BVI Company register

TYPE OF COMPANY FOR INTERNATIONAL TRADE AND INVESTMENT

International Business Companies (or IBCs) are companies incorporated under the International Business Companies Ordinance 1984 (as amended). This Ordinance provides for the establishment of tax exempted companies with extended privileges and contains strict confidentiality requirements. It provides for the re-domiciliation of companies from other jurisdictions in the Territory and also provides for companies to move their domicile out of the Territory, to be continued elsewhere. International Business Companies are by far the most popular and widely used type of company.

The international finance community has embraced the British Virgin Island's IBC. Since the initial passage of the legislation in 1984, the Territory has incorporated about 600,000 companies by the end of 2003. The BVI legislation has been so successful that it is considered the ideal model by many new jurisdictions seeking to establish an offshore financial industry.

Some of the more significant features and advantages of an International Business Company are:

It requires a minimum of only one founder, one shareholder, and one director (who can all be one person).
It need not appoint any operating officers
Its shareholders, directors and officers may be individuals or corporations and of any nationality.
It need not hold shareholder's or director's meetings in the British Virgin Islands.
It can hold meetings of directors or shareholders by telephone or other electronic means; alternatively, directors as well as shareholders may vote by proxy.
It need not hold an Annual General Meeting.
Its shares may be denominated in any currency and in more than one currency.
Its shares may be issued with or without par value.
Its minimum issued and paid-in capital can be one fully paid share.
Its shares may be issued for consideration other than cash.
Its shares may be issued in bearer form, transferable by delivery only (insuring complete confidentiality of ownership and simplifying the transfer of assets between parties).
If a governmental authority outside the British Virgin Islands seizes the shares, or any other interest, in the Company in connection with nationalization, expropriation, confiscatory tax, other governmental charge, etc., the Company or a shareholder may apply to the BVI court for an order that the Company disregard the seizure and continue to treat the person from whom the shares were seized as continuing to hold the shares.
The Company can buy back or redeem its own shares from shareholders and hold them as treasury shares or cancel them.
It is required to keep only such accounts and records as the directors consider necessary or desirable and these may be kept abroad.
It is not required to prepare financial statements or to appoint auditors.
It is not required to file any return of shareholders, directors or officers, although such registers may be filed at the Companies Registry if so desired.
It is not required to maintain registers of directors or officers, although such registers may be maintained at the registered office.
Its incorporation documents (Certificate of Incorporation and Memorandum and Articles of Association), which include the location of its registered office in the Territory and the identity of its registered agent, are the only documents required to be filed at the Companies Registry as a matter of public record. These documents do not contain the identity of the ultimate directors or shareholders of the Company. An IBC is not required to disclose any particular information on its letterheads.
It can amend its Articles of Association by a director's resolution passed at a board meeting called at three days notice and attended by at least 50% of the directors.
It can be incorporated within 24 hours of the receipt of instructions, if necessary. Actual incorporation documents are available from the Companies Registry within a few days thereafter.
Its name may end with any of the following words, or their abbreviations: Corporation, Incorporated, Limited, Societe Anonyme, or Sociedad Anonima (Corp., Inc., Ltd., S.A.).

RESTRICTIONS ON TRADING

Cannot trade within British Virgin Islands or own real estate there. Cannot undertake the business of banking, trust company, insurance, mutual fund and related businesses, assurance or reinsurance. However, the legislation does allow an IBC to carry on the following activities within British Virgin Islands:

make or maintain deposits with local banks in British Virgin Islands;
make or maintain professional contact with persons in British Virgin Islands;
prepare or maintain books and records within British Virgin Islands;
hold meetings of its directors or members within British Virgin Islands;
hold lease of property for use as an office in British Virgin Islands;
own a vessel(s) registered in British Virgin Islands;
hold shares in another British Virgin Islands IBC.

POWERS OF COMPANY

A Company incorporated in British Virgin Islands has the same powers as a natural person.

LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS

English.

NAME RESTRICTIONS

Any name that has already been incorporated, or is so similar as to cause confusion. Any name which in the opinion of the Registrar is considered undesirable, obscene or offensive. Any name which suggests the patronage of royalty or of the British Virgin Islands Government.

LANGUAGE OF NAME

A British Virgin Islands IBC is typically incorporated using the English language and with an English name. Provision exists for a translation of the name to be included in the Memorandum and Articles of Association.

REGISTERED OFFICE REQUIRED

Yes, must be maintained in British Virgin Islands. Typically maintained at the offices of the Registered Agent of the Company.

NAMES REQUIRING CONSENT OR LICENCE

Any name which suggests an association with the banking, trust company, insurance, mutual fund, assurance or reinsurance industry. Any name which suggests the patronage of royalty or of the British Virgin Islands government.

SUFFIXES TO DENOTE LIMITED LIABILITY

Limited, Corporation, Incorporation, Societe Anonyme, Sociedad Anonima, or the relevant abbreviations (Ltd., Corp., Inc., S.A.)

AUTHORISED SHARE CAPITAL

The normal authorised share capital is US$ 50,000 divided into shares with or without par value. The share capital may be expressed in any currency. The minimum issued capital may be one share of no par value or one share of par value. Essentially any share capital is permitted, but additional government fees apply for the use of No Par Value Shares ($50) and authorised capital over $50,000 or equivalent ($700).

CLASSES OF SHARES PERMITTED

Registered shares, bearer shares, shares of no par value, preference shares, redeemable shares and shares with or without voting rights. Nominee shareholders are permitted

BEARER SHARES PERMITTED

Yes.

DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES

No. Disclosure of the beneficial owner(s) is not required; share register may be inspected only by a shareholder. Share Register must be lodged with Registered Agent, with Bearer Shares showing a contact address.

FILING REQUIREMENTS

Only the Memorandum and Articles are required for public records. The registration and deregistration of Registers of Directors, Members, and Mortgages and Charges may optionally be filed.

TAXATION

A British Virgin Islands IBC is exempt from...

the payment of all forms of local taxation;
the payment of stamp duties for transactions in respect of its shares, debt obligations or other securities;
the payment of stamp duties with respect to all instruments relating in any way to its assets or activities.

DOUBLE TAXATION AGREEMENTS

British Virgin Islands is a party to two very old double tax agreements, with Japan and Switzerland, which were applied to the BVI through 'coat-tail provisions' of two UK treaties. (These UK treaties have now been superseded, but the old treaties technically remain in force.) The treaties are essentially never utilised. Because BVI IBC companies are exempt from BVI taxation, the concept of double taxation does not apply.

LEGAL PROTECTION OF ASSETS

Assets are protected from confiscation or expropriation orders or similar actions by foreign governments.

LEGAL SYSTEM

The BVI has an independent legal and judicial system based on English Common Law, with a right of final appeal to the Privy Council in London. Policies and legislation are developed in close consultation with the private sector. Offshore business can be carried out in a tax-free environment.

FINANCIAL STATEMENT REQUIREMENTS

The company is required only to keep whatever financial records the Directors feel are appropriate to show the financial position of the company. No filing of annual returns is required.

MEETINGS

No annual meeting is required. Any and all meetings may be held outside of British Virgin Islands and may be by telephone or other electronic means.

DIRECTORS

The minimum number of directors is one. Directors may be natural persons or bodies corporate. They can be of any nationality and need not be British Virgin Islands resident.

COMPANY SECRETARY

A company secretary is not a requirement under the Act, but a secretary can be appointed to facilitate signing obligations.

SHAREHOLDERS

The minimum number of shareholders is one. Shareholders may be natural persons or bodies corporate and of any nationality.

CAPITAL

No minimum capital is required. Shares may be issued with or without par value and in any currency as permitted by the Memorandum of Association and Articles of Association. A minimum of one share should be issued to maintain limited liability of the Directors.

THE WORLD'S MOST POPULAR OFFSHORE JURISDICTION

The British Virgin Islands is by far the most popular jurisdiction in the world for International Business Companies (IBCs).

The international financial and tax planning community can and does seek out those jurisdictions which best accomplish its various requirements. In the BVI, over 600,000 IBCs have been incorporated to date, with approximately 50,000 incorporated last year alone! The reason for this BVI preeminence in offshore company formation lies its unique combination of those factors that are most important to the diverse elements that make up the international financial community.

Some of the more important factors contributing to the success of the British Virgin Islands are:

the BVI are a British Overseas Territory, with the inherent political stability that this brings.
the BVI has been free of major political scandal, unlike many other Caribbean offshore centres.
the currency of the BVI is the U.S. dollar and there is no domestic currency whatsoever. Not only are there no currency controls, but with the US$ used as the BVI currency, it is essentially impossible for the government to regulate the money supply and hence to ever impose currency controls.
the BVI is well served by air transportation and international communications. It is in the Atlantic time zone, making it the same time as Eastern Standard Time (New York, Toronto) in the summer and one hour earlier in the winter. (There is no Daylight Savings Time in the BVI.)
although many Caribbean jurisdictions do not have actual tax treaties with the U.S. or Canada, many have, under pressure, signed some form of information sharing agreement, often under the Caribbean Basin Initiative (CBI). The British Virgin Islands has a much higher standard of living than most of the non-U.S. Caribbean; moreover, the BVI is a small country, with a very successful financial services sector. Revenues from international financial business provide the largest single contribution to BVI government revenues. Thus "membership" in the CBI, which is a form of economic assistance program but which also requires an arrangement to share financial information and records, has no attraction for the BVI.
Despite its international popularity as an offshore financial centre, the BVI does not have the high profile, attention getting reputation of other centres. It represents an ideal offshore location for clients seeking confidentiality without the 'red flags' that are often raised through the use of more well publicised centres.

IBC formation legislation in the BVI is both modern and very flexible, in fact it is the model upon which much of the other Caribbean IBC formation legislation is based. The legislation requires only one shareholder and one director (both of which may themselves be other corporations); no corporate officers are required; bearer shares are permitted; there is no requirement for an annual general meeting; the company need only keep such accounts and records as the Director(s) think appropriate. The BVI government need not be informed of the identity of the IBC's shareholders or directors. Many of the benefits of the BVI flow from this combination of a very high level of flexibility and the unquestioned confidentiality.

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