Almost everything formed in the Territory is one thing: a BVI Business Company, incorporated under the BVI Business Companies Act, 2004. This page is about that company: what the statute lets it do, what it requires of it, and why parties keep choosing it.
The BVI is a British Overseas Territory in the Caribbean. English common law applies, supplemented by BVI statute; final appeal lies to the Judicial Committee of the Privy Council in London; and the currency is the United States dollar, which takes exchange risk out of the arrangement. Those three facts are most of what the jurisdiction contributes. The rest is the Act.
What the Act produces is a corporate form deliberately written to be used by people who are not in the Territory. It is simple enough to be understood quickly by counsel anywhere, flexible enough to carry a bespoke shareholders’ agreement, and standard enough that the other side’s lawyers have seen it before.
It is not a secrecy vehicle, and has not been one for years. Beneficial ownership is recorded and reachable by competent authorities, economic substance is declared annually with penalties behind it, and the Territory exchanges financial account information automatically under the Common Reporting Standard and FATCA.
A body corporate with separate legal personality, unlimited capacity, and members whose liability is limited to what they agreed to pay for their shares. The particulars below are what the Act provides, not what a provider chooses to offer.
Separate legal personality, and capacity without limit
The company is a person in law from the date on its certificate. It has the capacity to do anything a natural person could do, irrespective of corporate benefit, so no counterparty has to test whether an act was within its objects.
One director is enough, and it may be a company
No residency requirement, no requirement to meet in the Territory, and no requirement that directors be individuals. Directors must be appointed within six months of incorporation and filed with the Registry.
One shareholder is enough
A single member may hold the whole company. Members are recorded in the register of members kept by the company and its registered agent; they are not published by the Registry.
No minimum capital, and shares need no par value
There is no prescribed capital and no requirement to state one. Shares may be issued with or without par value, in any currency, in as many classes as the memorandum provides, with whatever rights are attached to them.
Five forms of company
Limited by shares; limited by guarantee and not authorised to issue shares; limited by guarantee and authorised to issue shares; unlimited and authorised to issue shares; unlimited and not authorised to issue shares. In practice almost every company formed is the first.
Distributions on a solvency test, not on capital rules
A company may distribute whenever the directors are satisfied it will remain able to pay its debts as they fall due and its assets exceed its liabilities. There is no distributable-profits calculation and no court process to reduce capital.
It can arrive and it can leave
A foreign company may continue into the BVI, and a BVI company may continue out of it, keeping its identity, contracts and history. Statutory merger and consolidation with a foreign company are available on the same basis.
Specialist forms exist where they are needed
A segregated portfolio company ring-fences the assets and liabilities of each portfolio from the others. A restricted purposes company is confined to purposes stated in its memorandum, which is what securitisation counterparties often require of an issuer.
None of these is a loophole. They are design decisions in a statute written to be used by people who are not in the Territory.
No corporation tax, capital gains tax, inheritance tax or withholding tax in the Territory. That means the BVI adds no layer of its own. It does not mean the company is untaxed. Tax follows residence, management and the substance of the business, and that is a question for advisers where you and your investors actually are.
One director is enough, and that director may be a company. There is no minimum capital, no requirement that shares carry par value, and no need for the shareholders and directors to meet anywhere in particular. Multiple share classes and bespoke voting rights are ordinary, not exotic.
Incorporation is filed electronically through the Registry’s VIRRGIN system. Where the due diligence file is clean, the certificate issues within a few working days. The delay in almost every formation is the paperwork on the people, not the Registry.
A BVI company can continue into the Territory from elsewhere, or out of it, and can merge with a foreign company, keeping its identity, its contracts and its history. For a group that may restructure later, that optionality has real value.
The Eastern Caribbean Supreme Court sits in the BVI with a dedicated Commercial Division. Shareholder disputes, freezing orders and insolvency applications are heard by judges who deal with them constantly, and the case law is reported and citable.
Banks, exchanges, custodians, fund administrators and counterparties see BVI companies every day. A form that the other side’s legal team already recognises shortens onboarding from Singapore to Zurich, and that familiarity is worth more in practice than any single statutory feature.
A BVI company is the product of one principal statute and a surrounding frame of others. These are the ones that decide what your company may do and what it owes each year.
Four patterns account for most of what is formed. Choose the one closest to your purpose.
A single vehicle holding shares in operating subsidiaries in several countries, so that dividends, disposals and reorganisations happen at one level under one law rather than across five.
Two parties from different jurisdictions, neither willing to incorporate under the other’s law. A BVI company with a tailored shareholders’ agreement is neutral ground, and both sets of lawyers already know how it works.
Special purpose vehicles for a single asset, feeder companies, and the regulated fund products the BVI offers alongside them.
Vessels, aircraft, real property and intellectual property held in a company rather than personally.
None of these? Tell us what the company is for before you order, because some purposes we cannot service, and you should hear that first.
A BVI company is inexpensive to form and cheap to keep. What it is not is unattended. These obligations are the reason the jurisdiction still has correspondent banking.
A registered agent and registered office, at all times
Every company must have both, in the Territory, from the day it is incorporated. Lose either and the company can be struck off. This is where the Registry, the Financial Investigation Agency and the tax authority reach the company.
Beneficial ownership is recorded
The natural persons behind the company are identified and filed. The register is not public, but it is available to BVI competent authorities and, on request through them, to overseas law enforcement. A nominee changes who appears on the share register, not who is disclosed here.
Economic substance
Every company declares each year whether it carries on a relevant activity, and if it does, whether it is directed and managed in the Territory with adequate people, premises and expenditure. Getting this wrong carries penalties and, ultimately, strike-off.
An annual return, and records that exist
A statement of financial position goes to the registered agent within nine months of the financial year end. It is not published, but failing to deliver it is a penalty offence. Accounting records must be kept for five years and their location notified.
Information exchange
The Territory reports automatically under the Common Reporting Standard and FATCA. Financial account information reaches the tax authority where the account holder is resident, without anyone having to ask for it.
Read together, these say something simple: the BVI is an efficient place to hold and structure assets, and a poor place to hide them. We take that view seriously enough to turn away files that only make sense on the second reading.
No. The whole formation is done remotely, by email. There is no requirement for a director or shareholder to set foot in the Territory, and no requirement to attend meetings there, unless you are claiming economic substance in the BVI, which is a different exercise.
No. Directors are filed with the Registry, and the register of directors is available on payment of a search fee. Shareholders and beneficial owners are not published. Beneficial ownership is, however, recorded and available to authorities.
Often, but not automatically, and not quickly. Banks assess the business, not the jurisdiction. Expect the same three documents per person that we ask for, plus a business plan and evidence of the source of funds. Budget weeks, not days, and start the conversation early.
Not generally. Accounting records must be kept and must be capable of showing the company’s position, and the annual return of financial position must be delivered, but an audit is required only for particular regulated activities.
Renewal is US$1,500 a year, plus US$250 for the Economic Substance filing and US$250 for the Annual Return filing where they apply. The Government annual fee is included in the renewal. See annual renewal.
Yes. A foreign company can continue into the BVI and keep its identity, contracts and history. So can a BVI company move out. We also take on BVI companies from other agents at the standard renewal rate.