BRITISH VIRGIN ISLANDS

The British Virgin Islands are a small group of islands located in the Caribbean, between the Caribbean Sea and the North Atlantic Ocean, east of Puerto Rico. It has an area of 153 sq km.

TYPE OF TRADING COMPANY

International Business Company's ('IBC's') are incorporated in the British Virgin Islands ('BVI') under the International Business Companies Act, 1984. The business of any IBC is conducted outside the BVI, and may not do business with any person resident in the BVI.

BVI IBC's are a very popular and widely used offshore vehicle which is mainly due to the ease of their administration, flexibility, taxation exempt status and they are known and understood by the offshore international financial community. BVI IBC's may not own real estate in the BVI, other than the lease of an office, and may not carry on banking or trust business (unless licensed under the Banks and Trust Companies Act, 1990) or insurance or re-insurance business (unless licensed in the BVI to carry on that business). Otherwise, they may engage in any activity that is not illegal under the laws of the BVI subject to any restrictions in their Memorandum of Association.

PROCEDURE TO INCORPORATE

The registered agent delivers the Memorandum of Association and Articles of Association to the Registry together with the appropriate fee and an Application for Incorporation confirming their consent to act as Registered Agent.

RESTRICTIONS ON TRADING

IBC's cannot trade within the British Virgin Islands or own real estate there. They also cannot undertake the business of banking, trust company, insurance, mutual fund and related businesses, assurance or reinsurance.

POWERS OF COMPANY

A Company incorporated in British Virgin Islands has the same powers as a natural person.

LANGUAGE OF LEGISLATION AND CORPORATE DOCUMENTS

English.

NAME RESTRICTIONS

An IBC cannot register with any name that has already been incorporated, or is so similar to an existing name that it may cause confusion. Any name which in the opinion of the Registrar is considered undesirable, obscene or offensive will also be rejected. Further restrictions include any name which suggests the patronage of royalty or of the British Virgin Islands Government. Various other words such as "trust", "insurance", "assurance", "fund", "credit", and "bank"   require prior approval of the BVI Financial Services Commission.

COMPANY NAMES

The different types of companies permitted under the Act have different name endings. Companies limited by shares can use the endings "Limited", "Corporation", "Incorporated", "Sociètè Anonyme", "Sociedad Anónima", or the relevant abbreviations (Ltd., Corp., Inc., S.A.).

LANGUAGE

A British Virgin Islands Business Company is typically incorporated using the English language and with an English name. Provision exists for a translation of the name to be included in the Memorandum and Articles of Association and on the Certificate of Incorporation.

REGISTERED OFFICE REQUIRED

An IBC must be maintained in the British Virgin Islands and requires a registered office - this is normally maintained at the offices of the Registered Agent of the Company.

AUTHORISED and ISSUED SHARE CAPITAL

An IBC is normally incorporated with an authorised share capital of US$50,000 with all of the shares having a par value. However, the par value of the shares may be expressed in any currency. The minimum number of issued shares is one share. There are additional government fees applicable for use of Bearer Shares and/or for authorised shares exceeding 50,000.

CLASSES OF SHARES

The Company can have registered shares, bearer shares, shares of no par value, preference shares, redeemable shares and shares with or without voting rights. Nominee shareholders are permitted.

An IBC may be limited by shares or by guarantee or limited by both shares and by guarantee (hybrid).   Unlimited companies may also be formed under the legislation.

BEARER SHARES PERMITTED

Bearer Shares are permitted but they incur additional fees, which vary depending upon the location of the custodian of the shares.

DISCLOSURE OF BENEFICIAL OWNERSHIP TO AUTHORITIES

There is no disclosure of the beneficial owner(s). The Register of Members (Share Register) may be inspected only by a shareholder. Copies of the Register of Members and Register of Directors must be lodged with the Registered Agent. A Register of Members with bearer shares must show a contact address for the custodian of the shares. Bearer shares issued from 2005 onwards must be held by a custodian.

TAXATION

There is no taxation of corporate income in the BVI, except for a payroll tax on persons employed in the BVI. A British Virgin Islands Business Company is exempt from the payment of all forms of local taxation, the payment of stamp duties for transactions in respect of its shares, debt obligations or other securities and the payment of stamp duties with respect to all instruments relating in any way to its assets or activities.

DOUBLE TAXATION AGREEMENTS

British Virgin Islands has treaties with Japan and Switzerland although they have little benefit to offshore companies.

GOVERNMENT LICENCE FEES

Companies with up to 50,000 authorised shares pay the sum of US$350 per year.

Companies that have bearer shares and/or have more than 50,000 authorised shares pay the sum of US$ 1,100 per year, or more, depending upon the location of the custodian of the bearer shares.

FINANCIAL STATEMENT REQUIREMENTS

The company is required to keep financial records that are sufficient to show and explain the company's transactions and will at any time enable the financial position of the company to be determined with reasonable accuracy. No filing of annual returns is required.

MEETINGS

No annual general meetings are required. Any meetings may be held outside of the British Virgin Islands and may be by telephonic conference or other electronic means.

DIRECTORS

The minimum number of directors is one. Directors may be natural persons or bodies corporate. They can be of any nationality and need not be British Virgin Islands resident.

COMPANY SECRETARY

A company secretary is not a requirement under the law and is not typically appointed. However a secretary can be appointed to assist with the administration and signing obligations if desired.

SHAREHOLDERS

The minimum number of shareholders is one.  

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