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Overview

BVI IBC

Overview

 

The British Virgin Islands (BVI) consist of a group of islands geographically situated in the Caribbean.  The capital is Road Town, located on the Tortola island which is the largest island and the approximate population is around 35,000. The BVI is a British Overseas Territory with a legal system based on mainly English common law.

 

A BVI International Business Company (IBC) is a private corporation that can carry out almost any international business activity in a strictly confidential manner and is exempt from any taxes in BVI. There are more than 900,000 IBCs incorporated in BVI.

 

Taxation

 

BVI IBCs are exempt from income tax payable on profits, interest, dividends and royalties. IBC’s are also exempt from taxes on worldwide profit. There is no capital gains tax, inheritance taxes and Value Added Tax (VAT) as long as the IBC carries out business outside the BVI.

 

Directors

 

  • Minimum number of directors is one

  • Corporate directors are permissible

  • No resident director requirement

  • No public filing of director details

  • No public access to director details

  • Location of directors’ meetings can be anywhere

 

Shareholders (members)

 

  • Minimum number of shareholders is one

  • Corporate shareholders are permissible

  • No resident shareholder requirement

  • No public filing of shareholder details

  • No public access to shareholder details

  • Location of shareholders meeting can be anywhere

 

Beneficial owners

 

  • Details pf beneficial owner(s) are not publicly accessible, as beneficial owner details are not required to be filed with any Government office in BVI

  • Shares may be held by a nominee on behalf of the beneficial owner(s)

 

Share Capital

 

  • Standard authorised share capital is US$ 50,000

  • Minimum share capital is USD 1

  • Share capital may be expressed in any currency

  • Shares may be issued nil or partly paid

  • Registered shares can be issued

  • Different classes of shares are allowed

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Accounts and return

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  • No requirements for filing of accounts

  • Accounting record must be kept to reflect the financial position of the company

 

Registered Office

 

  • A BVI IBC is required by law to have a registered office address in the BVI where documents will be served on the company

 

Secretary

 

  • A company secretary is not required, but a secretary is normally appointed to facilitate signing obligations

 

IBC name restrictions

 

  • BVI IBC must end with one of the following words, or abbreviations thereof – Limited, Corporation, Incorporated, Societe Anonyme or Sociedad Anonima.

  • It is prohibited for a BVI IBC name to contain words such as “Assurance”, “Bank”, “Building Society”, “Chamber of Commerce”, “Chartered”, “Co-operative”, “Fund”, “Imperial”, “Insurance”, “Municipal”, “Mutual Fund”, “Royal” and “Trust”.

 

Types of companies

 

  • Company limited by shares

  • Company limited by guarantee

  • Unlimited company

  • Restricted purposes companies

  • Segregated portfolio companies

 

Economic Substance Requirements

 

The Economic Substance Requirement (ESR) has been introduced in the BVI in January 2019.  Companies and partnership (except for partnerships that do not have the status of a legal entity) in BVI carrying out Relevant Activities will fall under the scope of ESR. If a company or partnership is a tax resident in a jurisdiction outside the BVI, it does not fall within the scope of the new rules.

 

The list of Relevant Activities are as follows:

 

  1. Banking business

  2. Insurance business

  3. Fund management business

  4. Finance and leasing business

  5. Headquarters business

  6. Shipping business

  7. Holding business (pure equity holding entities)

  8. Intellectual property (IP) business

  9. Distribution and service centre business

 

Legal entity will be treated as carrying out a relevant activity in the BVI during any financial period in which it receives income from that activity. If no income is received, the legal entity will not be considered as carrying out a relevant activity.

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A legal entity that carries out the above relevant activities in the BVI while being non-resident in a jurisdiction outside the BVI must be directed and managed in the BVI, have an adequate number of suitably qualified employees who are physically present in the BVI, incur adequate expenditures and have appropriate premises. Additional requirements are imposed on companies engaged in the business of intellectual property.

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Having direction and management in the BVI means having an adequate number of board meetings held in the BVI, a quorum of directors physically present in the BVI, an adequate level of expertise among board members and the keeping of board meeting minutes in the BVI.

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An entity must present a tax residence certificate from the competent authority of the jurisdiction (or other document confirming payment of income tax on the activity abroad) to the BVI tax authorities for the relevant financial period. It is possible that an entity may be exempt from fulfilling the BVI legislative requirements if the company carrying out the relevant activity in the BVI is non-resident in another country and pays income tax on all its activities in that country (e.g. through a branch in that country).

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The above information is only a brief and you had to consult the rules and laws regarding economic substance in BVI for a complete understanding.

 

Premier Global Fiduciary Services DMCC is here to advise you how best to set up a BVI IBC and discuss all support services required. If you are interested in setting up a BVI IBC or for guidance and additional information, please feel free to contact us on contact@premier-dubai.com or call us on +97144696707. Know more about our Services.

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