Article by Conor Jennings

Yes, yes, we all know what the mem and arts and the local companies’ legislation say about having so many (offshore) board meetings a year but, even so, wouldn’t it just be nice to have the flexibility of having them where and when they were needed rather than having to travel half way across the world for a one hour meeting to discuss not very much?

Honestly now – is this not familiar? We are all very busy and sometimes getting to and from board meetings is just so much hassle. Although we all appreciate the obvious corporate governance benefits of having board meetings, do you wonder sometimes whether or not these companies need more than one meeting a year?

Flexibility is the answer to all of this. Some companies need more meetings than others, but in this respect, jurisdictions around the world differ in their approach to board meetings. Perhaps one of the most flexible and pragmatic jurisdictions is the British Virgin Islands (BVI).

The BVI has managed the perfect mix of having sound, modern and practical legislation regulated by an internationally approved Financial Services Commission staffed by experienced individuals. One of the benefits of this is that the Regulator has the discretion to tailor legal requirements to suit the particular needs of individual companies.

For example, under BVI’s International Business Companies Ordinance 1984, there is no requirement to hold directors’ meetings in BVI or even to appoint local directors. However, if the Regulator believes that having local directors and board meetings would strengthen the company then he will discuss the merits of this with the owners of the company. BVI is able to offer this flexibility and pragmatism.

In addition to the fact that an International Business Company (IBC) incorporated in the BVI is exempt from tax, its government charges for setting up and operating are considerably lower than in other offshore jurisdictions. For example, the annual licence fee for a captive insurance company in BVI is only $2,000 whereas in Guernsey it is over $5,000, and in Cayman it is over $6,000.

If BVI is such a good place from which to do business, why haven’t I heard about it before?

The answer is simple. Until very recently, the BVI has never really bothered to market itself, and quite frankly, with over 400,000 registered companies, it hasn’t really needed to. Those professionals who are familiar with BVI will tell you that besides its zero tax, its low costs, its flexible laws and pragmatic regulation, it also has a proven legal system based on UK common law, and plenty of internationally experienced professionals working there. All in all, to quote the BVI Tourist Board’s slogan: BVI is one of "Nature’s Little Secrets".

However, that’s all about to change. Following the establishment of the Financial Services Commission in January 2002 which concentrates on regulatory issues, and the Finance Centre which undertakes all marketing and promotional activities, you can expect to hear BVI mentioned more and more.

Traditionally, BVI has been known exclusively as a center for incorporating IBCs (over 400,000), but not for long. The new Finance Centre’s mission is to spread the news about the diversification of BVI’s financial services. Recently BVI has developed strongly in the fields of mutual funds, trusts and captive insurance. In 2002 it incorporated 40 new captive insurance companies, and now has nearly 3,000 mutual funds and countless trusts. BVI has introduced amended or new legislation for insurance, trusts, insolvency and, most recently, a new Merchant Shipping Act, which will attract more and larger yachts to be registered in the BVI.

All in all, the BVI is an extremely attractive jurisdiction from which to operate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.