What are advantages of the set up of a company in the BVI?
- The British Virgin Islands ("BVI") is a group of around 60 islands in the Caribbean Sea. The capital of the BVI is Road Town. The territory relates to the British Overseas Territories and has a stable political and economic system. The official language is English which allows business owners to avoid the costly translations of official documents.
- The BVI are one of the most popular world offshore jurisdictions. Approximately 40% of the world's offshore companies choose to operate its business in this country.
- Formation of a company in the BVI gives various opportunities for effective tax planning (Our firm offers a wide range of tax planning services to our individual and business clients). Simplicity and clearness of the BVI tax rules is undisputable advantage of this jurisdiction. In addition, the offshore company is exempted from all local taxes and duties, including income and corporation taxes, capital gains tax, stamp duties, taxes upon the transfer of assets, taxes upon all interest, rent, royalties, etc. There are no requirements with respect to currency controls either.
- BVI companies are allowed to open local and foreign accounts, own shares and other securities, freely transfer their assets in any form, enter into and complete transactions in any currency, perform trading and investment activities. There are no restrictions on conducting business in any country of the world (except the BVI itself).
- Apart from a duty to maintain accurate accounting reports (ie preparation of bookkeeping), a company registered in the BVI is not burdened by excessive duties to submit any financial statements or tax reports for each fiscal year. There is no duty to conduct financial audit either. However, in the event the company maintains accounts with European Banks, management accounts are mandatory for almost all EU banks. This involves preparation of the financial and statistic information which shall be submitted in the form of periodic reports to the company's managers to enable them to make appropriate commercial decisions related to the company's daily operations. The management accounts are used for internal purposes (such account may contain details of cash flow status, sales revenues, accounts payable and receivable, etc), while financial accounting statements are publicly reported.
- The company which was set up in the BVI is subject to strictly confidential treatment since access to the data of its beneficial owners, shareholders and directors is restricted for third parties. The respective information is not available in the BVI Company Registry (except where the owners wish to do so) and may be disclosed exclusively on the basis of a ruling adopted by a local court. However, on 11 May 2017, the British Virgin Islands (BVI) published its list of Reportable Jurisdictions for the Common Reporting Standards (CRS) (an information standard for the automatic exchange of tax and financial information on a global level developed by the Organisation for Economic Co-operation and Development). 40 countries / territories are recognised as Reportable Jurisdictions for BVI law purposes (the full list may be found here http://www.bvi.gov.vg/pub/List of Reportable Jurisdictions for the CRS as of 13 June 2017 (final gazette copy).pdf). The BVI International Tax Authority has indicated that this is a provisional list and revisions to the list will be made as agreements are put in place between treaty partners to provide the information required under the CRS. The list of BVI Reportable Jurisdictions should be distinguished from the list of BVI Participating Jurisdictions. (the full list of Participating Jurisdictions can be found here: http://www.bvi.gov.vg/sites/default/files/bvi_list_of_participating_jurisdictions_for_crs.pdf)
- The existence of a simple and clear procedure for the incorporation of a company in the BVI is another sufficient advantage. The procedure for incorporation of a company in the BVI usually takes from 24 to 48 hours, and 1-3 working days should be allowed for the notarial certification and apostillation of all the necessary documents. An additional period of time required for the delivery of documents by courier service should also be taken into account by the future owner of the BVI company, whose personal presence is not mandatory within the process of incorporation.
- The official currency of the BVI is the US Dollar, which simplifies in a significant way the settlement of accounts with business partners. The main purpose of the formation of an offshore company in the BVI is the possibility to transfer any amount of currency to and from the country without any restrictions.
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.