Looking to setting up your company in the British Virgin Islands? There's a list of requirements and considerations you'll need to know before you can set up your business in this tropical paradise.
Unlike Singapore, where businesses span across diversified industries, the business companies in the British Virgin Islands tend to stick to tourism and hospitality industries, with little diversity in businesses. However, you can register as a BVI company instead, and operate offshore while maintaining the perks of a BVI company.
Why Set Up a Company in the British Virgin Islands (BVI)?
Registering your company in the British Virgin Islands does not equate to operating solely within the territory. There are over 950,000 business companies registered within the territory, with more than 500,000 business entities offshore. These companies are often financial in nature, and reap benefits from incorporating in the British Virgin Islands.
Despite its relatively small land area, the British Virgin Islands, abbreviated as BVI, has a stable economy, and a functional governing system. The territory shows leniency towards offshore companies, which makes it a popular destination for incorporation.
The territory became a booming business hub, and a preferred place of incorporation when its government established the International Business Companies Ordinance in 1984, detailing the benefits of a BVI company, including: tax neutrality, corporate flexibility, and streamlined incorporation processing.
What is a BVI Company?
A BVI company is the term used for offshore companies registered in the British Virgin Islands. Under the BVI Business Companies Act, which replaced the International Business Companies Act, an International Business Company (IBC) may incorporate under the BVI territory, and enjoy tax and bureaucracy perks.
Most offshore companies register as BVI companies for the territory's tax haven laws, where a BVI business company benefits from low taxation requirements. BVI does not require income tax, corporate tax, or sales tax for companies operating outside the territory. There are various business structures that BVI business companies may register under, such as:
- Segregated portfolio company
- Restricted purpose company
- Company limited by shares
- Company limited by guarantee; which includes two subtypes:
- Not authorized to issue shares
- Authorized to issue shares
- Unlimited company; which includes two subtypes:
- Not authorized to issue shares
- Authorized to issue shares
Why Choose to Register as a BVI Company instead of Singapore?
Minimal to No Taxation
There are numerous advantages to registering your company as a BVI company rather than a Singapore company. However, the most sought-after perk is the low taxation requirements of the territory for IBCs. BVI operates under a Territorial Tax System, which indicates that BVI companies that operate outside the territory are not subject to taxes on:
- Income generated;
- Corporate tax;
- Capital gains tax;
- Customs tax;
- Sales tax;
- and more.
Ease of Business Incorporation
Other than taxes, BVI companies also enjoy straightforward incorporation registrations as the semi-autonomous territory is known for minimal requirements when it comes to setting up a company. Whether you plan to register a company limited by guarantee, an unlimited company, or a segregated portfolio company, the requirements are the same.
The basic requirements to register a BVI company is one director, and one shareholder. There is also confidentiality in the company details, and there is no need for a company secretary. An International Business Company does not need to file any annual reports or account audits, and annual meetings are not required to be held in the British Virgin Islands.
Offshore Company Registration Costs
While there are no taxes to be filed as a BVI company, an offshore company must renew their company registration annually, and pay a registration fee of USD 450 per registration. This keeps the company in good standing, and allows the company to operate as a business entity under the British Virgin Islands.
There is a fine line between confidentiality and secrecy - and BVI companies benefit from keeping their details confidential from the public. Details of the company's owner/s, director/s, secretary/ies, and shareholder/s are withdrawn from public eye, but can be accessed by the registered agent in BVI for reference purposes.
Keep in mind that registering as a British Virgin Islands (BVI) company automatically makes your business ineligible for perks and benefits of Singaporean businesses. BVI companies are legally considered foreign companies, and are ineligible for government grants, or other benefits meant for local businesses.
How to Register Your Business as a BVI Company
Although the British Virgin Islands are known for their ease of business processes, you will still need to register your offshore company to become a BVI company. Like many countries, the British overseas territory still maintains some conditions to be met by a potential offshore company, which can be explained in detail by a corporate services firm.
Requirements for BVI Company Registration
As previously mentioned, the basic requirements for an offshore company to register in BVI is having at least one director, and at least one shareholder. However, there are a few other requirements needed to incorporate a BVI company. The total requirements are listed below:
- One director;
- One shareholder;
- A unique business name without the words "Bank," Credit," "Care," "Fund," or "Insurance;"
- Share certificate book with signatures from two corporate directors;
- Company seal;
- Registered address;
- Registered agent.
Registering as a BVI Company
Step 1: Scout Around
Registering as a BVI company can be confusing, especially if you have no ties to the territory. There are many corporate services firms that can handle the registration of your offshore company, including application submission, and bank account opening.
Step 2: Submit the Necessary Documents
Have the company documents on hand prior to your application as doing so will make your registration process smoother. While the British Virgin Islands (BVI) prioritises confidentiality in setting up companies, it will need company details to incorporate your business such as:
- Filled-out and signed application form;
- Business plan;
- Memorandum of Association (MOA);
- Articles of Association (AOA);
- Proof of identity of company directors;
- Proof of identity of shareholders;
- Registered address of company directors;
- Registered address of shareholders;
- Registration fee.
Step 3: Pay the Fees
Once all the documents have been verified and submitted, you must pay the registration fee. The fee for incorporating a BVI company amounts to USD 450 per registration, and you must be prepared to pay this amount annually during your renewal of registration.
Step 4: Bank Account Opening
The next step is to open a bank account in BVI. The British Virgin Islands has three banks to choose from, which offshore companies can open their local bank accounts in. If you're registering through a corporate services firm, the firm may also open a bank account on your behalf.
Step 5: Annual Renewals
Lastly, don't forget to renew your registration annually. You won't need to submit any audits, financial statements, or taxes for your company, but you will need to keep your company in good standing by renewing your registration, and by paying the registration fee of USD 450.