Corporate Tax Residency

The British Virgin Islands (BVI) is for decades one of the leading jurisdictions for offshore company formation. The jurisdiction is suitable for company formation and is less known for its local banking sector. Incorporation in the BVI is the first and crucial step into obtaining local corporate tax residency. BVI offshore companies and International Business Corporations are restricted from doing business or owning property locally. These legal persons however must maintain a registered office and registered agent locally. Further substance and presence in the BVI is often needed to establish the place of effective management and jurisdiction.

Personal tax residency is connected with physical presence and the individual vital interests of the natural person involved. A growing number of countries impose a tax levy on the world wide income of the individual. Personal taxation, regardless of the location of the company, mostly applies to substantial corporate interest, segregated or shielded private property, dividend and capital gains. As such, the choice for corporate tax residency requires strategize and professional planning.

Corporate tax residency leads to local taxation. Offshore financial centers may provide qualifying offshore companies and International Business Corporations with limited reporting requirements and a tax exempt status. BVI offshore companies and International Business Corporations are required to maintain management accounts to appraise the financial position of the business at any moment in time. Yet, contrary to traditional financial centers, there is no requirement for an official audit by a qualified accountant.

Location independent professionals and other business people often set up a BVI offshore company or International Business Corporation for the benefits corporate tax residency delivers. Especially in the start-up phase, global entrepreneurship requires effort and determination. Distractions and other time-consuming peripheral matters should best be minimized. Therefore, strategizing for success is mission critical.

British Virgin Islands (BVI) Corporate Tax Residency

Legitimate corporate tax residency requires appropriate planning and structure. Negligence and even mistakes can result in personal liability. Liability in tax matters can result in public actions against the tax subject and unfortunate criminal proceedings. As such, the price of missteps is high and BVI company formation needs more than just the incorporation alone.

BVI corporate tax residency begins with the incorporation of the legal entity. Registration agents and corporate service providers are the first line of defence to keep the jurisdiction free of undesired activities and unwanted natural persons. Customer due diligence and Know Your Client (KYC) procedures ensure the protection of the local corporate registry in the BVI.

The structure of the BVI offshore company must include sufficient substance and presence to safeguard its local position leading to corporate tax residency. Nominee services can strengthen this position. Other local activities include the management of the online corporate environment, marketing and IT.

For more information on BVI corporate tax residency and to incorporate without the hassle, please complete the contact form below.

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