The British Virgin Islands (BVI) is a prominent offshore jurisdiction that offers a strong foundation for a business’s growth. Accessing this pro-business environment of the country is easier with a BVI business company. Regardless of where you are in the world, a BVI BC enables you to trade seamlessly within or outside the geographical boundaries of the nation without any hassle or restrictions. If you are a budding entrepreneur perplexed about what a BVI business company is, this guide walks you through the essentials and answers your questions.
What is a BVI Business Company?
A BVI business company is nothing but an international business company. The 2004 amendment scrapped the IBC Act and brought in its place the BVI Business Companies Act. The latest act renamed the traditional IBC as the BVI business company.
It is the most common and preferred organisational structure in the British Virgin Islands. The revocation of the IBC Act removed the restrictions associated with domestic trade from IBCs, granting them complete freedom to trade within the country. Since 2004, a BVI business company can engage in both domestic and international trade.
Under the Business Companies Act of the British Virgin Islands, there can be five types of BVI BC:
- A company limited by shares
- A company limited by guarantee that can issue shares
- A company limited by guarantee that cannot issue shares
- An unlimited company that can issue shares
- An unlimited company that cannot issue shares
Notable Features of a BVI Business Company
Here are some of the defining features of a BVI BC:
- It must have at least one shareholder and one director.
- Newly minted companies must appoint the director within 15 days of incorporation.
- A BVI Business Company can own or purchase its shares.
- The firm must file the register of members with the Registrar of Corporate Affairs within 30 days of incorporation.
- It is mandatory to maintain and update information about the beneficiary owners (BO). The law pegs the ownership requirement at 10%. Thus, any person or company that holds 10% of the shares and voting rights is considered a BO. Aside from this, the company must file any changes in ownership within 30 days.
- Companies must file the information about the nominee shareholders, if any.
- There is no restriction on the locality of board meetings. They can be held anywhere across the globe.
- As per the 2023 amendment of the BVI Business Companies Act, a BVI business company is required to file an annual return. This must be done within 9 months after the end of a financial year.
However, BVI BCs also face restrictions. A BVI business company cannot:
- Own real estate.
- Undertake banking, insurance, and other investment business.
- Make a public offering of shares or get involved in any gambling-related activity.
Why Opt for a BVI Business Company?
A BVI BC has various attractive features that make it a sought-after option for offshore company formation in the BVI. Here’s a glance:
No Local Director
There is no cap on the nationality of the director. They can be from any country.
Tax Exemptions
A BVI business company enjoys various tax exemptions, such as freedom from stamp duty and no taxes on income from abroad.
Multiple Share Classes
A BVI BC can issue various classes of shares, such as registered shares, preference shares, redeemable shares, shares with no par value, or voting rights.
Corporate Personality
A BVI business company is a separate legal personality. Meaning it can enter into contracts and open a bank account easily.
Steps to Set Up a BVI Business Company
Starting a BVI company differs according to your choice of business structure. Follow the steps below for successful registration of your BVI business company.
Appoint a Registered Agent
Appointment of a registered agent is absolutely necessary in the island nation as per the BVI Business Companies Act. The agent must hold a license and should be registered under the Company Management Act. Thus, before hiring an agent, you must run a quick background check and verify that the firm or an individual has a registered license to carry out incorporation.
Name Reservation
The next step is to reserve the name of your BVI business company. The suffix in the name must address the company type and include any of the following: limited, incorporation, incorporated, or Société Anonyme. Aside from this, you must also check the availability of the name and scout through the restricted names list before finalizing.
Disclosure of Beneficial Owner
The recent AML policy upgrade requires firms to disclose the ultimate beneficial owners and beneficial owners. Transparency is of utmost importance while registering a BVI business company, and the registered agent must divulge the actual identities of the beneficiaries.
Draft MoA and AoA
Memorandum of Association (MoA) and Articles of Association (AoA) are the most significant documents for a BVI business company. A registered agent will help you draft the documents with the right legal tone and compliance with local requirements.
Select the Officers
Appoint the director and company secretary. You must enlist the personal details of the chosen directors and the company secretary with the registrar for a successful incorporation of your BVI BC.
Acquire Licenses
Licenses are crucial for seamless business operations. Submit the detailed business plans with a comprehensive organisational structure chart specifying the ownership of UBO and BO in the firm. A registered agent will guide you through th myriad formalities and help you obtain the license from the BVI Financial Services Commission.
Pay Government Fees
After successful submission of the forms and documents, pay the fees. The amount can vary as per the organizational structure.
Obtain Certificate of Good Standing
Once you have completed the registration formalities, file the register of directors and members to obtain the certificate of good standing. It is a crucial document that confirms that a firm follows the local requirements. Moreover, a BVI business company must obtain a certificate of good standing.
A BVI business company is a sure shot way to multiply the growth of your firm and gain global access. It gives a new entrepreneur freedom to explore with reduced tax burden and access to international business. Are you a businessperson looking to set up a company in any offshore jurisdiction? Business Setup Worldwide is here at your service. We have expertise with company formation services in various countries across the globe and ensure crisp guidance that keeps you compliant with regulatory requirements and changes. Get in touch with us on WhatsApp or email now!
