British Virgin Islands (BVI)

The British Virgin Islands (BVI), is a British overseas territory located in the Caribbean to the east of Puerto Rico. British Virgin Islanders are classed as British Overseas Territories citizens and since 2002 have had full British citizenship and deemed to be citizens of the EU as well.

Executive authority in British Virgin Islands is vested in The Queen and is exercised on her behalf by the Governor of the British Virgin Islands. Defence and Foreign Affairs remain the responsibility of the United Kingdom.

As an offshore financial centre, the British Virgin Islands enjoys one of the more prosperous economies of the Caribbean region, with a per capita average income of around $38,500 (2004 est.) Substantial revenues are generated by the registration of offshore companies.

By 2012 the British Virgin Islands were recognized as “a particularly successful hideaway, thanks to the exceptional secrecy on offer. This Caribbean territory, which is ultimately controlled by the UK, has sold more than a million anonymously-owned offshore entities since launching itself in 1984 as a tax haven.”

By 2000 KPMG reported in its survey of offshore jurisdictions for the United Kingdom government that over 41% of the world’s offshore companies were formed in the British Virgin Islands.

Being a member of the British Commonwealth, BVI applies a legal system based on English Common Law (its Business Company Law includes some terms in Delaware Law), which operates in concert with local acts. Because a BVI company is not required to pay tax, nor bound to foreign exchange controls, and information for submission for filing requested by local government is minimal, many multinational companies and persons are attracted to register BVI companies. At present, BVI has become one of the most popular places globally for offshore registration.

Advantages of the BVI company incorporation:

  • considerably restricting the requirement for corporate benefit
  • abolishing financial assistance in relation to company shares
  • abolishing the concept of a share capital in relation to company shares (and thereby en passant removing requirements relating to maintenance of capital and distributable reserves requirements for dividends)
  • removing restrictions in relation to the declaration of dividends
  • increasing the types of company that can be formed
  • modernising the regime for registration of security interests
  • the Act introduces statutory minority shareholder protections
  • companies are no longer required to have a stated corporate object, thereby obviating a number of difficulties relating to ultra vires and director’s duties.

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