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Companies fall under two general categories:
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Domestic Companies |
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International Business Companies |
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Domestic Companies
These are incorporated in the BVI under the Companies Act CAP 285 ("CAP 285s") and may do business within the Territory and, subject to their Memorandum of Association, elsewhere in the world. CAP 285s are designated as resident companies if the principal place of business is within the Territory or a majority of directors reside in the Territory. CAP 285s are subject to BVI taxation, albeit at different rates depending on the resident/non-resident classification, and must make annual returns to the Companies Registry showing directors and shareholders information.
International Business Companies
Since the introduction of modern legislation, in the form of the International Business Companies Ordinance in 1984, the dynamic rise in the number of company formations in the BVI has been one of the most spectacular success stories in the offshore industry worldwide.
IBCs are companies incorporated in the BVI under the International Business Companies Act, CAP 291, as the Ordinance is now called. The Act came into force in August, 1984 and other than the restrictions given below
or any in the Memorandum of Association, companies incorporated under this Act may engage in any activity that is not illegal under the Laws of the
BVI.
Restrictions
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an IBC may not carry on business with any person resident in the Territory; |
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an IBC may not own any interest in real property in the Territory, other than the lease of an office; |
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an IBC may not carry on banking or trust business, insurance or reinsurance business, brokerage or agency or company management business, unless appropriately licenced under BVI legislation or provide the registered office or registered agent for BVI companies. |
This innovative legislation combines local insight with a distillation of the more attractive provisions of company legislation internationally. The following is a summary of the significant features under the IBC Act:General
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IBCs are completely exempt from local taxation and there are no exchange control regulations. |
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Subject to any provisions contained therein, a simple majority of members or directors is required to: |
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amend the Memorandum and Articles of Association; |
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change the name of the company; |
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increase the capital; |
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enter into voluntary liquidation. |
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Incorporation
This is achieved by filing the Memorandum and Articles of Association signed and witnessed by the proposed registered agent. A Certificate of Incorporation is then issued by the Registrar and the Company legally exists from the date of the issue of the certificate of incorporation (usually the date of filing the M&A).
The Company pays an incorporation fee of US$300.00 and an annual licence fee of the same amount (fee increases to US$350.00 if shares have no par value and US$1,000.00 if authorised capital exceeds US$50,000.00).
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To denote limited liability the company may use "Limited", "Incorporated", "Societe Anonyme", "Corporation" or "Socieda Anonima" or any abbreviation thereof anywhere in its name. |
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A name can be reserved for up to 90 days prior to the incorporation of a company. |
Share Capital
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An IBC may issue registered or bearer shares and each type may be exchanged for the other. |
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Shares may be issued in any combination of currencies, for any kind of consideration and with or without par value. |
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An IBC may also purchase, redeem and reissue its own shares from shareholders and hold them or cancel them altogether, making an IBC an ideal vehicle for mutual funds. |
Directors and Shareholders
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There need only be one director and one shareholder and these may be individuals or corporations of any nationality or residence. |
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Meetings of both directors and shareholders may be held anywhere in the world and may be by telephone or proxy. |
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There does not need to be an Annual General Meeting. |
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There is no requirement to appoint officers. |
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Resolutions and minutes may be effected by faxed signature without the need for actual meetings. |
Re-domiciliation
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An IBC may transfer its domicile out of the Territory, by resolution of its directors or of its shareholders, provided that the laws of the jurisdiction permit the continuation. |
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Companies incorporated in foreign jurisdictions may continue under the IBC Act by applying to the Registrar to be continued in the Territory and filing Articles of Continuation approved by a majority of the directors. These must be accompanied by a copy of the original Memorandum and Article of Association or their equivalent, defining the constitution of the Company (translated into English if applicable) and evidence that the Company is in good standing. |
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An IBC must have a local Registered Agent and Registered Office in the BVI. Dantrust Limited has obtained the required licence to provide
these services for IBCs incorporated in the BVI. |
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