The popularity of the British Virgin Islands as an offshore jurisdiction in which to incorporate a company has rocketed since the passing of the initial BVI International Business Companies Ordinance back in 1996.
Regulation changes relating to the incorporation of offshore and onshore companies came into effect in the BVI last year and since then the number of companies incorporated in any one year has reached record levels and today over 700,000 companies have been set up in the British Virgin Islands. In this article we examine the popularity of the tax haven.
The British Virgin Islands as a whole is a secure, politically and economically stable jurisdiction with a flexible, mature and business minded government committed to the sustainable development of the offshore sector as a whole.
The British Virgin Island government’s commitment can be seen best in light of the fact that the BVI has been one of the most successful offshore tax havens to market itself – according to offshore specialists The Sovereign Group “many other jurisdictions offer a similar, and sometimes superior, product, but nowhere has marketed itself as well as the BVI”.
The original BVI International Business Companies Ordinance from 1996 allowed for the incorporation of relatively basic company structures with restrictions relating to companies entering into business locally in the BVI. In 2005 significant changes were brought in to overhaul the entire offshore/onshore company law and the BVI Business Companies Act (BVI BCA) of 2005 was enacted and is being brought into full effect over a transitional period of two years.
The Act covers the incorporation and operation of both internationally focused companies and those choosing to do business onshore within the British Virgin Islands. The simplification of the Act led to record numbers of incorporations last year with over 57,000 IBCs incorporated under the old act and over 1,100 incorporated under the terms of the new BVI BCA.
The main benefits of incorporating in the British Virgin Islands is that an IBC pays no local taxes, shares can be barer or registered, neither the details of shareholders nor directors need appear on public files and no annual accounts or returns need to be filed.
