How to Successfully Set Up a BVI Offshore Formation
After the passing of the ‘British Virgin Islands International Business Companies Ordinance’ in 1984, this island country (which consists of more than one hundred islands) has been a very popular place for offshore formations. This legislation was modified in 2005 which gave offshore companies the same status as domestic companies. Consequently, offshore companies in the British Virgin Islands (BVI) can never be taxed, such as on profits. So, what is the first step to BVI offshore formation?
One of the first stages is to set up a bank account. The money which is in an offshore site’s bank account is what will be subject to a minimal rate of tax. By providing the relevant documentation, a bank account can be formed in the British Virgin Islands very quickly.
International Business Company
There are many types of offshore sites in the British Virgin Islands but an International Business Company (IBC) is typically the most popular. An IBC is a private company which issues shares to board members and, of course, shareholders. There are certain stipulations attributed to forming an IBC such as reduced local activity and that it mustn’t own property in the British Virgin Islands. However, an IBC can rent premises for commercial purposes.
Board of directors
A BVI offshore company must have one director but there are no stipulations on what nationality they can be. One of the many appealing factors about a BVI offshore site is that investors can be associated with it but their details won’t be shared.
This is because a third party cannot obtain information about who is on the board of directors at an offshore site in the British Virgin Islands. However, if a proposed BVI offshore site cannot find a director, they can choose a nominee director service where investors are willing to give their details for a set price.
A secretary is not required and at least one shareholder must be at a BVI offshore site. A name for a proposed offshore site should also be thought of. Ending with Ltd or LTD, a BVI offshore site can also have Corporation, Corp and Inc.
Minimal share investment
A minimal share investment of $50,000 is required for the BVI offshore formation process to commence. This share investment is divided into 50,000 separate shares of $1.
Minimal paperwork is required to form an offshore company. A Formation Agent can provide all of the relevant paperwork which doesn’t take long to fill in as long as the pertinent information is known beforehand.
There are many fees which have to be paid by a business that is interested in the BVI offshore formation process. A Government Fee ($350), Registered Office ($300), Registered Agent ($300) and Incorporation Fee ($300) apply to a BVI offshore formation which is a total of $1,250. Next Year Fees of $950 also have to be paid. Although these are huge upfront fees, it is definitely worth paying because the amount of money which a business will save in taxes will be far more.
Finalize a formation
Once the aforementioned fees and paperwork have been submitted by a business or on their behalf by a Formation Agent, it normally takes a maximum of seventy two days to create an offshore site in the British Virgin Islands. Many businesses make the mistake of using an offshore site to trade with before it actually exists. To avoid any embarrassment, wait until a Formation Agent has confirmed that a BVI offshore site is a legal entity.
More advice on forming a company in the British Virgin Islands can be found from http://bvi.offshoreformations247.com/.