Company formation in the BVI Overview
The British Virgin Islands (BVI), a group of more than 50 islands in the Caribbean Sea, have become one of the most attractive centers for registering offshore companies. The impetus for the registration of more than 400,000 companies was the adoption of the International Business Companies Act (IBC) in 1984, followed by the Business Companies Act in 2004 (combining offshore and onshore activities).
The jurisdiction’s legislation is based on English law, which provides a transparent and predictable environment for companies to do business, and a modern and developing financial system with flexible taxation and a quick company registration procedure in the BVI opens the door to new international corporations, investors, and startups. More than 2% of the world’s hedge funds have decided to register in the BVI. Most often, the purpose of legal business registration is to protect assets and data, optimize tax obligations, or legalize work with cryptocurrencies.
Time to register a company
1-2 days
Average register a company timeline
Average capital
US$50,000
The minimum capital
Tax rate
0%
Corporate tax rate
Advantages of Company Registration in the BVI
The process of registering a new company has become simple and fast thanks to the Commercial Companies Act 2004. Now, it takes just a few days to start a business in the British Virgin Islands as a foreigner or resident. This approach by the authorities to creating a favorable investment environment and simplifying company management has made this jurisdiction one of the most attractive for offshore business.
Advantages of setting up a company in the British Virgin Islands:
Tax Benefits
Many people consider starting a business in the BVI because there is no corporate tax, capital gains tax, royalties, interest and dividends, gifts of shares, property or inheritance, and there is no stamp duty, which together allows additional capital to be invested in the further development of the company.
Fast company registration
The process of registering a company in the British Virgin Islands is quick — a maximum of two days.
BVI as a financial services center
Simplified rules for setting up an offshore company in the BVI and the ability to control the business from anywhere in the world have stimulated the growth of new companies, including financial market giants such as Bank of Asia, CITCO Ltd. trust with over $1 trillion under management, DeFi aggregator 1-inch Network, TeraBlock, which allows transactions in fiat and cryptocurrency, and the Bitfinex trading platform.
Confidentiality and privacy
The high level of anonymity when registering a company in the BVI has become one of the main advantages of the jurisdiction. All data on owners, managers, shareholders, and other CEOs is closed to public access. Although the 2017 Beneficial Ownership Search System Act requires disclosure of information about the ultimate beneficial owner, such information will still not be available in public registries. Only local government authorities, the Financial Investigation Agency, the Financial Services Commission (FSC), the Tax Authority, and the Public Prosecutor’s Office have access to this confidential data.
Financial reporting for British Virgin Islands companies
The advantage of registering a business in the BVI is that there is no need to file financial statements and tax returns when operating outside the island.
Apostille/Notarization/Legalization
The process of registering foreign companies in the BVI is possible without visiting the island, remotely, by both residents and non-residents, with the provision of corporate documents with an apostille and notarization.
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Popular activities of company types registered in the BVI
According to the FSC website, local legislation allows for the registration of several types of legal entities and legal formations, such as:
- BC (Business Company) – one of the most common forms.
- Limited partnerships.
- MBC (Micro Business Companies) – there are restrictions on the size of the company and the volume of transactions.
- Trusts usually choose VISTA registration.
BC (commercial company)
Under the Business Companies Act 2004, five types of commercial organizations can be established:
- guarantee limited company;
- guarantee limited company without the right to issue shares;
- a company limited by guarantee with the right to issue shares;
- unlimited company without the right to issue shares;
- unlimited company with the right to issue shares.
BC is one of the most popular forms of offshore company registration, as it requires at least one manager and one owner. The average initial capital is US$50,000.
Limited liability company
A limited liability company may issue shares, whereby shareholders are not liable for the company’s obligations but have voting rights in accordance with the shares they own. The registration agent has the right to appoint a director within six months, who must then issue the company’s shares.
Limited guarantee company
A limited liability company (with or without the right to issue shares) must have at least one guarantor member, who may also be a shareholder. The company’s memorandum of association specifies all the obligations of the guarantor member in the event of the company’s liquidation.
Unlimited company
An unlimited liability company must have at least one member. Members have unlimited liability for all of the company’s obligations and contribute to its assets in the event of liquidation.
Limited liability partnerships
Limited partnerships (LPs) are created subject to compliance with all provisions of the Limited Partnership Act 2017. A written agreement defining the rights and obligations of LP partners is mandatory.
When registering this legal form, the following must be submitted to the Registrar:
- An application stating the name and address of the LP.
- An application specifying the term of the LP’s establishment.
- Detailed information about each partner, such as name and place of residence.
- A registration agent application.
Microbusiness companies
MBC is best suited for startups. However, there are restrictions on transactions (only in accordance with the previously stated business purpose), the number of employees, shares, and annual turnover. In addition, MBCs cannot engage in the provision of financial services.
Limited liability company
The memorandum of association defines all the objectives of the company, and it is prohibited to make any changes or additions to it.
In addition, a limited purpose company can be a segregated portfolio company (SPC). When registering an SPV, requirements such as obtaining permission from the FSC must be met.
Trusts
Trusts are of interest for conducting business related to capital management, property, land, inheritance transfer, and maintaining control over a family business. The main legislative act regulating the activities of trusts was the Trust Managers Act 2003 (since 2020).
The most common types of trusts in the British Virgin Islands are:
- Special purpose trusts (VISTA) are created to hold British Columbia shares.
- Discretionary and fixed interest trusts, which clearly define the circumstances under which beneficiaries receive income.
- Non-charitable purpose trusts: there are no charitable principles, the trust is created to protect or retain certain assets.
Holding
BCs can also be used as personal investment holding companies (PICs). The main advantages of registering a PIC are the storage of the owner’s or their family’s assets (from works of art and yachts to securities portfolios), ensuring confidentiality, and protection against theft.
E-commerce
The quick business registration process in the British Virgin Islands and the favorable business climate with low tax rates have also attracted many e-commerce companies. An e-commerce company can operate with multi-currency accounts, use Visa or Mastercard, various payment gateways, and payment systems such as PayPal or Stripe to provide its services in the global market. Online companies are allowed to connect offshore servers without using internal servers for transactions, which provides additional protection for their activities.
Types of companies
| Limited liability company The most common type | requires at least one shareholder and offers limited liability protection. The most common type | requires at least one shareholder and offers limited liability protection. |
| Limited liability company (LLC) Combines the features of corporations and partnerships | flexible management structure. Combines the features of corporations and partnerships | flexible management structure. |
| Limited partnership Requires at least one general partner and one limited partner | suitable for investment purposes. Requires at least one general partner and one limited partner | suitable for investment purposes. |
Documents for opening a formation in BVI
Business opportunities
Each jurisdiction has its own rules and requirements for the list of documents. The British Virgin Islands values its reputation and complies with all international AML/KYC rules.
Required Documents
To complete the registration process, you must prepare the following:
- Initial company documents, such as the Memorandum and Articles of Association, which define the main objectives of the company.
- Certificate of registration.
- A set of copies of the founding documents with an apostille.
- Decision on the first issue of shares.
- Share certificate.
- Register of directors, shareholders, and officers.
- Merger and reorganization agreements.
Managers and owners must provide identity documents and confirm the place of residence of the company’s manager and shareholders. In addition, a full resume or link to a professional portfolio must be provided.
Ready to Start Your Company in the BVI?
Our experts will accompany you at every stage of the opening process, ensuring its smoothness and efficiency.
Service packages for registration in BVI
Process for Opening a Company in British Virgin Islands
Company registration takes approximately 24 hours. After submitting the memorandum of association, articles of association, identification details of the CEO and shareholder, application for registration, and payment of the state fee, the registration agent issues the constituent documents in the form of a certificate of registration. On this basis, the company can legally conduct its activities and enjoy the tax benefits of the jurisdiction.
Incorporation Process and Timeline for Company Formation
One of the regulatory requirements of the jurisdiction is the appointment of a registration agent, payment for services, and maintenance of financial statements in accordance with the law. The local agent acts on behalf of the company, verifies the completeness of the submitted documents in accordance with KYC rules, signs the application, and registers the company without the personal presence of the owner or shareholder on the island. The registration agent acts as an intermediary between the newly created company and local authorities. It may take 1-2 days to obtain a certificate of registration.
Various types of legal entities are permitted to register, and the average capital amount is approximately US$50,000 (depending on the type of activity and legal form).
Information for directors and shareholders
| Minimum number of directors | At least 1 director is required; this can be a natural or legal person. |
| Residency requirements for shareholders | There are no residency requirements for shareholders; they may be non-residents. |
| Entry of data in the public register | Basic information about directors and shareholders is entered into the public register. |
| Bearer shares | Bearer shares are not permitted in the British Virgin Islands, which increases transparency. |
Remote Incorporation
The Financial Services Authority has streamlined the company registration process by making it remote, which has greatly simplified the task for both start-ups and large corporations. Operating anywhere in the world, a company or start-up can file documents and obtain a certificate of registration in just a few days.
Post-Incorporation Procedures
Obtaining a company registration certificate is only the beginning, as several more steps are required for the company to fully operate:
- Obtain permits/licenses if required for the chosen type of activity (Forex, cryptocurrencies – VASP, banking, insurance). Businesses need to ensure compliance with the law, as non-compliance can result in heavy fines or revocation of the certificate.
- Connect to an offshore banking system by opening a bank account (this will take several weeks, as there is a complex verification process for documents confirming the business relationship with the registration agent. Sometimes the director is required to be present in person at the banking institution).
Ready to Start Your Company in the BVI?
Our experts will accompany you at every stage of the opening process, ensuring its smoothness and efficiency.
British Virgin Islands Taxation System
The Commercial Companies Act 2004 exempted all types of businesses from paying income tax.
Tax rates in the British Virgin Islands:
- Corporate tax 0%.
- Capital gains tax 0%.
- VAT 0%.
- There are no currency controls, and the US dollar is legal tender.
- No taxes are levied on rent, royalties, dividends, interest, or shares of any kind.
However, there are some special features:
- A 20% tax is payable on imported goods.
- When transferring real estate/shares by companies that own real estate on the islands, 4% is payable.
- The registration fee is US$5,000.
- The license renewal fee is $350.
- The initial license fee (depending on the type) is $10,000.
- When hiring employees, the company pays payroll tax depending on its class (class 1 – 10%, class 2 – 14%).
Taxation
| Corporate tax rate | 0% for all companies, no corporate income tax. |
| Personal income tax | 0% (no income tax). |
| Withholding tax | 0% on dividends, interest, and royalties paid to non-residents. |
| Stamp duty | 0% for the transfer of shares; usually 2% for real estate transactions. |
| Annual license fee | From $350 to $1,000 depending on the type of company and share capital. |
Corporate tax
This offshore jurisdiction is governed by the Income Tax Act 2020, which stipulates that a company pays corporate tax only if the profit is earned within the jurisdiction.
- International tax agreements
To effectively manage business and avoid double taxation, the island’s authorities have signed a Tax Information Exchange Agreement (TIEA).
- Accounting and auditing
According to the amendments to the Commercial Companies Regulation of January 1, 2023, all companies are required to submit an annual report (balance sheet, profit and loss statement) to their registration agent within nine months.
Companies do not file a report if:
- They are listed on a stock exchange.
- They are subject to the FSC.
- They file a return with the IRS.
- They are in the process of liquidation.
- Accounting and bookkeeping
Effective company management tasks include adequate and accurate accounting of all transactions (data is stored for five years).
- Audit requirements
Regardless of the form of ownership, audits are not mandatory for companies.
- Cryptocurrency and Bitcoin in the British Virgin Islands
In 2022, the Virtual Asset Service Providers (VASP) Act was published, making it mandatory to obtain a license to carry out such activities. The issuance of tokens is not subject to VASP regulation.
Obtaining a VASP license allows you to legally provide the following services:
- Exchange of cryptocurrencies and fiat currencies.
- Conducting transactions.
- Storage.
Company Registry and Nominee Services
A legal entity is registered by entering information about it in the Register of Legal Entities and obtaining the corresponding certificate.
- Register of Directors
- Register of Shareholders
- Nominee Services
- Economic presence
Directors or officers must be entered in the Register, which is kept at the company’s office and provided to the agent for legal registration of the company along with identification data.
A minimum of one shareholder is required to establish a company.
The appointment of a nominee manager or shareholder is permitted in the British Virgin Islands.
In 2018, the Economic Presence Act was passed, which stipulates that certain activities, such as banking, insurance, financial activities, shipping, and leasing, must comply with economic presence requirements.
Banking for a company in the British Virgin Islands
The banking system includes eight banks, including giants Citco Bank and CIBC Bank. When opening an account, all the company’s founding documents are collected, as well as information about the directors and founders. In some cases, the director’s personal presence is required. The process of opening an account can take several weeks.
Banking
| State-owned banks | The banking sector is mainly privately owned, with several state-affiliated financial institutions. |
| Central bank | There is no central bank in the British Virgin Islands; financial services are regulated by the Financial Services Commission. |
| Number of banks | There are about 8 licensed banks providing a wide range of financial services. |
| Credit rating | BBB rating from S&P, indicating moderate credit risk and a stable outlook. |
| Corruption | Overall low level of corruption, ranked 24th in the world by Transparency International. |
| Judicial system | Independent and effective judicial system based on English common law. |
Business sectors and opportunities
| Financial services | The British Virgin Islands is a major offshore financial center with numerous banks and investment companies. |
| Tourism and hospitality | Significant growth potential in the tourism sector, particularly in the areas of luxury resorts and ecotourism. |
| Shipping and maritime services | The British Virgin Islands is an important jurisdiction for ship registration and maritime services. |
| Technology and innovation | Opportunities for investment in technology start-ups and innovative service providers in the region. |
Legal framework and key provisions
| British Virgin Islands Business Companies Act | Regulates the formation and management of companies in the British Virgin Islands. |
| Limited Liability Partnership Act | Regulates the formation of limited liability partnerships in the British Virgin Islands. |
| International Business Companies Act | Provides guidelines for the operation of international business companies (IBCs). |
About company registration in BVI (faq)
How do I register a company in BVI?
To register a company in the British Virgin Islands, choose the type of company, come up with a unique English name, appoint an agent, prepare the documents, submit the application, pay the fees, and receive the supporting documents.
How much does it cost to register a company in BVI?
To register a company in the British Virgin Islands, choose the type of company, come up with a unique English name, appoint an agent, prepare the documents, submit the application, pay the fees, and receive the supporting documents.
How long does it take to register a company in the BVI?
The time it takes to register a company in the British Virgin Islands (BVI) can vary depending on a number of factors, including the completeness of your documents, the workload of the relevant authorities, and the efficiency of your chosen registration agent or service provider. Registering a company in the BVI usually takes about two weeks.
How do I know when it’s time to renew my company’s validity?
In the British Virgin Islands (BVI), companies are required to renew their registration annually to remain valid and comply with local regulations.
If your company was registered in June or earlier, it must be renewed by May 31 each year. For companies registered between July and December, the renewal deadline is November 30.
What are the disadvantages of BVI companies?
Companies registered in the British Virgin Islands offer tax advantages and regulatory flexibility, but there are also potential disadvantages. In recent years, the British Virgin Islands has faced increased international scrutiny and pressure for greater transparency. There is a possibility that international or local legislation may be adopted in the future that could affect the legal and tax status of companies in the British Virgin Islands.
Monitoring changes in legislation and seeking professional advice is crucial for those considering registering a company in the British Virgin Islands.
Do BVI companies file tax returns?
The British Virgin Islands are known for their tax neutrality, and companies registered there are not subject to corporate income tax, capital gains tax, or similar direct taxes.
