The International Business Companies (IBC) Act of the British Virgin Islands was first passed in 1984. The Act itself was amended on several different occasions and subsequently was replaced with the BVI Business Company Act of 2004. The BVI Company came into full effect on January 2005. Although...

BVI Business Company

A BVI Business Company is any company registered under the BVI Business Companies Act of 2004. This act replaced the International Companies Act and makes provisions for the incorporation of every type of Business Company in the British Virgin Islands. The previous act which government offshore companies in the British Virgin Islands was the outdated International Business Companies Ordinance of 1984. The International Business Company of the British Virgin Islands now simply known as a BVI Company is highly regarded in the offshore world and helped to make the British Virgin Islands one of the most dominant offshore jurisdictions to date.

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Under the International Business companies Ordinance of 1984 the incorporation of different types of companies was restricted to one category. The new act permits the registration of different categories of companies including; companies limited by shares, unlimited companies with restrictions to issue shares, companies limited by guarantee with restrictions to issue shares, companies limited by guarantee but authorized to issue shares, and unlimited companies authorized to issue shares. The act also removed all peculiarities between local (onshore) companies and offshore companies by eradicating income tax for both types of companies. All Companies are now known as BVI companies.

The new British Virgin Islands Company Act came into effect on the first of January of 2005. Companies are registered with the Registrar General and have to submit a complete Memorandum and Articles of association. All documents obtained outside of the jurisdiction must be certified. The registration of companies in the British Virgin Islands takes one day. To register companies the interested party must solicit the services of an Agent who is registered and licensed under the Company Management Act.

In agreement with the BVI Company Act the BVI Companies can have only one director who can also be the shareholder. The director is responsible for supervising and managing the affairs of the Company. The Act makes provisions for those companies who are allowed to issue shares to state the rights, restrictions and privileges of such shares. The rights of shareholders of these companies are prescribed in the Articles of Association of the company. The companies are governed based on the laws stipulated in the Memorandum and Articles of Association. There is no minimum authorized share capital for BVI companies. Companies can confirm the number of shares that will be issued but do not necessarily have to state the value of them.

BVI Companies enjoy the added advantage of knowing that once incorporated in the British Virgin Islands no income tax will be paid. All BVI Companies pay no estate tax, capital gains tax, gift tax or inheritance tax is applied to BVI Companies. Also no taxes will be applied to interest, compensations, dividends earned or paid out by the company. This is one of the biggest advantages of a BVI company. No stamp duty will be charged on the transactions (transfer of shares, transfer of property or debt obligations) carried out by the business company.

A characteristic of setting up or registering a company in the British Virgin Islands is confidentiality. The name of the true owners of the company along with any personal information submitted is not filed at the registry.

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