Consisting of dozens of islands, the British Virgin Islands (BVI) is a popular place with tourists. It has an abundance of breathtaking views and sandy beaches. The British Virgin Islands is also perfect for foreign investors. Since the ‘British Virgin Islands International Business Companies Ordinance’ was passed in 1984, it has been classified as a tax haven. The tax laws in the BVI are aimed at attracting overseas investors so that they incorporate an International Business Company (IBC) there. So, what makes this jurisdiction an attractive location for foreign investment and why do many people choose to form a company in BVI?
No Tax on Profits and Income
Not every tax haven charges a zero rate of tax but this does apply in the British Virgin Islands. A company that has an IBC never has to pay any tax on profits and income. If a company doesn’t want to continue paying a huge tax bill in the country which its head office is in, it should seriously consider having an offshore site in this jurisdiction.
Personal Information cannot be Passed on
Some investors don’t want their personal information to be obtainable by a third party and this will happen in the British Virgin Islands. This is because names of shareholders or directors cannot be obtained. Although details about such senior individuals are provided to the government of the British Virgin Islands when it is being incorporated, it’s never entered onto a public record. Therefore, it is impossible to find out personal data such as this.
Other Tax Benefits
Along with income and profits, tax also doesn’t have to be paid on capital gains, dividends, compensation and death duties. In other countries, a high rate of tax for these forms of income might apply but a BVI IBC never has to pay anything.
Bookkeeping isn’t necessary
Although a company can maintain accounting records, such information doesn’t have to be submitted to the British Virgin Islands government. This is because an offshore site in this jurisdiction is never audited. As it can cost a lot of money to audit a company, as well as prepare it for an annual inspection, such expenditures don’t accrue.
Not as many senior employees have to be hired
When incorporating a company in particular European countries, several directors and shareholders might have to be in place. However, when the decision has been taken to form a company in BVI, the same person who is a director can also act as the only shareholder. Furthermore, a secretary isn’t required for an IBC in this jurisdiction. As a result, an IBC can be formed quicker because a director doesn’t have to search for people that could hold this role.
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