The offshore financial industry allows international business people and entrepreneurs to work where they want, when they want and how they want under the umbrella of a reliable legal entity. The British Virgin Islands (BVI) is such an offshore jurisdiction. It provides an efficient administrative, fiscal and legal framework for the incorporation and maintenance of International Business Corporations, holding companies and other legal structures.
Company in the BVI is friendly and inviting for non-resident businesses with a global character. The corporate environment is particularly suitable for holding companies, consultants with assignments in different countries and virtual entrepreneurs. Although the local corporate legal environment in the BVI provides international business with flexibility and protection, the applicable laws have no legal standing outside the BVI and in other jurisdictions. As such, there can always be a conflict of laws or civil disagreement for BVI companies when they enter different territories and legal jurisdictions.
For any international company, local regulation is not internationally enforceable. It follows that applicable company law in offshore jurisdictions limits the administrative requirements for the company. An example is that BVI companies at any time must be able to demonstrate its financial status by maintaining up to date management accounts. Financial institutions in EurAsia and the USA may want additional safeguards to verify the legitimacy of the BVI offshore company and its activities by requested audited financial statements.
The corporate structure of a BVI offshore company or International Business Corporation is straightforward. The company is a separate legal entity, detached from its shareholders and the people working for the company. Incorporation in BVI requires the use of a local registered agent and the arrangement of a local registered office address. Share capital is the risk capital of the company when the BVI offshore company is limited by shares. To complete the incorporation procedures in the BVI, the memorandum and articles of association must be published. These documents describe the internal organization of the BVI company, its applicability and the framed activities it is allowed to engage in. Other important documents to demonstrate the standing of the company are the certificate of incorporation, the certificate of good standing and the certificate of incumbency.
BVI offshore company formation and incorporation changed over time. Tax evasion, anti-money laundering and counter terrorism financing (AML-CTF), and the general protection of the global financial system gained altitude. Enhanced and periodic Know Your Customer (KYC) regulation, administrative compliance, and other protective measures must be considered during incorporation and to maintain the BVI company. The good standing of an offshore company is these days mandatory to maintain financial services and most other services.
The growing importance of financial compliance triggered a clean-up of the BVI as a center for incorporation. Obscure activities and illicit actors do not prioritize the jurisdiction anymore for its place of incorporation while the current pricing level leaves incompetent market players and hobbyists out. The result is that the BVI gained further momentum as a jurisdiction for professional international business.
Company formation in the BVI is governed by the Business Companies Act. This new legislation complies with international codes of conduct on business taxation, AML-CTF frameworks, and savings tax directives. The act is complemented by local BVI laws that combine common law, equitable principles and other local legislation.
The name of BVI offshore companies and International Business Corporations is reserved for the initial founder. Since offshore companies are registered for one year only, they can be struck of the corporate registry when the company is not renewed. Renewal is only possible when annual government fees and all other disbursements are paid. A company that is struck of the corporate registry can be reactivated. The restoration application requires the dormant company to pay all outstanding fees and penalties. This may become a vigorous price tag. Therefore, incorporation in offshore jurisdictions like the BVI needs special consideration and appropriate business planning.
BVI incorporation can be fast and flawless when procedures are followed, and compliance is part of the business plan. To avoid legal and administrative challenges and promote sustainability and profitability we help professionals new to the BVI or offshore financial industry to make the right choices and comply permanently. Contact us via the form below for further information and BVI incorporation services.