BRITISH VIRGIN ISLANDS
BRITISH VIRGIN ISLANDS
British Virgin Islands (BVI) is a British dependency located in the Caribbean. BVI is
one of the most popular offshore jurisdictions for company formation. The
company law system is based on British law but with great flexibility in terms of
filing requirements.
International Business Companies (IBCs) registered in BVI are private limited
companies offering the “Zero tax base” (no tax on profits).
History and Government
Legal System
The British Virgin Islands is a British protected
territory and a member of the British
Commonwealth of Nations. It became selfgoverning in 1967 and has a democratically
elected Legislative Council comprising the
Governor, the Attorney General and four
Ministers drawn from the Legislative Council.
The legal system is based on the English
Common Law. The judiciary are appointed by
the Territorial Government. The ultimate
appellate court is the Privy Council in London.
Geography
The British Virgin Islands is a group of more
than forty islands situated in the Caribbean
approximately sixty miles east of Puerto Rico.
It is one hour ahead of United States Eastern
Standard time and is connected by numerous
daily flights to San Juan in Puerto Rico. San
Juan is an international junction with direct
flights to the United States, South America and
Europe.
CHARACTERISTICS OF A BRITISH VIRGIN ISLANDS IBC
Governing corporate legislation
The BVI Business Company Act 2004, (the “ACT”) as amended
The regulations governing availability of names
The words “Limited”, “Corporation”, “Incorporated”, “Societe anonime”, “Sociedad
anonima” or the abbreviation “Ltd.”, “Corp”, ”Inc”, or “SA” must be a part of the name
of every company incorporated under the Act. No company shall be incorporated under
the Act with a name that is identical to a company already in existence or which closely
resembles an existing name. Words such as “Assurance”, “Bank”, Building Society”,
“Royal”, “Trustee Company” etc. will require justification.
Documents filed on incorporation
Memorandum and Articles of Association
Are details of the beneficial owners disclosed
Not on public record
Minimum and maximum number of shareholders
A company may be formed without shareholders although at least one shareholder will
be required upon commencement of business. There is no maximum number of
shareholders provided by the Act.
Standard authorized capital
Companies are normally incorporated with $50,000 to qualify for the lowest annual
license fee of $350.
Classes of share capital
Share capital may be divided into different classes. “No par values” shares may be
issued as may redeemable shares, bearer shares, etc.
If bearer shares are issued they must be held by an authorised custodian.
Denomination of share capital
Share capital may be denominated in any recognized hard currency.
BRITISH VIRGIN ISLANDS
Time-scale for incorporation and availability of ready-made companies
Usually 48 - 72 hours are needed and ready made companies are generally available
Capital taxes
None
Residency requirements on shareholders or shareholders meetings
There are no residency requirements on shareholders or their meetings.
Information published relating to shareholders
The company must keep a share register at the registered office address. This is
available for inspection by the members. There is an optional register of members
maintained by the Registrar of Companies.
Minimum and maximum number of directors
A company may be registered without directors. However the 1st Director must be
appointed within 6 months of incorporation. Sole directors are allowed and there is no
statutory maximum although the articles may impose a limit. Corporate directors are
permitted and there are no nationality or residency requirements.
Nature of the power of directors
The directors have all the power of the company that are not reserved to the members
under the Act or in the memorandum and articles.
Conclusion of contract on behalf of the company
A contract required to be executed in writing and under seal may be entered into by or
on behalf of the company in writing under the common seal of the company. A contract
required by law to be in writing and signed by the parties may be entered into by or on
behalf of the company in writing and signed by a person acting under the express or
implied authority of the company.
Appointment and removal of directors
The first directors are elected by the subscribers to the memorandum and thereafter
the directors are elected by the members. Where permitted by the memorandum and
articles the directors may also elect directors for such term as the director may
determine. A director may be removed from office by resolution of members or by
resolution of directors.
Director meetings
The directors may meet at such times and in such manner and places within or outside
the BVI as the directors may determine to be necessary or desirable. Telephone and
other electronic meetings are permissible.
Information published relating to directors
You can register both the Register of Members and Directors on public record if you so
elect.
Must accounts be prepared by the directors?
A company incorporated under the Act shall keep such accounts and records as the
directors consider necessary or desirable in order to reflect the financial position of the
company. The accounts do not have to be audited or filed with the financial authorities
of BVI.
Must the company have a registered presence in the territory of incorporation?
Yes. A BVI IBC must have at all times a registered office and a registered agent in the
BVI.
What records must be maintained in the territory and are they available for public
inspection?
A share register and an imprint of the common seal of the company must be
maintained at the registered office of the company. Other records such as minutes of
meetings of directors, members and copies of all resolutions may be kept at such
places as the directors determine. These are not available for public inspection.
What are the limits placed on the company’s borrowing powers?
None. There are no debt / equity ratios under the law.
Is there a register of company charges?
A company may maintain at its registered office a register of mortgages, charges and
other encumbrances. Similarly, a public register may be maintained at the option of the
company.
Company seal
A company incorporated under the Act shall have a common seal.
Limitation on company to contract
The capacity of a company to contract is limited by the doctrine of ultra vires. Doctrine
of ultra vire applies to a corporate body, so that any act done by the body which is
beyond its capacity to act will be considered invalid.
Third party protection
The directors, officers and agents of an IBC are required to act honestly and in good
faith and to exercise the care, diligence and skill of a reasonably prudent person. No
provisions in the Memorandum or Articles or the Act relieve a director, officer or agent
of the company from the duty act in accordance with the Memorandum or Articles or
from any liability arising from his management of the business and affairs of the
company.
Service of writs
Effected at the company’s registered office.
BRITISH VIRGIN ISLANDS
Procedure for authentication of documents and contracts
A document requiring authentication or attestation by a company incorporated under
the Act may be signed by a director, secretary or an authorized officer or agent of the
company and need not be under its common seal. If the signature of any director,
officer or agent authenticating or attesting any document is verified in writing by the
registered agent of the company, the company is bound by the document.
Information required to register a British Virgin Islands IBC
1.
Certified copy of the passport of each beneficial owner by either a
lawyer or a notary public or a bank.
2.
Bank reference for each beneficial owner or a professional reference
letter by a lawyer or an accountant.
3.
A recent copy of utility bill (not more than 6 moths old water or
electricity bill) that verifies home address of each beneficial owner
4.
Personal details:
Full name;
Address – business and private;
Nationality;
Occupation;
Telephone and telefax numbers (private, home and mobile);
E-mail.
Corporate Documents
The corporate documents that are delivered to the shareholders of a
British Virgin Islands IBC are as follows:
§ Certificate of Incorporation;
§ Memorandum and Articles of Association;
§ A certified copy of the resolution appointing the first Director;
§ A certified copy of the first minutes of the Board of Directors;
§ Share certificates;
§ Company’s seal.