The British Virgin Islands (BVI) is the grandfather of all IBCs.
IBC stands for “international business company,” originally from the International Business Companies Act of 1984 in the British Virgin Islands. It has since been copied—with slight variations—across many jurisdictions.
BVI Companies and Entities
In 1984, the International Business Companies Act was enacted in BVI. This legislation created the first-ever IBC.
This law took off after the US invaded Panama in 1989—up until then among the largest offshore incorporation jurisdictions.
There is no corporate tax in BVI.
The only taxes that may affect a company are a 4.5% social security contribution on domestic salaries and 2% or 6% payroll tax. These taxes are in practice only paid by locally run companies with local employees. If you incorporate in BVI and have no local operations, you may not need to pay these taxes.
Costs are generally higher than in other IBC jurisdictions, but nonetheless highly competitive. It’s rare to find BVI incorporation fees under $1,000 USD. Expect something closer to $1,500-$2,000 with a high-quality, reputable service provider.
Annual renewal fees are around $800 to $1,200 in most cases.
Companies owned by nonresidents rarely register for the public records.
The government does not know who the directors and shareholders of companies are. That information stays with the registered agent, which is bound by law to only disclose the information under a lawful request such as through a DTA or a Tax Information Exchange Agreements (TIEA). More on those issues here.
BVI suffers from a rather poor international reputation.
This is due to its high profile and a number of controversial cases of tax evasion and suspected money laundering coupled with unfavorable ratings by organizations like OECD.
BVI is a recognized jurisdiction in the international financial services sector, but many are starting to opt for Anguilla, Turks and Caicos, Cayman Islands, or even jurisdictions which aren’t British Overseas Territories, such as Mauritius for their higher reputations.
As for whether the medium-poor reputation of BVI is a concern or not is an evaluation to be done in each unique case.
Offshore Banking in BVI
The banking sector in BVI is very small. There are only three banks really worth speaking about:
- HSBC; and
HSBC and VP Bank are private banks, requiring $5 million and $100,000 USD respectively to open an account. Neither is particularly interested in taking on corporate clients, save for corporations whose purpose is wealth management.
FirstCaribbean does not have a minimum deposit but $2,000 USD is recommended.
Accounts are almost always opened remotely or by visiting the bank in another country. FirstCaribbean can be a bit difficult with this, though, often insisting on a personal visit if there is no introducer or intermediary.
Living in the British Virgin Islands
BVI is a Caribbean tropical paradise, with all the pros and cons that come with it. It’s warm, beautiful, peaceful, and friendly. It’s also expensive, remote, and small. Hurricanes can be a problem.
Although pleasant and enjoyable, living in the BVI is different from visiting as a tourist. Those seeking comfort and luxury are more likely to feel at home in the Cayman Islands or Bermuda.
Immigrating to the BVI is very difficult.
Tourists are welcome with open arms, but those seeking to stick around will find doing so challenging. Getting a work permit is conditional on a job offer from a local company, which must first advertise the job locally and prove that no BV Islander can fill the position.
Editor’s Note: In addition to the BVI, there are other attractive jurisdictions that are cause for optimism. However, things can change quickly. New options emerge, while others disappear. This is why it’s so important to have the most up-to-date and accurate information possible. That’s where International Man comes in. Be sure to get the IM Communiqué to keep up with the latest on the best international diversification options to maximize your personal freedom and financial opportunity.
The information in this article is based on Streber’s personal experiences and has not been independently verified. As always, do your own due diligence.
Streber works as a consultant and director for a wide range of companies and has broad experience in offshore banking, offshore incorporation (formation and maintenance of offshore companies), taxation, privacy, ecommerce, merchant accounts, online payments, and all other things the privacy-minded entrepreneur might find interesting. You can read Streber’s blog here.