BVI Company Formation Cost
|Company registration including government fees
|Registered address for 1 year
|Provision of professional shareholder for 1 year
|Provision of professional director for 1 year
|Annual renewal fee
BVI company types and regulation
Formation of companies in the British Virgin Islands is governed by the BVI Business Companies Act, 2004 (“the Act”), under which the following types of business companies (“BC”) can be set up for international trade and investment
- a company limited by shares;
- a company limited by guarantee that is not authorised to issue shares;
- a company limited by guarantee that is authorised to issue shares;
- an unlimited company that is not authorised to issue shares; or
- an unlimited company that is authorised to issue shares.
Using the above company types, you can also set up a restricted purposes company (SPV) or a segregated portfolio company.
The regulating authority is the Financial Services Commission which is responsible for the sector of financial services in the British Virgin Islands.
Details you need to know about formation in the BVI
All companies formed in the BVI must have a local registered office which can be the address of the company’s registered agent (there are about 70 registered agents in the BVI regulated and licensed by the Financial Services Commission, the list is available on the FSC web site).
BVI companies are not subject to income or other taxes, irrespective of the source of income. The only exception is the salary tax imposed on companies engaging local employees. However, the companies pay annual fee depending on the amount of the company’s capital (for instance, the annual fee for companies having the capital of up to $50,000 is $350, and for companies the capital of which exceeds $50,000 – $1,100).
There must be at least one director (whether individual or corporate, resident or not), and the first director(s) must be appointed within 6 months following incorporation. Details of directors (including the names and addresses, dates and appointment and removal/retirement) shall be recorded with the register of directors to be kept at the company’s registered office.
Companies formed under the British Virgin Islands BC Act are required to keep at the office of their registered agent (apart from the M&AA):
- original or a copy of the register of members (any updates to which are to be notified to the registered agent within 15 days)
- original or a copy of the register of directors (any updates to which are to be notified to the registered agent within 15 days)
- other records, such as minutes of meetings and resolutions of members and directors, etc.
Where a company keeps original registers of members and directors at another place, it must notify the registered agent of the physical address of the place where such registers are kept, and of the person keeping such registers.
Any failure by a company to comply with the above requirements constitutes an offence and exposes the company to a fine of $10,000.
However, it should be noted that the register of directors and the register of members are not public (unless the company chooses to make them public), which brings us to another sensitive point of discussion, considering all and any new regulations for disclosure of persons having significant control over the company, and namely, what information is open to public in the BVI.
Confidentiality: what’s on public register in relation to companies set up in the BVI
No public record is maintained as to the identity of shareholders or directors. Public records of Business Companies consist only of the Certificate of Incorporation, Memorandum and Articles of Association, name and address of the registered agent, the record of payment of the annual fees, amendments to the Memorandum and Articles of Association or agreements concerning arrangements, mergers or consolidations, winding-up or dissolution of a BC. Optionally, the public record may contain other document as the company may wish to place there, such as a Register of Mortgages, Charges and other Encumbrances, Registers of Directors, Registers or Members, and Registers of Officers, but these are not obligatory. They are filed at the sole option of the Company.
In June 2017, a new law was enacted in the BVI introducing the Beneficial Ownership Secure Search System which provides for creation of a register of beneficial owners accessible only by authorized persons. The law obliges the registered agents to collect information on beneficial owners of BVI business companies and upload the same to the BOSS System.
The law requires that any BC identify any person who is a beneficial owner and notify the registered agent thereof within 15 days. The following details of beneficial owners must be included in the database: full name, residential address, date of birth, nationality.
Penalties for a failure to comply with the above provisions (including provision of any false information) may even reach the amount of $250,000 and/or imprisonment for a term of 5 years.
What is important is that the beneficial owners database is not public; access to the information is allowed only to persons designated according to the Exchange of Notes Agreement entered into with the UK. Thus, the agreement operates only between the British Virgin Islands and the UK. More details can be available from the text of the Beneficial Owners Secure Search System Act, 2017.
The said obligation of the registered agent to collect information on beneficial owners in no way restricts or affects its separate obligation to collect and verify information on beneficial owners stipulated by the anti-money laundering laws of the British Virgin Islands.
Nominee Services for BVI BCs
Apart from the company formation services, we also provide nominee directors and nominee shareholders for BVI companies.
Provision of nominee services (essentially, the trust business) is regulated by the BVI Financial Services Commission, and, currently, about one hundred companies have corresponding trust license (including us), however, quite no one offers nominee directors or shareholders residing in the BVI. Nevertheless, it is possible to order the services of professional directors and shareholders, though recently, the requirements to the client’s compliance documents have grown significantly. Nominee shareholders and directors enter into the relations of a simple trust, issue deeds of trust, following which the following documents are provided to the client:
- in case of a nominee shareholder:
- Deed of Trust
- Instrument of Transfer
- in case of a nominee director:
- apostilled Power of Attorney
- Resolution approving the issue of such Power of Attorney
- Director’s Letter of Consent
- Director’s Letter of Resignation
- Nominee Director’s Declaration
Terms for setting up a company in the BVI
The average term for setting up a new company in the BVI makes two weeks. It can be a bit shorter or a bit longer, depending on your purposes and the documents you need to receive. If you are good with standard documents but would like to give a certain name to your company, incorporation will not take long. If, say, you want to introduce amendments to the company’s Memorandum and Articles of Association, it will take more time to check up such amendments with the lawyers for compliance with the BVI BC Act.
Purchasing a shelf (ready-made) company in the BVI is a good alternative for those who need to make a quick start and proceed with business operations immediately (you can receive the corporate documents within 1 day), provided that no personal changes to the company documents are required, and you can choose a name from the list available with the registered agent. Being registered agents authorized and licensed by the BVI Financial Services Commission, we always have shelf companies for sale – you only need to choose a name and provide your details required for compliance with the British Virgin Islands BC Act 2004 and Anti-Money Laundering Regulations.
Financial Statements of the BVI incorporated companies
Any company formed in the British Virgin Islands shall keep records sufficient to show and explain its transactions and allowing for the financial position of the company to be determined with reasonable accuracy. The financial records are not required to be audited, filed with any authorities and are not publicly available.
The Act uses the term “financial records and underlying documentation“ which the company should maintain and also provide the registered agent with the name of the person who is responsible to maintain and control the financial records and the underlying documentation of the company and the address where these are kept.
Any company failing to comply with the above requirements can be subject to a fine of $10,000. A failure to provide the financial records under one of the BVI agreements on exchange of tax information may increase the fine up to $100,000 or even threaten an imprisonment for a term of up to 5 years.
Bank Accounts for business companies formed in the BVI
Opening bank accounts for an offshore company has never been an easy task, and now it is still possible to find jurisdictions where accounts for a company set up in the British Virgin Islands are allowed, though subject to a number of restrictions. For instance, in Switzerland, Liechtenstein, or Austria, you can open a bank account for your BVI company, but only a savings account, so it will be required to block a certain, quite significant amount which is due to a global emerging trend.
It can be presumed that your search for a jurisdiction for opening a bank account for a BVI company will end in the Islands themselves, that is you try to open a bank account in one of the banks in the jurisdiction where your company is registered. Thus, we can analyze the banks licensed in the British Virgin Islands. Currently, there are 6 banks operating in the BVI, namely
- Scotiabank (British Virgin Islands) Ltd, which is a Canadian bank and is extremely demanding for their customers and their payments, next following are
- Banco Popular De Puerto Rico
- First Bank Puerto Rico, and
- First Caribbean International Bank (Cayman) Limited, reliability of which is rather doubtful due to the jurisdiction of their incorporation.
What is more, the above 4 banks are aimed at provision of services to the local business – the companies doing business within the BVI, and it does not seem very much practical to apply to these banks for opening an account.
The 5th bank is VP Bank (BVI), a member of the VP Bank Group, Liechtenstein, which is specialized in opening investment accounts only.
The 6th bank is the newly launched Bank of Asia (BVI) Ltd., which held its opening presentation on July 19, 2018, so, it has been operating for 2 months by now, and even in this situation, some issues related to opening accounts and making payments look uncertain.
Thus, opening a bank account for a BVI company in a bank licensed in the British Virgin Islands is limited to above financial institutions, subject to the mentioned restrictions and provisions.
In general, the BVI Business Companies Act is a modern and very attractive legislation which received a very positive response from the industry in general, both for its flexibility and clarity on some typically uncertain or undeveloped areas of company law. It also reinforced the position of the British Virgin Islands as one of the most attractive offshore jurisdictions worldwide for setting up an international company.