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Versatility and Agility Remain Keys to BVI’s Success

The British Virgin Islands are world-renowned for superb corporate services, as Sabinah Clement, managing director, BVI, and Shanica Maduro-Christopher, vice president, BVI, discussed in our recent webinar.

The British Virgin Islands (BVI) is a British Overseas Territory known for white sand beaches, clear blue waters, and coral reefs. It’s also the largest center for international company formation in the world. Approximately 370,000 active corporate entities are registered in BVI, holding an estimated USD 1.4 trillion in assets.[1]

The islands are an attractive jurisdiction for large organizations managing multiple subsidiaries—and also for individuals seeking asset holding entities or succession planning structures.

In the most recent webinar in our new series, Doing Business Internationally: British Virgin Islands, Sabinah Clement, managing director, and Shanica Maduro-Christopher, vice president, discussed the territory’s key qualities as a financial services center.

Financial services drive the BVI economy

The BVI are a magnet for tourists and international business, but of these twin economic strands, financial services is the most important for government revenue. The sector accounts for well over half of the government’s income.[2]

Corporations, fund managers, family offices, and wealthy individuals are attracted by BVI’s stable political environment, secure economy, and legal system based on English common law. The importance of outside investment to the economy is clear and the government is keen to promote it.

Over several decades, the territory has produced a corporate legal framework that is among the simplest and most flexible in the world. The vast majority of entities are incorporated under a single piece of legislation—the BVI Business Companies Act, enacted in 2004 and last amended in 2022. This is an exceptionally cost-efficient mechanism, and BVI’s embrace of digital filing means that most company incorporations can be completed in less than 24 hours.

There are generally no minimum resident director requirements for a BVI business company. Another benefit is confidentiality—director and shareholder details do not have to be made publicly available. BVI is a tax-neutral jurisdiction, which means the corporate tax rate is zero and there are no capital gains taxes or other wealth taxes for companies incorporated in the territory.

Doing business in BVI: A versatile financial center

All of this provides the foundations for success, but the BVI’s enduring appeal is also based on its refusal to take that success for granted. Thanks to its self-governing status and pro-business stance, BVI has a reputation for reacting quickly to the changing needs of the market. That might mean introducing innovative entity types or complying with evolving global regulatory standards. Whatever the details, BVI has repeatedly shown that it will update legislation to maintain competitive advantage. The results of that willingness to innovate include a world-leading insolvency system and a commercial court for the financial services industry.

A wide range of corporate structures

The BVI also includes an all-encompassing portfolio of corporate structures. BVI made its name with the creation of the groundbreaking BVI business company, which is by far the most common legal structure in the territory.

BVI business companies, formed under the BVI Business Companies Act, are used for investment funds and segregated portfolio companies. They benefit from BVI’s tax neutrality, and a service provider’s address can be used as the registered office.

Business companies are flexible, beneficial, and easy to set up, but a full range of other structures are available. These include special purpose vehicles, private trust companies, and limited partnerships. A particularly unique example is the incubator fund. It’s a low-cost, low-maintenance investment vehicle designed for startup funds.

BVI companies require a corporate services provider

The appeal of the BVI’s agile and business-friendly system is shown by the fact that companies registered in the jurisdiction hold assets equivalent to 1.5% of global GDP.[3] And like the yachts that visit its tranquil waters, international clients usually find incorporation and entity management relatively plain sailing. Nevertheless, they’re required by law to engage a registered corporate services provider.

These third parties help clients navigate sometimes complex anti-money laundering (AML) and tax transparency regulations. Know Your Customer (KYC) checks are also thorough. And while those services are required, third-party support throughout the entity life cycle also makes sound business sense.

BVI companies can be structured in many ways, and local expertise can identify the most suitable vehicle for any purpose. A good service provider will then maintain that entity in the most efficient way and make sure it remains in good legal standing. The requirement for third-party help means the corporate services sector is well established in BVI. In CSC’s case, many of our experts have been in the industry for 25 years. Clients can expect robust local and global knowledge, and advice based on real-world experience.

Why CSC?

CSC provides knowledge-based solutions for every phase of the business life cycle, helping businesses form entities, maintain compliance, execute transaction work, and support real estate, M&A, and other corporate transactions in hundreds of U.S. and international jurisdictions.

We work with some of the world’s largest banks and commercial lenders to reduce risk in their lien portfolios, improve their transaction speeds, and create a secure environment for their financial processing needs. We also provide solutions for secure real estate document preparation and recording.

We are the trusted partner for 90% of the Fortune 500®, nearly 10,000 law firms, and more than 3,000 financial organizations. Headquartered in Wilmington, Delaware, USA, since 1899, we are a global company capable of doing business wherever our clients are—and we accomplish that by employing experts in every business we serve.

Missed this webinar? Watch it on demand and register for the full series here.

[1] BVI Finance

[2] Bloomberg

[3] BVI Finance