The new British Virgin Islands rules came into force from the beginning of 2019, but there was a transition period for companies that are already operating— it lasted until December 31, 2019.
Set up company
During that time, the company had to either start working a real business or liquidate the «technical» business on the BVI, or annually prove tax residency in another country (except for countries from the EU blacklist), as well as pay tax on income received in other countries. Since 2020, companies that do not conduct real business on the Islands will not be able to obtain BVI tax resident status.
According to the law, the company’s employees must be located in the territory of the jurisdiction, their number and qualifications must correspond to the company’s activities, they must have suitable premises and equipment, and an adequate level of costs. However, it is too general information— it is not clear what costs will be considered adequate and how the new rules will be applied.
Why set up a company in British Virgin Islands
The BVI do not have a minimum set amount of authorized capital. As a general rule, the authorized capital must consist of 50,000 shares with a nominal value— this is the maximum number of shares to pay the minimum annual fee.
The share capital can be expressed in any currency. The minimum number of issued shares is one share with no par value or one share with a par value.
The following types of shares may be issued: registered shares, shares without par value, preferred shares, shares with the right to redeem, shares with or without the right to vote.
Ways to register company in British Virgin Islands
If you are registering a business company in the BVI for a real business with a possible subsequent move to the Caribbean, then you will need both an account and a company in the British Virgin Islands. Remember that in the BVI, companies for offshore and local businesses work on the same terms.
Naturally, if an account is opened for a local business, the bank will be more favorable. You can also explain that you are opening an investment account for savings. Banks in the British Virgin Islands will also be happy to open such an account. However, if it is an account for active business, then you will have to explain that you want to connect the account, for example, to a corporate Paypal, and for this, the bank account and the company must be from the same jurisdiction.
You can also say that you value the trust of your customers, as well as a positive image, and therefore you want both the account and the company to be in the same jurisdiction. In your opinion, this will help potential customers see your company as a regular BVI company, not an offshore one. Here everything depends on your goals, your tax residency, and the tax residency of your clients, as well as the cost of goods and services.
Company types you can register
There are several types of companies that can be opened in the British Virgin Islands: joint—stock companies, companies with limited liability, which does not allow the issuance of shares of a limited liability company with the right to issue shares, companies that do not have the right to issue shares of the company authorized to issue shares.
The main act that regulates the way a company is organized, managed, or liquidated is the BVI Business Companies Act.Atrium Business Solutions
In accordance with this, a limited liability company has its capital divided into shares. This type of company must have at least one member and at least one member after registration. The liability of participants is limited to the amount paid from the share they own or the specification in the foundation agreement. Managing this type of company, there must be at least one manager, a resident of the British Virgin Islands, or a foreigner.
A limited liability company is not authorized to issue shares, members must contribute to the company’s assets. Upon liquidation, the contribution is returned in the amount financed and specified in the constituent agreement. In addition, the Memorandum of Association must specify the name and address of the company, that a limited liability company cannot issue shares and the name and address of the registered agent of the company. The general meeting makes the main decisions of shareholders, and each member of the company has the right to vote.
A limited liability company has the right to issue shares if it consists of two types of elements: at least a guarantee of members and shareholders. The fact that a limited liability company has the right to issue shares must be specified in the Memorandum of Association, which must also provide amounts, guarantees, and details regarding the issued shares.
Limited purposes of a company must respect certain conditions before starting an economic activity: first of all, it must be a limited liability company, and the memorandum must contain the reasons why this company is registered and the fact that it is a limited liability company. The articles of incorporation cannot be changed concerning the status of a limited liability company.
Requirements for companies
Now the BVI has clarified that the company can be recognized as economically active if it receives income from its activities during the year. The rules also divide the concepts of «joint-stock holding» and «holding business». The first type of BVI companies is the business that owns only shares in the capital, and the BVI requirements do not apply to it. But if the holding company has other types of investments— for example, it issues loans to finance another company or buys bonds – it will have to confirm the reality of doing business.
The rules provide for exceptions. For example, investment funds and companies that provide individual loans or own private yachts, as well as those engaged in sea transportation (if this is not the main business), will not have to confirm their activities. There are also allowances— for example, you can count as employees who work in other companies that provide business services on BVI.
In addition to the company name, it is assigned a number, for example: BVI Company Number 4589658.Atrium Business Solutions
1. Documents that provide information about:
- beneficial owners.
2. Information about the planned activity. This is a kind of pre— business plan provided in a free form.
- a copy of the applicant’s passport or another identity document;
- copies of documents confirming citizenship and address of residence;
- bank reference.
Legal entities provide:
- a copy of the company’s registration certificate;
- copies of constituent documents (Charter and Foundation agreement).
Benefits to open company in British Virgin Islands
It should be noted that the BVI has always positioned itself as an «open-to-dialogue» jurisdiction in terms of sharing tax information (in the absence of any tax or other information issuance practice so far), in which you can store your assets without worrying about anything or register companies for international business and use all the benefits.
Quick and easy offshore company formation in British Virgin Islands
If you establish a new company, then you will start a business «from scratch», using a new name that you can choose yourself (if it is free, of course, and does not contradict ethical rules), open a bank account.
Often the company is needed urgently, and in this case, you will be able to buy a ready-made company on the BVI. You get an active company immediately, therewith the registered company has not previously performed any operations and does not have any debts or obligations.