The British Virgin Islands are one of the long-term ‘traditional’ offshore pillars.
The BVI consist of 60 islands and cays with a total area of 150 km². They are situated on the north- west of the United States Virgin Islands, from which they are separated by a channel only 3 miles wide. The capital, Road Town, is on the largest island, called Tortola.
The British Virgin Islands are an internally self-governing colony with a ministerial system of Government operating under a constitution adopted in 1967. As you can imagine the legal system is based on British common law.
The Companies Act of 1985, the International Business Companies Ordinance of 1984 and The Banks and Trusts Companies Act of 1990 have allowed the British Virgin Islands to become an important offshore financial center.
The International Business Companies Ordinance establishes commercial rules that are exclusive of tax and have few obligations as far as the legal, tax system and accounting are concerned.
The BVI had been listed as ” Non Cooperative Country” by the Financial Task Force of the OECD but it was removed and is not anymore listed as such in 2018.
The British Virgin Islands IBC [International Business Company] is a tax free trading entity, which like the Bahamas IBC -in its best times-, has few reporting obligations: the names of the directors and shareholders do appear on public files, but the use of Nominees (Director and/or Shareholder) can solve this problem. No annual accounts or audit are required.
However, the annual filing fee must be paid every year in due time. If not paid at deadline the companies are automatically struck off from the Registrar of Companies. Restoring a company that has been struck off is immensely costly and time consuming.
We have here one interesting Jurisdiction to incorporate low cost and easy to manager offshore companies offering a good level of discretion.
BUT it is definitely not possible to use such a Company incorporated in the BVI to trade with the European Community or the USA or to receive commissions from the Western European Countries or the USA, because the BVI are listed among the “Tax Havens” and are black-listed by most Internal Revenue Services and Inland Revenue offices around the world.
In the case of a payment for services or commissions from a highly taxed country: withholding taxes will apply.
Obviously a careful study of the legal bodies of involved countries provides several possibilities to use the British Virgin Islands as a perfect offshore vehicle, but it is mandatory to set-up the appropriate structure.
The following DTT have been signed by the BVI with :
BUT the application of such DTT is limited ONLY to Companies deemed to be RESIDENT IN THE BVI, so not applicable to Offshore IBCs !
The BVI have also signed several Tax Information Exchange Agreements (TIEAs) with the following countries :
We can help you with the Bank introduction in The BVI (and this can be done at distance without visiting personnally the Bank locally) Internet Banking and Debit Cards are available.
If you want to incorporate a Company in the BVI please let us know and we will provide a detailed facts-sheet and a quote.