BVI IBC's, BVI Business Companies, BVI Trusts

 General Introductory and Offshore Tax Information

In October 2008, the fourth Global Financial Centres Index (GFC14) ranked the British Virgin Islands (BVI) in the top thirty jurisdictions, thereby declaring the BVI one of the world’s dominant international financial centers.  This showed an improvement of the BVI’s rating from March 2009, indicating that the BVI had made strides in its perception as a financial center by the international community.  Areas of improvement included the availability of a pool of educated, well trained professionals, market access, competitiveness as a business and investment hub, health business environment and infrastructural development.

The Financial Services Commission of the BVI was the first regulator to be admitted with an ordinary status into IOSCO (International Organization of Securities Commission).  This decision to accept the BVI as a member resulted from an MOU which was signed between the BVI and the IOSCO on cooperation in matters regarding information exchange.

As a tax haven and international financial center, the BVI was observed for speedy decision making and a coherent regulatory system which contributed to the level of competitiveness that international financial centers and tax havens like the BVI exerted on the international scene.

The British Virgin Islands are a zero tax offshore haven.   BVI offshore companies are not subject to any taxes on offshore profits and income.  Other tax exemptions that BVI offshore companies and legal entities benefit from include:  

• Exemption from income tax, tax on profit or gains earned by the trust or its beneficiary, Stamp Duty, excise tax and tax on transfers.
• Non-resident beneficiaries are liable to zero estate, succession, capital gains, gift, inheritance or excise tax
• Annual fees are payable to the Registrar and may vary accordingly

BVI Offshore Business Entities:

• BVI Banks and Trust Companies
• BVI Business Companies
• BVI International / Offshore Insurance
• BVI Segregated Portfolio Offshore Companies

 

BVI Banks and Trust Companies

Main Features:

• BVI Offshore Banks and Trust Companies are regulated by the Banks and Trust Companies, 1990 (amended in 2006)
• The assets placed in a trust fund are a separate entity and do not form part of the trustee’s estate
• General trust licenses are not issued if the applicant involved does not have at least or more than a fully paid-up capital of US $250,000 or the equivalent to that amount in a foreign currency
• Applicants may be required to make an investment or deposit of a maximum of US $100,000 as may be prescribed by the Governor of the BVI
• May be required to make  an investment or deposit US $500,000 as may be prescribed by the government
• Special Trusts are set up for the establishment of trust of company shares so that shares may be retained indefinitely, whilst allowing the company to be managed by its directors without the trustee being able to exercise power of intervention.

Types of BVI Offshore Trust Company Licenses

Class I License

• Issued to companies involved in providing trust services and company management

Class II License

• Issued to companies for the provision of only trust services

Restricted Class II License

• The holder of this license is unable to provide trust business other than in relation to other trust companies
• May only collaborate with a maximum of 50 trust companies

Class III License

• Issued to companies for the provision of only company management services

Restricted Class III License

• The holder of this license is unable to provide company management services
• May only provide nominee shareholder, directors and officers for BVI companies

General Trust License

• Issued for the provision of trust services without restrictions       

Restricted Trust License

• Issued for providing trust services with the exception of doing business with persons other than those names in any undertaking which accompanies the license application

Types of BVI Banking Licenses

General Banking License

• Issued for providing bank services both within and outside the BVI without restrictions

Restricted Class I Banking License                   

• May not accept deposits from residents of the BVI, other than another licensee or a company constituted under the IBC Act 1984
• May not make any investment in an asset representing a claim on a resident of the BVI, except in the case where such claim results transaction with another licensee
• May not purchase Government, statutory (corporation) or corporate bonds and securities in which the Government of the BVI is the sole majority beneficial owner
• Holders  of this license are required to have a minimum fully-paid up capital of US $1 million or the equivalent to that amount in a foreign  currency
• May be required to make  an investment or deposit US $500,000 as may be prescribed by the government
• Required to have at least two (2) directors

Restricted Class II Banking License

• Issued for providing banking services with the exception of soliciting and receiving funds from business or trade from individuals besides those named in any undertaking which accompanies the application for the license.  
• Holders  of this license are required to have a minimum fully-paid up capital of US $1 million or the equivalent to that amount in a foreign  currency
• May be required to make  an investment or deposit US $500,000 as may be prescribed by the government
• Required to have at least two (2) directors

BVI Business Companies

Main Features:

• BVI offshore business companies are regulated by The BVI Business Companies Act, 2004, which is a consolidated act of the BVI Companies Act and BVI International Business Act
• Companies constituted under the laws of another jurisdiction may continue into the BVI as BVI companies
• BVI business offshore companies may not conduct business with residents of the BVI
• With the exception of a lease, is not permitted to own an interest in any real property located in the BVI
• BVI business offshore companies may not provide banking or trust services unless issued with the relevant license for banking and trust business
• BVI business offshore companies may not provide company management, reinsurance or insurance services or act as an agent or broker without being issued with the necessary license
• Meetings of members or directors are to be held within the BVI
• Capable of issuing a wide variety of shares
• The name of a BVI IBC may not be the same as or similar to that of another company incorporated in the BVI. Names are required to end with the following endings such as Limited or Ltd., Corporation or Corp., Sendirian Berhad or Sdn Bhd, Incorporated or Inc., Société à Responsabilité Limitée or SARL, Société Anonyme or S.A., Sociedad Anónima or S.A., Besloten Vennootschap or B.V., Gesellschaft mit bescrankter Haftung or GmbH, Société par Actions, Naamloze Vennootschap or N.V.

Types of BVI Business Offshore Companies

• Company limited by shares
• Company limited by guarantee that is authorized to issue shares
• Company limited by guarantee that is not authorized to issue shares
• An unlimited company that is authorized to issue shares
• An unlimited company that is not authorized to issue shares

BVI International / Offshore Insurance

Main Features:

• BVI offshore insurance is governed by the Insurance Act 2008
• The new Insurance Act governs the regulation and control of BVI domestic and offshore insurance services which are provided in and from within the BVI.  The Act also oversees the licensing of insurers and other persons involved in offshore insurance and other related matters.

Mutual Insurance Company

Main Features:

• BVI Mutual Insurance Companies are not limited by shares
• Provide insurance services on the mutual principle as a cooperative enterprise where policy holders are the ones who own the company
• Are required to have a reserve fund to which premiums are contributed by the policy holders
• BVI insurance companies which are joint stock companies are required to be mutual insurances and have a full paid-up capital of the joint stock company or have a minimum reserve fund of US $200,000; the company must be a provider of long-term insurance services
• BVI insurers involved in general business must have a reserve of at least US $100,000
• Insurers involved in both general and long-term business must have a reserve of US $300,000
• BVI insurers carrying both general and long-term business are required to maintain separate accounts and segregated funds for each of these insurances

BVI Segregated Portfolio Offshore Companies

Main Features

• BVI offshore segregated portfolio companies are regulated under the BVI Business company Act and the Segregated Portfolio Companies Regulations, 2005
• A BVI offshore company may choose to register or incorporate as segregated portfolio companies
• BVI offshore companies segregated portfolio companies that are mutual funds are required to have at least one manager, administrator or custodian and may appoint at least one investment advisor
• Required to have an auditor and to file audited financial statements with the Commission within six months before the end of its financial year
• Mutual funds registered as a public fund are required to obtain the written consent  of the Commission before creating an SPC

Taxation and Fees:

• Required to pay an annual fee on or before 31st March of each year
• Failure to meet annual fee payments result in a penalty of US $250 (or part) for each month the fee was not paid

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