Benefits and problems of registering a company in BVI in 2023
Benefits of BVI company registration
- BVI company registration is cost-effective and straight forward. There are no minimum capital requirements and the process can be completed in one week;
- BVI has one of the most flexible offshore corporate structures available to international business people because:
- BVI government has implemented a 0% tax rate on corporate taxes for offshore entities;
- There are no statutory requirements for a BVI offshore entity to state its company’s objectives or its legal structure;
- There are no mandatory requirements for filing of company’s audits, taxes or financial information.
- Only one director and one shareholder is required for registering a BVI company. Corporate shareholders are permitted, and shareholders and directors can be of any nationality;
- BVI was recently added to the OECD white list after complying with various OECD guidelines, and signing 16 tax information exchange agreements (TIEAs). The BVIs therefore benefit from a strong global reputation;
- A company in the BVIs is an excellent way for entrepreneurs to legitimately book tax-exempt international profits;
- There are minimal maintenance requirements following registration of a BVI company. These entities are not required to submit annual financial statements or tax returns to BVI authorities;
- Healy Consultants can open corporate bank accounts around the world to support BVI business registration. Healy Consultants works with world class banks such as HSBC, Standard Chartered, and Citibank;
Problems with BVI company registration
- A BVI Business Company is not permitted to own property or trade in the BVI;
- Certain activities to be undertaken by a BVI company require a license (e.g. banking, insurance, trust management, or investment advice services). For more information on BVI licensed business activity regulations, visit the British Virgin Islands Financial Services Commission;
- BVI’s economy is largely dependent on tourism and financial sector. As a result, any entrepreneur willing to invest in an avenue other than these is likely to face numerous hurdles in the BVI market, such as i) lack of quality workforce for their required business as well as ii) an inadequate consumers base for their products, resulting in a poor market penetration.
- Effective 1 January 2020, BVI requires new and existing companies with relevant activities (trading companies, holding companies, fund management companies, financing and leasing companies, IP holding companies, shipping companies and banking and insurance companies) to state whether they are tax resident in the BVI. If the company decides to be tax resident, such business required to have i) active directors / or ii) staff and physical office in BVI, and iii) submit an annual financial report to the BVI Government re local turnover, profits and expenses incurred within the BVI. If not tax resident, the company will need to confirm jurisdiction of tax residency and provide supporting documents including i) tax registration certificate and ii) tax return confirmation;
- Effective 1 January 2019, locally-incorporated BVI entities, foreign entities registered in BVI and limited partnerships engaging in i) holding company activities ii) banking business iii) distribution and service centre business iv) finance and leasing v) fund management vi) headquarters business vii) insurance viii) intellectual property holding and ix) shipping are required to employ local staff and lease a physical office.
Best uses for a BVI company
- The BVIs are a great jurisdiction to establish an offshore entity to book global profits while minimizing tax. While a BVI BC does not have to pay corporate tax on its global profits, our Client’s income through a BVI BC may be subject to personal income tax in the country of residence. Healy Consultants can advise our Clients regarding their tax compliance responsibilities.
- Our Clients interested in establishing a financial services company choose BVI thanks to i) transparent laws and regulations imposed by the BVI Financial Services Commission ii) easy company setup procedures iii) transparent tax laws iv) good reputation amongst popular offshore jurisdictions and v) good infrastructure available for Fund Managers.