BVI

The BVI (British Virgin Islands) is a British Overseas Territory in the Caribbean, consisting of a group of 4 main islands and approximately 60 smaller ones. The main island is Tortola and the capital is Road Town.

The population is approximately 30,000 of mainly African background. The country’s official language is English and it uses the US dollar as its currency.

The BVI legal system is based on English Common Law.

BVI Business company

Governing legislation

The BVI Business Companies Act of 2004, as amended.

Company registration timeframe

The incorporation of a BVI company is normally completed within one day. Should a company be urgently required, it is possible to buy a ready-made company from the shelf.

Company activities

The company may undertake any legal activity, including holding property within the BVI. The Registrar of Companies must be informed at the time of incorporation if the company intends to carry on business with residents of the BVI. Certain activities will be subject to specific licencing.

Redomiciliation

A BVI company may continue in another jurisdiction if this is allowed by the legislation of the other jurisdiction. In this case, the company will continue to be registered in the BVI until all conditions of the continuation imposed by the other jurisdiction have been complied with. At that point, the company may ask for a certificate of discontinuance to be issued and its name to be struck off the BVI register of companies. The company will then no longer be considered a BVI company.

A company registered in another jurisdiction may also continue and become a BVI company if the legislation of its own jurisdiction allows it to do so.

Information held on public record

A copy of the memorandum and articles of association of every BVI company is held by the Registrar of Companies, along with details of its registered agent and registered office address. This information is available to the public.

In addition, a BVI company is required to file a copy of its register of directors with the Registrar within 14 days of the appointment of its first director and within 21 days of any subsequent change.

As from January 2023, the names of the directors are publicly available. Details of a director’s address and date of birth may only be accessed by competent regulatory authorities or through a court order.

Share capital

The share capital may be denominated in any currency and each share may have any par value or even no par value. A minimum of one share must be issued at the time of appointing the first director and shares may be fully, partly or nil paid.

Bearer shares are not allowed.

Shareholders

The minimum number of shareholders for a BVI company is one and there is no maximum. Shareholders may be natural persons, resident anywhere in the world or companies registered in any country. Nominee shareholders are commonly used for confidentiality purposes.

Directors

Every BVI company must appoint at least one director within 6 months of its incorporation. No maximum number of directors is imposed by the legislation. Directors may be natural persons over the age of 18, resident in any country, who have not been disqualified or restricted by the BVI government from acting as directors. Another company registered in the BVI or elsewhere may also act as director of a BVI company.

The use of professional directors is possible, for confidentiality or other purposes. It is possible for the same person to act as sole director and shareholder.

Shareholder and director meetings

Meetings of the shareholders or directors of a BVI company may be held anywhere in the world and the legislation permits meetings to be held by telephone or electronic means. The shareholders are not required to hold an annual general meeting.

REGISTERED OFFICE

Every BVI company must have a registered office in the BVI. This is normally the address of the company’s registered agent. Certain records are required to be kept at the company’s registered office by law, such as the originals or copies of the registers of shareholders and directors, the directors’ letters of consent to act (originals or copies) and an imprint of the company’s common seal.

If the company has obtained any secured loans, then a register of charges must also be kept at the registered office. Failing to keep this register of charges is punishable with a fine of US$5,000.

The company may chose whether to keep the original minutes of directors’ and shareholders’ meetings at its registered office or not. If it chooses to keep these records elsewhere, then the registered agent must be informed of the address where these records are kept. Failing to do so is an offence carrying a fine of US$10,000.

None of the records kept at the registered office may be accessed by the public. These records are only available to the company’s directors and shareholders.

COMPANY SECRETARY

A BVI company is not obliged to appoint a company secretary but doing so is recommended for ease for administration. The company secretary is responsible for maintaining the company’s statutory records and safekeeping the company’s seal.

The secretary can be a natural person residing anywhere in the world or another company.

The same person may act as the company’s sole shareholder, director and

secretary.

FINANCIAL STATEMENTS

A BVI company is required to maintain proper accounting records of all its transactions, sufficient to determine its financial position at any point in time. These records may be kept at its registered office or elsewhere, generally for a period of five years. If kept at another location, the company must notify the registered agent of the exact location where these records are located.

Other than maintaining proper accounting records, a BVI company has no obligation to have its financial statements audited or filed with any government authority.

ANNUAL FILING REQUIREMENTS

Starting from 2023, BVI companies are required to file an annual return with their registered agent, which contains certain financial information. The return is due within 9 months of the end of the calendar year or the company’s financial year end.

The annual return is not submitted to the Registrar of Companies and is therefore not publicly available.

Taxation

BVI business companies are not subject to any form of tax within the BVI.

Double tax treaties

BVI business companies are not eligible for benefits under any double tax treaties which the BVI government has signed.

Economic substance

As from 1 January 2019, BVI companies are subject to economic substance regulations. Companies incorporated in the BVI, which are engaged in “relevant activities” and which are not subject to tax in another jurisdiction are required to maintain a physical presence in the BVI and to incur “adequate” local expenditure, thus ensuring that the economic substance of the activity takes place within the jurisdiction.

The list of relevant activities comprises banking, insurance, fund management, finance and leasing, headquarters business, shipping, pure equity holding, intellectual property and distribution and service centre activities (within a group of related companies).

Companies not involved in any of these activities fall outside the scope of the economic substance regulations and are therefore not required to maintain any local physical presence.

Company closure

A company will be struck off the register if it fails to pay its annual government licence fee. In the past, the company would have been dissolved 7 years after being struck off. However, following amendments to the legislation introduced in 2023, the company is dissolved immediately on the date when the Registrar of Corporate Affairs publishes a notice of striking off in the Gazette.

Once dissolved, it is possible for the company to be reinstated by submitting an application to the Registrar within 5 years.

A company may also be dissolved through voluntary liquidation.

ALTERNATIVE OPTIONS

You may wish to consider Nevis as a possible alternative to setting up a company in the BVI.