The British Virgin Islands (“BVI”) are a group of 40 islands and islets located in the Caribbean east of the Island of Puerto Rico.
The resident population is of approximately 35,000 the majority of which lives in the island of Tortola, where the capital of Road Town is situated.
BVI is a British Crown Colony with its corporate law based on the English Common Law and has an excellent reputation of political stability.
Highlights of BVI BC companies
The BVI Business Companies Act, 2004 (“BC Act”) came into force on January 1st, 2005, to replace the International Business Companies Act, 1984 and the Companies Act (Cap 285).
The following types of companies can be incorporated under the BVI BC Act:
- Companies Limited by Shares
- Companies Limited by Guarantee
- Companies Limited by Guarantee Authorized to Issue Shares
- Unlimited Companies with or without Shares
- Restricted Purposes Companies (or SPVs)
- Segregated Portfolio Companies (or SPCs)
- Limited Partnerships (LP)
Name: BC names must contain the words Corporation, Incorporated, Sociedad Anónima, Societé Anonyme, Limited, or their abbreviations.
Chinese names together with their English translation can be registered in the BVI.
Numbers are permitted as part of the company name as well as foreign characters.
The name must not include words such as bank, insurance, assurance, reinsurance, trust, trustee, cooperative, royal, imperial, municipal, chartered, building, chamber of commerce, securities, fund, or their derivatives, without a written approval of the Registrar and a special license, where required.
A company name can be verified with the Registrar online.
Registered Office/Agent: All companies must apply to the Registry for incorporation by filing a Memorandum and Articles of Association, duly signed by the proposed as incorporator registered agent.
EveryBC must have a Registered Office and a qualified Registered Agent in the BVI.
Number and Classes of Shares: The “authorized capital” and “share capital” concept, as we know it, no longer exist under the BVI BC Act.
The BVI BC Act specifies the requirement for the Memorandum to state the maximum number of shares that the company is authorized to issue.
BVI BC’s are not required to specify the par value of its shares or the currency; however, clients may request this option.
All companies must state the classes of shares they are authorized to issue, and, if the company is authorized to issue two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each share.
Bearer shares must be held in custody.
According to one of the amendments of the BVI BC Act, since December, 31st 2009 all bearer shares which have not been placed under an official and authorized custody, will be considered as disabled, thus the holders of such shares will not be able to exercise any right over the company such as the right to vote or to receive dividends, nor will be able to transfer the company.
Shareholders: A minimum of one (1) shareholder is required. Corporate or natural shareholders are permitted.
No details of the shareholders appear on the public register but a register of shareholders must be kept at the registered office of the BVI Company.
The registers of shareholders must include the following information:
- Names and addresses of the shareholders (registered shares)
- Number of each class and series of registered shares held by a shareholder
- Number of each class and series of bearer shares held by a shareholder
- Information with respect to bearer share certificates, including the name and address of custodian
- Date when name of each member was entered in the register
- Date when any person ceases to be a member
Directors / Officers: The registered agent must appoint the first director within 6 months of the date of incorporation of the company.
A person shall not be appointed as Director unless he or she has consented in writing to be a director.
A company shall have one or more directors and the number of directors must be specified in the Articles of the company.
The Register of Directors shall be filed with the Registrar within the 21 days of the appointment; this information is not available for public inspection.
Where a company has a sole member acting as the sole director, that person can appoint a Reserve Director who will become the director of the company upon the death of the sole director.
The Reserve Director must consent in writing to act as director.
Records and Underlying Documentation: StartingfromJanuary, 15th 2016 all companies shall keep records and underlying documentation for a period of at least five (5) years.
In case the records and underlying documentation are kept in a place different from the registered agent’s office, the registered agent shall be informed about the physical address where the records and underlying documentation are kept and the name and address of the person responsible for their custody.
The registered agent shall be informed in a period of no more than 14 days about any changes in this information.
The records and underlying documentation shall show and explain the company’s transactions and allow the financial position of the company to be determined accurately.
The penalty for not fulfilling this requirement is of US$50,000.
Register of Beneficial Owners: Since June 2017 the BVI Government enacted the Beneficial Ownership Secure Search System Act, 2017 (“BOSSs Act”) which creates a secure system for effective, efficient, and confidential storage of information regarding the beneficial owners of companies registered in the British Virgin Islands.
Continuation: The BVI BC Act establishes that a company, which desires to continue its operations under the jurisdiction of the BVI, will have to file satisfactory evidence that the law of the foreign country allows the migration of the company.
Economic Substance Act: The BVI (“the British Virgin Islands”), along with other major offshore jurisdictions, introduced the Economic Substance Law.
The BVI Economic Substance (Companies and Limited Companies) ACT, 2018 came into effect on January 1, 2019.
Companies incorporated as of January 1, 2019, must comply immediately with the law.
The transition period extended until June 30, 2019, to entities established before January 1, 2019.
This in response to the various efforts of the European Union (“EU”) and the Organization for the Economic Cooperation and Development (“OECD”) to improve fiscal transparency.
Taxation & Fees
BCs are exempt from all taxation on capital gains, corporate earnings, personal income, sales, inheritance or dividends, except for an annual license fee of:
- US$450 if on the annual fee payment date
- The company is authorized to issue no more than 50,000 shares.
- All the shares of the company have a par value, and
- The company is prohibited by its Memorandum from issuing bearer shares;
- US$1,200 if either or both of the following apply to the company on the annual fee payment date
- The company is authorized to issue more than 50,000 shares, or
- The company is not prohibited by its Memorandum from issuing bearer shares; and
Annual License Due Date and Penalties After the First Year of Incorporation
|DATE OF INCORPORATION||ANNUAL LICENSE DUE DATE||10% SURCHARGE||50% SURCHARGE||STRUCK-OFF FROM REGISTRY|
|JAN 1 – JUNE 30||31-may after the first year||JUNE 1 – JULY 31||AUG 1 – OCT 31||1-nov|
|JULY 1 – DEC 31||30-nov after the first year||DEC 1 – JAN 31||FEB 1 – APR 30||1-may|
Information contained in this publication does not constitute any kind of advice on any particular matters and should not be considered as such.
OMC Group accepts no responsibility for clients’ decisions. LR_MR_0421
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