flexible:

: only one director and one shareholder;

:: Shareholders, directors and officers are not required to reside in the BVI and there is no requirement for their nationality;

● No minimum capital requirements;

● Shares may be registered or bearer (subject to limited conditions only) and may be issued in any currency;

: It is not necessary to prepare annual accounts, but books must be kept;

:: If accounts are prepared, no audit is required;

: no return to shareholders, directors or officers;

:: Shareholders' and directors' meetings do not have to be held in the BVI and can be held by telephone;

: The Memorandum and Articles of Association are the only documents that may be retained in public records.

Business Company (BC) Act allows for more flexibility in the name. It allows the re-use of company names that have previously been removed, changed or dissolved from the register. The bill also allows company names to contain foreign characters, which will be very user-friendly for Chinese companies to use Chinese names for registration in the future.

registered agent must apply for incorporation and provide written consent to act. The registered office of the company does not have to be the address of the registered agent, but it must be located in the British Virgin Islands.

In 2006, the British Virgin Islands successfully introduced an electronic filing system called VIRRGIN. All company formation and post-formation documents can be carried out electronically, which enables the company affairs registry to quickly, efficiently and accurately turn around documents.

BVI limited partnerships are governed by the Limited Partnership Act of 1996; for general partnerships, it follows the common law provisions of the UK partnership law, but the provisions dealing with limited partnerships follow the legislation of the United States State of Delaware. The legislation is intended to promote the use of such instruments in investments and mutual funds. There is no minimum capital requirement or prescribed debt/equity ratio, and the limited partner's interest in the partnership is transferable. International partnerships are exempt from tax, but are prohibited from doing business locally.