The British Virgin Islands began incorporating International Business Companies in 1984 after the relevant legislation was put in place. Many countries in the region patterned their International Business Companies Act after that of the British Virgin Islands. The British Virgin Islands International Business Act of 1984 was one of the first of its kind. The legislation regulated the incorporation of such business in the islands. From its commencement these companies gained worldwide popularity as the tax benefits were very appealing. Changes were made the legislation of 1984 and a new act known as the BVI Business Company act of 2004 was put in place. Act governs the registration of all companies in the British Virgin Islands.
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The BVI Company Act has removed the differences which existed between British Virgin Island Local Company and Offshore Company. Ultimately no companies registered in the British Virgin Islands pay taxes. Companies registered in the BVI are simply known as BVI Companies. The passing of the new act did not impede the popularity of the British Virgin Islands as an offshore jurisdiction or the popularity of the Companies registered there. In fact the added benefit increased the number of companies registered in tax haven BVI. Statistically it have been reported that by April of 2008 there were approximately 850,000 companies registered in the British Virgin Islands. This surely puts the jurisdiction of the BVI as one of the top and most popular jurisdictions available and the BVI Companies the most popular offshore company.
The International Business Companies Act of 1984 made provisions for the registration of one company; Companies limited by shares. The new BVI Companies Act on the other hand makes available the registration of a number of Companies; Companies limited by shares, companies limited by guarantee but restricted to issue shares, companies limited by guarantee but authorized to issue shares, unlimited companies authorized to issue shares and unlimited companies unauthorized to issue shares. The fact that the new act encouraged the registration of a wider range of companies increased the number of companies being incorporated in the British Virgin Islands by far.
The key factor which makes the BVI Company the most popular company available is it is tax free. Companies incorporated under the BVI Company Act pay no taxes including, corporate tax, capital gains tax, income tax, or any tax on the transfer of assets. BVI companies pay no Stamp Duty on transactions regarding the transfer of shares and assets. BVI Companies generate major tax profit and are very instrumental in tax planning therefore many clients utilize them over other companies in other jurisdictions.
The British Virgin Islands attracts many clients because the country has is very stable politically and economically. The islands are dependent territories of Great Britain. The Judicial and legal system of the country are archetypes of the common law system of England. Economically the BVI is one of the wealthiest islands in the Caribbean to date. There have been little to no reports of political or any type of social uprisings in the British Virgin Islands.
BVI Companies are easy to manage which makes them very popular amongst clients. Unlike with the previous act companies there is no authorized share capital. BVI Companies can have only one director and shareholder who can be the same person or corporate body. When registering a BVI Company minimum personal information is requested and this information (personal) is not filed with Registrar of companies therefore it is not public knowledge. The companies are also easy to set up. Incorporation of a company in the British Virgin Islands usually takes one day. The ease and speed at which companies are incorporated has also made them very popular with clients.
BVI Companies have made the BVI a very important and popular offshore jurisdiction. The jurisdiction is known worldwide and continues to receive recognition. The legislations put in place by the BVI continue to serve as an example to many other offshore jurisdictions in the world.