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British Virgin Islands: Business Companies

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The British Virgin Islands offshore sector, especially the legislation regarding Offshore Companies, underwent a lot of changes in the years between 1998 and 2004. These changes were aimed at ensuring that the BVI was fully compliant with the EU Savings Tax Directive and the EU Code of Conduct on Business Taxation (required by the UK of all overseas territories).

Finally in 2004, the British Virgin Islands Business Companies Act 2004 (the BVI BC Act) was adopted. This entered into full force on the 1st of January 2007, when it became the sole Business Companies Act in the jurisdiction.

Under this legislation, the income tax rate for both local and International Business Companies became 0%, effectively removing the distinction between offshore and onshore entities.

Under the 1984 IBC Act, offshore companies had only one corporate form (company limited by shares). The 2004 BVI Business Companies Act now permits several different types of companies to be incorporated:

Companies Limited by Shares
Companies Limited by Guarantee (these are not authorised to issue shares - used mainly for "Not for Profit" organisations)
Hybrid Companies: Companies Limited by Guarantee, authorised to issue shares (companies equity and guarantee membership)
Unlimited Companies, authorised to issue shares
Unlimited Companies, not authorised to issue shares (used mainly for estate planning)
Restricted Purpose (structured finance transactions)
Segregated Portfolio Companies (mutual funds/insurance companies)

The BVI BC Act 2004 abolished the concept of "Authorised Capital". Companies are now incorporated with a maximum number of shares that the company is entitled to issue.

Bearer shares: as established under previous legislation, before the 2004 BC Act, bearer shares are only permitted in companies where expressly authorised by the M&AA, deposited with a custodian who has been approved by the BVI Financial Services Commission. Companies with bearer shares (incorporated before January 1, 2005), and reregistered on January 1, 2007, are required to deposit their bearer shares with an appropriate custodian on or before December 2010. For more information see: Custodianship of Bearer Shares.

The legislation also now permits the use of foreign characters in company names. It also permits to the use of a different address in the British Virgin Islands as the registered office, although it must still have a registered agent.

BVI Business Companies Act 2004 (pdf)

[BVI Public Holidays]

British Virgin Islands Legislation - Legislation Library of the BVI Financial Services Commission

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Last edited: 04-Oct-2008