Offshore Company Formation - BVI

Background

First inhabited by Arawak and later by Carib Indians, the Virgin Islands were settled by the Dutch in 1648 and then annexed by the English in 1672. The islands were part of the British colony of the Leeward Islands from 1872-1960; they were granted autonomy in 1967. The economy is closely tied to the larger and more populous US Virgin Islands to the west; the US dollar is the legal currency.

The economy, one of the most stable and prosperous in the Caribbean, is highly dependent on tourism, generating an estimated 45% of the national income. An estimated 820,000 tourists, mainly from the US, visited the islands in 2005. In the mid-1980s, the government began offering offshore registration to companies wishing to incorporate in the islands, and incorporation fees now generate substantial revenues. Roughly 400,000 companies were on the offshore registry by yearend 2000. The adoption of a comprehensive insurance law in late 1994, which provides a blanket of confidentiality with regulated statutory gateways for investigation of criminal offenses, made the British Virgin Islands even more attractive to international business. Livestock raising is the most important agricultural activity; poor soils limit the islands' ability to meet domestic food requirements. Because of traditionally close links with the US Virgin Islands, the British Virgin Islands has used the US dollar as its currency since 1959.

Banks maintain accounts in U.S. dollars and pounds sterling. Barclays Bank PLC, the Bank of Nova Scotia and Chase Manhattan Bank NA are the international banks operating in the BVI.

The Islands have become the world's fastest growing offshore corporate centre.

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The formation and operation of BVI Business Companies, (hereinafter referred to as "BVIBC") in the British Virgin Islands, are matters that are basically governed by the BVI Business Companies (Amendment) Act, 2005 (the “amending Act”).

Among the salient features and advantages of an BVIBC one may find:

1. Generally, income, including among others, dividends, royalties, capital gains and rents, of an BVIBC incorporated by non-residents are tax exempt and no annual tax returns or other type of financial information needs to be filed with the authorities in the British Virgin Islands.
2. One or more persons of any nationality may act as Directors, and the original Directors and changes in the Board of Directors need not be registered.
3. Companies may be Directors.
4. There is no need to hold annual meetings of Directors or Members (Shareholders) in the British Virgin Islands and Directors or Members may attend meetings personally, by proxy, by phone or other electronic means.
5. No payment or deposit needs to be made in the British Virgin Islands on paying-in the capital of a company.
6. There are practically no restrictions regarding objects of an BVIBC and hence they can engage in any type of lawful business (save for trust or insurance activities).
7. An BVIBC may change its domicile to, or continue in, another jurisdiction and have offices in other countries.