Incorporation of BVIs (British Virgin Island) Companies

Types of Companies

The British Virgin Islands or the BVIs as they are commonly referred to, offer the several types of Company formation with the limited by shares company been the most popular option as it is the simplest form of Company offered.

BVI company types

• Companies limited by shares
• Companies limited by guarantee (with or without authorisation to issue shares)
• Unlimited companies
• Segregated portfolio company, and 
• A restricted purpose company

Advantages

• Tax Free
• No filing requirements
• No separation from local companies
• No public record of shareholders, directors, M&A articles
• Bearer shares are still permitted
• Flexible set up (one / same director, owner, shareholder)

Disadvantages

• Management accounts must be prepared
• Confirmation that management accounts are available must be provided annually to the local registered agent
• Directors details are filed at the local registrar (but it is not publicly available)
• It is more expensive than similar jurisdictions (Belize,)
• Local agent to facilitate the incorporation process is needed
• Banks usually request management accounts / or audited accounts of BVi companies

Disadvantages

The Islands (Wikipedia)

The owner of the Company must provide to the registered agent KYC (Know Your Client) information such as passport and recent utility bill and sometimes a bank reference letter. This information stays with the registered agent.

Responsibilities

• No annual meetings need to take place
• Meetings can be physical or via electronic or telephone means
• The director, officer and shareholder of the BVI Company can be an individual or a Company (including a fiduciary) of any nationality or jurisdiction.

Exchange of Information

Following Europes and the United States of America common attempts to fight against international crime and terrorist activities the majority of countries over the world have signed banking and taxing exchange of information. The countries that have not signed these agreements are commonly referred to as black listed jurisdictions and these are jurisdictions where banking activities are scrutinised by all international banks and rejected. The same applies for various tax credits.  It is worth mentioning that such exchange of information only takes place amongst participating states in a strict manner following relevant protocols, agreements and international agreements between the countries.

The BVIs have also joined the banking exchange of information agreements FATKA and CRS and TIEA 

The Banking Agreements

FATCA & CRS

FATCA which stands for Foreign Account Tax Compliance Act, requires that any financial institutions such as banks, investment firms and any service provider such as lawyers accountants and registered agents submit to the USA information about the Ultimate Controlling Party and Entities tax jurisdiction. This information is updated annually. Learn more about FATKA.

CRS which stands for Common Reporting Standard is a mechanism whereas all participating banks automatically send information for their non locally tax resident clients who use "passive" banking facilities to their central banks and the latter the send this information to the ECB which maintains these data.

The Tax Agreements (TIEA)

TIEA stands for Tax Information Exchange Agreement (TIEA) and it is currently signed by more than twenty countries; USA, Germany, UK, France and many others. Unlike the CRS and the FATCA, the TIEA is NOT automatic; it is upon request by a participating Government. To be pursued, the overseas Government must have serious, justified grounds for the enquiry which must be evidenced on solid grounds. If the strict procedures and evidence is accepted by the local Government (say the BVIs), then the BVIs may confirm the information the enquiring Government already has in its possession and NOT to disclose any other additional information held by the BVI.