About British Virgin Islands
The British Virgin Islands, often referred to as the “BVI”, is an Overseas Territory of the United Kingdom. It is made up of four large islands and several smaller islands in the Eastern Caribbean. The BVI enjoy one of the most prosperous economies in the area, offer a stable political environment and use the US dollar as their currency since 1959.
Official language of the BVI is English.
As a British Overseas Territory, legislation is based on the British Legal System and English Common Law. The International Business Companies Act was first introduced in 1984. The current version is the Business Companies Act 2004 (as amended) (the “BCA”) which is the principal legislation which governs the formation and management of the companies incorporated in the BVI.
The British Virgin Islands are well known for their tax heaven status. International Business Companies are exempt from income tax and all stamp duties in the BVI. Annual fees apply.
Requirements to incorporate a Company
|Min number of Directors / local||Minimum 1|
|Min and max authorized share capital||No Minimum (the BCA abolished the concept of authorised share capital)|
|Share capital to be paid||A share may be issued for consideration in any form, including money, a promissory note, or other written obligation to contribute money or property, real property, personal property (including goodwill and know-how), services rendered or a contract for future services.
The consideration for a share with par value shall not be less than the par value of the share.
|Local company Secretary required||No|
|Restrictions on Names||The name of a limited company, shall end with
(a) the word “Limited”, “Corporation” or “Incorporated”;
(b) the words “Societe Anonyme” or “Sociedad Anonima”;
(c) the abbreviation “Ltd”, “Corp”, “Inc” or “S.A.”.
The name of an unlimited company shall end with the word “Unlimited” or the abbreviation “Unltd”.
The name of a restricted purposes company shall end with the phrase “(SPV) Limited” or the phrase “(SPV) Ltd”.
|Min Number of Shareholders||1|
|Disclosure of Beneficial Owner||Not publicly accessible|
|Time needed for incorporation (with standard Memorandum and Articles Association)||2 days|
Rules and Regulations
- There must be at least one director, who does not have to be resident in BVI, and whose information does not need to be publicly disclosed.
- There is no minimum requirement for secretaries and they do not need to be local.
- There must be at least 1 shareholder and the shareholder and director may be the same person.
- Shares do not need to have par value before they are issued to the shareholders and the capital can be in any desired currency.
- Shareholders may be individuals or a corporate body and they do not need to be local or resident.
- Engaging in business with BVI residents except where necessary for renting of property, maintaining records, holding meetings, debt obligations or employing for domestic work is not permitted.
- Fees are renewed and paid annually following the BVI Company formation.
- Financial records of the BVI Company must be kept. No requirement to prepare and submit financial statements.
Types of BVI Companies
Under the BVI Business Companies Act, 2004 (as amended) the principal of forms of companies in the BVI are as follows:
- a company limited by shares;
- a company limited by guarantee which is not authorized to issue shares;
- a company limited by guarantee which is authorized to issue shares;
- an unlimited company that is not authorized to issue shares, and
- an unlimited company that is authorized to issue shares.
A BVI company can be formed as a restricted purpose company or as a segregated portfolio company.
Companies limited by shares are the most common type of company incorporated in the BVI.
BVI law follows the English common law. In compliance with principles established under Salamon v. Salamon & Company Ltd. (1897) a BVI company is a legal entity in its own right separate from its members and continues in existence until it is dissolved. As such, liability is limited to the company itself and not the members. As a separate legal entity, the company is capable of suing and being sued in its own name.
It is also possible in the BVI for partnerships to be formed under the Partnership Act, 1996. Partnerships may be established as general partnerships, a concept very familiar across all common law jurisdictions, or else as limited partnerships. Under a limited partnership the liability of limited partners is limited to their participation in the limited partnership provided they do not become actively involved in the management of the limited partnership’s business. The general partner, usually itself a special purpose vehicle incorporated as a limited liability company, will undertake unlimited liability within the limited partnership.
Discretionary trusts are formed in the jurisdiction under the Trustee Act, 1961. Trustees of discretionary trusts are subject to considerable fiduciary duties. The Government of the BVI enacted the Virgin Islands Special Trust Act, 2003. Trusts formed under the 2003 Act are known colloquially as VISTA trusts. Many of the more traditional fiduciary duties of trustees are ‘switched off’ in VISTA and the day to day running of management may be reserved for the settlor of a VISTA trust.