British Virgin Islands: Types of Company
International Business Company
The International Business Company was the most widely used vehicle for offshore operations in the BVI; it normally took the form of a private company limited by shares. The governing legislation is the International Business Companies Act 1984, updated by the International Business Companies (Amendment) Acts of 1990, 2003, 2004 and 2014, which immobilise bearer shares (see above) and impose record-keeping requirements on professional intermediaries. The Memoranda of Association of existing IBCs were deemed to have been amended to state that they are authorised to issue only registered shares and that these may not be exchanged for bearer shares.
Under the International Business Companies (Amendment) Act 2003, from December 31, 2004, all international business companies (IBCs) located in BVI are required to establish and maintain a Register of Directors, and must appoint their first director within 30 days of the IBC's incorporation. As from 2007, all IBCs are known as BVI Business Companies. Other statutory requirements remain minimal, and flexible:
- Only one director and one shareholder are required;
- Shareholders, directors and officers need not be resident in the BVI and there is no stipulation as to their nationality;
- There is no minimum capital requirement; shares may be either registered or bearer and may be issued in any currency (bearer shares now have to be deposited with an authorised intermediary, who must record the identity of the beneficial owner);
- Accounts need not be kept; however, if they are kept there is no requirement for an audit;
- No returns are needed of shareholders, directors or officers;
- Shareholders' and directors' meetings need not be held in the BVI and can be held by telephone;
- The Memorandum and Articles of Association are the only documents to be held on the public record.
IBC status is granted subject to certain conditions:
- No business may be transacted with residents in the BVI;
- No ownership interest in real property in the BVI is permitted; property may be leased for office use only;
- Banking or trust business may be carried on only if an appropriate license is issued;
- Likewise, a licence is required to carry on insurance or re-insurance business;
- Engaging in the business of company management or providing registered facilities for BVI incorporated companies is not permitted.
IBCs are permitted to own shares in other BVI companies, maintain bank accounts in the jurisdiction and employ the services of local professionals. IBCs are exempt from BVI taxes by statute.
It is usual to use a registered agent in the BVI to incorporate an IBC (eventually it is obligatory to appoint one anyway; there are about 70 of them, licensed by the Government). Fees for incorporation of an IBC are based on the company's authorised share capital. Normally, the incorporation process takes no more than one day; however, for banks, trust companies and insurers the process is lengthier (see Offshore Legal and Tax Regimes).
Statutory incorporation fees are US$350 for capital up to US$50,000 and US$1,100 thereafter. The annual license fee is:
|Up to US$50,000||US$350|
|No authorised capital||US$350|
|Below US$50,000 and some or all of the shares have no par value||US$350|
IBCs which disapplied the bearer share regulations of the new Business Company Act pay higher fees.