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How to register a company in BRITISH VIRGIN ISLANDS (BVI) in 2022
Since 2003, Healy Consultants Group PLC efficiently and effectively assists multinational Clients i) set up a BVI company ii) open a multicurrency corporate bank account and iii) meet the company’s legal and compliance obligations, including economic substance requirements introduced in 2019.
Popular business entities in the BVI
|Compare different BVI entities||International business company||Holding company||Fund||Limited partnership||Trust|
|Also known as||BVI business company||Parent company||Incubator hedge fund||Partnership||Discretionary trust|
|Best use of company?||All products and services||Holding and managing assets||Asset management||Professional services||Tax planning|
|How soon can you invoice local Clients/sign sales contracts?||2 weeks||2 weeks||4 months||Cannot trade locally||Cannot trade|
|How soon can you invoice international Clients/sign sales contracts?||2 weeks||2 weeks||4 months||2 weeks||Cannot trade|
|How soon can you hire staff?||2 weeks||2 weeks||2 weeks||2 weeks||Cannot hire|
|How soon can you sign a lease agreement?||1 week||1 week||1 week||1 week||1 week|
|How long to supply corporate bank account numbers?||6 weeks||6 weeks||6 months||6 weeks||6 weeks|
|How long to supply company registration/tax numbers?||2 weeks||2 weeks||2 weeks||2 weeks||2 weeks|
|Corporate tax rate on annual net profits?||0%||0%||0%||None||Cannot trade|
|Economic substance required?||Depending on business activity||Depending on business activity||Depending on business activity||Depending on business activity||Depending on business activity|
|Limited liability entity?||Yes||Yes||Yes||Yes||No|
|Government grants available?||Yes||Yes||Yes||Yes||No|
|Government approval required for foreign owners?||No||No||No||No||No|
|Resident director/partner/manager/legal representative required?||No||No||Yes||No||No|
|Local registered agent required?||Yes||Yes||Yes||Yes||Yes|
|Minimum paid up share capital?||US$1||US$1||US$20,000||US$1||US$1|
|Can bid for Government contracts?||Yes||Yes||Yes||Yes||No|
|Corporate bank account location?||First Bank||First Caribbean International Bank||VP Bank||Banco Popular de Puerto Rico||Bank of Asia|
|Can secure trade finance?||Yes||Yes||Yes||Yes||No|
|Average total business set up engagement costs?||US$16,842||US$16,842||US$26,800||Request a proposal||Request a proposal|
|Average total engagement period?||2 months||2 months||6 months||2 months||2 months|
Advantages and disadvantages of doing business in the BVI
- It is quick, simple and cheap to set up a BVI company. For example, i) government company registration costs are low ii) it is not necessary to inject any capital into the company during and after registration and iii) the certificate of incorporation is issued in one week.
- It is feasible and straightforward to maintain a BVI company. For example:
- A BVI international business company pays i) zero corporate tax on annual net profit ii) no capital gains, inheritance or death tax and iii) no tax on dividends, interest and royalties.
- There are minimal ongoing compliance requirements for a BVI company. No need to file annual returns or financial information, or undergo an audit.
- A BVI company needs only one shareholder and director. They can be any nationality, and corporate shareholders are allowed. There is no public register of shareholders and directors (although ownership information is available to regulators in the BVI and EU).
- The BVI government has responded positively to demands by the OECD and EU to clamp down on tax evasion, and was recently added to the OECD white list. The government has signed 23 tax information exchange agreements (TIEAs) with governments around the world. While these moves are unlikely to improve the BVI’s global tax haven reputation, the BVI at least enjoys a better reputation than OECD or EU-blacklisted jurisdictions.
- Establishing a new BVI company is a relatively fast and straight forward process, requiring only a few steps to incorporate.
- BVI does not impose personal income tax, capital gains tax, nor wealth tax. Although trading companies are required to pay taxes in countries where they engage in business, using a BVI intermediary holding company can create tax neutral layers in the corporate holding structure.
- BVI does not keep a public registry of shareholders and directors of companies thus providing international entrepreneurs with confidence of privacy. That said, BVI has however executed a number of tax information exchange agreements with various countries in accordance with FATF compliant AML legislation.
- A BVI IBC is an optimum corporate structure to for global IPOs. BVI companies can be listed easily on the world’s leading stock exchanges and there are no additional listing regulations under BVI law.
- BVI companies are not subject to thin capitalization, transfer pricing rules nor any capital maintenance requirements. The distribution of assets to shareholders or redemption of shares is a straightforward process provided a company maintains cash-flow and balance sheet solvency.
- Since 1 January 2019, tax-resident, locally-incorporated BVI companies, BVI-registered foreign companies and limited partnerships carrying out i) holding company activities ii) banking iii) distribution and service centre activity iv) finance/leasing business v) fund management vi) headquarters functions vii) insurance viii) intellectual property holding and ix) shipping must have an office and active director(s) or staff in the BVI.
- These Economic Substance Requirements (ESRs) significantly increase the cost, and administrative burden, of maintaining a BVI company. For example,
- Office rental costs (which average xx per square feet).
- Utility costs (which are double those in Singapore).
- Salary of a local worker for the office.
- The cost of living in the BVI is high, and if a BVI company wishes to hire expatriate staff it will need to factor in i) expatriate salary ii) expat relocation fees and iii) work permit fees.
- It can take up to 10 weeks to secure a BVI work permit for a foreign citizen.
- Since 1 January 2020, all tax-resident BVI companies undertaking the above activities must also submit a financial report to the BVI government detailing i) turnover and profit generated in the BVI and ii) expenses incurred in the BVI. Non tax-resident companies must advise the BVI government in which jurisdiction they are tax-resident by submitting i) tax registration certificate and ii) confirmation of the tax return.
- Because of the requirement to have a local office and staff, Clients with a tax-resident BVI company should budget an additional US$5,000 per month to fulfil basic government ESRs.
- It is challenging for multinational Clients to generate turnover and profits in the BVI. It is a small domestic economy dominated by tourism and finance, with little other market opportunity in other sectors, and limited local expertise outside tourism and finance.
- A BVI company carrying out banking, insurance, trust management or investment advice services must obtain a licence from the British Virgin Islands Financial Services Commission. A BVI International Business Company (IBC) cannot own property or trade in the BVI.
- Most international banks consider tax haven entities to be high risk, and do not welcome corporate bank account applications from them. In this case, Healy Consultants Group PLC recommends our Clients re-domicile their BVI company to a more reputable jurisdiction.
- Because it is challenging to open a corporate bank account for a BVI company, our Clients should expect account approval to take three months on average from the date of BVI company registration. It is likely the company directors and bank account signatories will have to travel to meet the bank before the account is opened.
- During the meeting the bank will also need to witness diligence documents from potential customers. For example i) regulatory licences ii) proof of business globally and in home country including evidence of contracts, invoices and agreements with local Clients and iii) information on our Client’s business and place of residency, including nature and volume of transactions.
- It is likely in the near future that the BVI will publish a public register of beneficial ownership of BVI companies, further eroding confidentiality.
- Securing a corporate bank account for a BVI company is extremely challenging, due to banks’ negative perceptions of BVI as an island tax haven jurisdiction. Clients should be prepared for delays or multiple rejections from banks.
Typical BVI engagement steps and timeline
Typical BVI engagement steps
- Our Client i) settles our engagement invoice ii) sends us the signed Client engagement letter and iii) submits the due diligence documents requested by our team.
- Our Client confirms the BVI corporate structure, and our team drafts a project plan to manage Client expectations.
- We email BVI company registration documents to our Client for review and signature.
- Our team i) reserves the company name with the Registry of Corporate Affairs and ii) submits all documents and information required by the Registry.
- Our banking team opens an international corporate bank account for our Client with a global top tier bank.
- If required, we secure a licence for our Client’s BVI company, for example a financial licence from the BVI Financial Services Commission.
- If required, we assist our Client to i) find a suitable office premises and ii) recruit staff to fulfil Economic Substance Requirements for a tax-resident BVI company.
Typical BVI engagement timelineStartEngagement Planning
1 weekCompany incorporation
1 weekCorporate bank account approval
3 monthsEngagement completion
1 week4 months
Additional support services
Frequently asked questions
How do I setup a financial services company in the BVIs?In order to provide financial services through a BVI Business Company, our Clients will need to get the relevant license from the BVI Financial Services Commission. Healy Consultants will guide our Clients about all the requirements for this license and assist throughout the application process.
Will I have to travel to register an offshore company in the BVIs?No. Healy Consultants does not require our Clients to travel to register a BVI offshore company.
How long does it take to incorporate a BVI Company?Healy Consultants is capable of legally completing BVI Company registration in one week.
Are there any restrictions on foreign ownership of a BVI Company?There are no restrictions. A BVI LLC can be 100% foreign owned.
What is the minimum number of directors required for a BVI Company?To complete Company Formation in the BVI only one director and one shareholder are needed. They can be the same person, or corporate body. Neither shareholder nor directors need to be resident in the BVI.
What are the advantages of setting up a company in the BVI?If properly structured, a BVI company can legitimately conduct tax-exempt international business. In addition, a BVI company is quick, east and cost-effective to set up.
What are the main disadvantages of BVI company formation?A BVI company may be perceived as a tax avoidance mechanism.
What are the minimum capital requirements for a BVI company?There are no minimum capital requirements for a BVI company.
Is a BVI Company subject to an annual audit?No, there is no need for annual reporting, accounting, or auditing with BVI Company.
Is information about the company available to the public?The Memorandum and Articles of Association are the only documents held in the public record.
Does a BVI company need a resident company secretary?No. However, all BVI business companies must have a resident agent in the BVIs. Healy Consultants will provide a resident agent for all of our Clients.
Are there any restrictions on the business activities of a BVI company?There are very few restrictions. However, activities such as banking, insurance, trust management, or investment advice services require`a license.
What documents need to be filed with BVI Company Registrar?
These documents need to be filed with the BVI Company Registrar:
- Original Cetificate of Incorporation by Apostille;
- Set of certified copies of primary documents by Notary and Apostille;
- Power of Attorney by Notary and Apostille (a professional Director has been selected);
- An original printout of the Certificate of Good Standing (CGS) from the BVI Public Register.
How long does it take to incorporate a company in the BVIs?Company incorporation in the BVIs only takes 1 week after we receive all the documents from our Client.
If I incorporate a BVI company, will there be a public record of my shareholding and directorship?No. There is no public register of company details in the BVIs. Our Clients’s confidentiality will be well protected.