A small island state situated in the Caribbean, BVI has established a strong global reputation which employs internationally recognized and approved tax and transparency standards. BVI was added to the Organisation for Economic Co-operation and Development (OECD) “white list” of countries after complying with various OECD guidelines. BVI is a leading jurisdiction choice for doing business worldwide, due to BVI company advantages such as straightforward business setup procedures, effective regulatory framework, tax neutrality and flexible corporate regime. If you are thinking of setting up an offshore company in the BVI, you will first have to register company in BVI. Therefore, whether you are an aspiring entrepreneur or an experienced business owner, we will provide you with 10 top advantages of setting up a BVI company in 2023.
BVI Company Registry-Registrar of Corporate Affairs
British Virgin Islands business registry is The Registry of Corporate Affairs, which is responsible for registering companies in BVI and administering intellectual property laws in BVI.
The Registry of Corporate Affairs primarily administers the BVI Business Companies Act, and is responsible for ensuring that entities doing business in and from within the Territory are duly registered, and that the Register of Companies is properly maintained.
Advantages of setting up a BVI company in 2021
BVI holding company is one of the most popular offshore business structures among foreign investors. Whether you are an aspiring entrepreneur or an experienced business owner, here are 10 top advantages of setting up a BVI company.
- Tax neutrality
One of the most widely recognised advantages of incorporation in the BVI is the tax neutrality, which makes the BVI an ideal location to incorporate a company. Helmed as a tax haven, BVI offers their international investors and individuals little or even, no tax liability. Through the enactment of simple taxation rules and a territorial taxation system, the BVI has successfully created a system that offers numerous taxation benefits to its companies. The BVI does not impose any capital gains, gifts, sales, value-added, profit, inheritance, or corporation tax. Additionally, there are no taxes on the dividends, interests, rent and royalties.
While trading companies will pay taxes as usual in the jurisdiction where they conduct business activities, utilising a BVI company as an intermediary holding company enables the creation of tax neutral layers in the corporate holding structure.
1. High level of confidentiality
A high level of confidentiality is an important consideration if your business is looking to have privacy. Establishing an offshore company in BVI allows companies to keep business affairs confidential. The beneficial owner of a company is not required to be made public. Nominee directors and nominee shareholders can be used to conceal the identity of the real owner, provided there are documents to prove the real owner of the company.
Although the company has to maintain a register of directors and a register of members, it is not available for public viewing, thereby ensuring confidentiality for both the founders and investors. BVI registered companies are only required to disclose company ownership under a lawful request.
However, as there were fears of companies utilising BVI IBCs for tax evasion and avoidance, several safeguards have been implemented to reduce the incidence of abuse of corporate confidentiality such as international crimes and money laundering. The BVI was one of the first of the offshore jurisdictions to adopt progressive AML legislation compliant with the FATF Recommendations.
Moreover, as there are no taxes on offshore accounts and no establishment of tax treaties with other nations, this will ensure the financial privacy of your bank account.
1. Use of Trust
The use of trust allows businesses to pay lesser personal income taxes and inheritance taxes. Trust law has gone through vigorous modifications to eliminate un-commercial common law provisions. VISTA trusts and private trust organisations are some examples of new and ingenious products which have boosted the popularity of trusts, coupled with rules refining limitations to applicable non-charitable purpose regulations and trusts against remoteness of vesting.
2. Asset protection
Setting up an offshore company is an effective way to protect your personal assets, such as equity, intellectual property and real estate, from creditors and other interested parties. It allows you to protect assets from those whom you wish to keep your business interests private and to secure against future claims.
Companies are allowed to register company names in Chinese apart from their English name, which makes BVI an ideal offshore jurisdiction for foreigners from China, Taiwan and Hong Kong.
4. Minimal capitalisation requirement
BVI Companies are not subject to “thin capitalisation” rules or any capital maintenance requirements. Given that the company maintains cash-flow and balance sheet solvency, it will be a straightforward process to distribute assets to shareholders or redeem shares. A BVI company is explicitly empowered to render financial help to a third party for the acquisition of its claims.
5. Straightforward business set up
One director and one shareholder is sufficient to register a BVI company. There are no restrictions on the number, age and nationality of directors and shareholders. The director and company shareholders can either be corporate entities or natural persons. The sole director can also act as the shareholder
While there is no requirement for a company secretary, it is recommended to appoint one as it simplifies the signing of corporate documents. Moreover, it is not necessary to have audited financial statements and annual filings, which makes BVI company structures more cost effective. Annual shareholders’ and board of directors meetings are not mandatory. If it is necessary, the meeting can be held anywhere and can be held by telephone, e-mail, fax and other telecommunication means. Therefore, this makes managing a BVI-incorporated company hassle free.
BVI companies are ideal for startup companies due to its flexible organisational structure and straightforward BVI company registration procedures.
6. Corporate efficiency
BVI companies can engage in any lawful act or activity and there are no restrictions on the scope of business, with the exception of special restrictive industries like insurance, banking and military. There are also efficient procedures to authorise business activity as the approval can be completed without the need for a shareholders’ resolution.
7. Low cost of incorporation
Annual government fees are around US$450, while companies can save on annual reporting and tax filing requirements. With the low BVI company registration fee and yearly renewal fees, setting up a company in the BVI is relatively inexpensive when contrasted to other jurisdictions such as Cayman and Bermuda. It costs around US$1,400, inclusive of disbursements to incorporate a vanilla BVI company.
As it is not mandatory to have a resident director and company secretary, it provides cost savings for business owners looking for a company to hold assets or operate as a business entity for trading and investment.
8. Transaction fluency
Recognised as the largest offshore corporate domicile, the BVI benefits from the presence of all of the top tier offshore law firms staffed with experienced corporate lawyers, with most of them trained with and practised at reputable UK law firms. This provides potential BVI business owners a peace of mind as they are assured that the transactions are professionally handled and transaction fluency is enhanced.
BVI company registration is hassle-free if you are familiar with the entire incorporation process. Tetra Consultants strives to provide our clients with a seamless experience when setting up a company in BVI. Our team of experts will ensure that your BVI company can be operationally ready as soon as possible.