British Virgin Islands Tax Haven. Benefits of forming a company in British Virgin Islands Tax Haven
Those who prefer to straightaway get information on how to form a BVI Offshore Company in the British Virgin Islands tax haven should click here: BVI Company Registration.
About the British Virgin Islands Tax Haven
The British Virgin Islands, or BVI for short, is a group of fifty islands in the Caribbean forming a British Overseas Territory. The main islands within this group are called Tortola, Virgin Gorda, Anegada and Jost Van Dyke. They have been autonomous from Britain since 1967. While the official name is the Virgin Islands, they are usually called the British Virgin Islands to separate them from the nearby American Virgin Islands.
Their economy is currently focused on financial services and tourism. Financial services is by far the most economically important sector and over 50% of the territory’s income comes from license fees paid to the government by off-shore firms. The British Virgin Islands has since the 1960s become one of the most important players in the financial off shore industry with more than 45% of all off shore companies being incorporated in the BVI. Its beneficial tax legislation, as well as high degree of privacy regarding financial transactions have made BVI one the most important so-called “tax havens”.
Why is British Virgin Islands considered to be a tax haven?
A tax haven is – according to the OECD – a jurisdiction that seeks to make itself attractive to businesses and business owners seeking more favorable tax treatments than those available in their country of origin or residence. As such a tax haven provides beneficial terms under which either new companies can be incorporated or off-shore entities of already existing companies can be established.
The “British Virgin Islands tax haven” has come about through the creation of a very simple set of corporate taxation rules that offer a highly beneficial taxation system. The British Virgin Islands does not have any capital gains tax, gift taxes, sales tax, value added tax, profit tax, inheritance tax or corporation tax. Salaries paid to employees employed by an off-shore company established in the BVI tax haven are taxed at 8% for the employee the remaining percentage up to 12% or 14% for the employer for any salaries above $12,000.
The relative simplicity of these tax regulations along with the low tax rates explain why British Virgin Islands has become one of the most popular places for off-shore establishment of businesses. The BVI tax haven also offers another important benefit – relative privacy of details regarding financial transactions as well as corporate incorporations. This allows companies to configure their own corporate structure without harmful interference or risk of competitors gaining access to undue information.
Advantages of forming a company in the British Virgin Islands
Forming a company in the British Virgin Islands tax haven means setting up a so-called British Virgin Islands Business Company or BVI BC. These are the most popular form of off-shore companies in the world. They are available to residents of any country in the world and can be formed as a continuation of another company in another part of the world. There are many benefits to a BVI BC:
- 0% corporate tax
- 0% capital gains tax
- 0% profit tax
- 0% gift tax
- 0% sales tax / Value Added Tax
- 0% inheritance tax
- No stamp duty except for land transactions in the British Virgin Islands itself
- No restrictions on doing business anywhere in the world
- Ability to transfer and repatriate money without fees
- No currency exchange fees or limitations
- No need to publicise company directors, officers, owners or shareholders
The British Virgin Islands tax haven is backed by a politically stable government with a long history of providing a beneficial off shore environment for companies. The BVI has never been blacklisted by the OECD and due to its long history is also a well-known location for off shore establishments. This means that external entities such as banks are well familiar with the British Virgin Islands tax haven incorporation and registration documents and structures. The British Virgin Islands tax haven legal system is also based on English Common Law, making it well-known and familiar to both in-house legal and administrative teams as well as external corporate lawyers. However, the BVI is a completely independent juridical entity and their great dependence on the financial services industry means that any new laws made are created in consultation with the financial services sector.
The British Virgin Islands tax haven also has no double taxation agreements with any other countries except for Japan and Switzerland. This is an important feature as it means that the BVI is under no requirement to disclose or share any information about income, profits or other transactions of any BVI BC, directors, shareholders or beneficial owners. This is in part due to the fact that the BVI have kept a high standard of living and never needed to enter into such agreements in order to secure aid or access to goods and services from other countries.
Another important benefit in the British Virgin Islands tax haven is the fact that the US dollar is the official currency. This greatly simplifies reporting and management of business finances for an off-shore registered in BVI – whether it is a subsidiary of a company elsewhere or a company fully incorporated in the BVI. Further, as English is the official language an incorporation procedure in the British Virgin Islands will be conducted entirely in a familiar language without the need of costly translations of forms and/or official documents.
Who can benefit from company formation in the British Virgin Islands?
Almost any company or individual involved in international business can benefit from a BVI BC. This is illustrated by the fact that the large share of off-shore registrations are done in the British Virgin Islands tax haven. The British Virgin Islands tax haven’s beneficial and simple taxation and regulation structures allows for both efficient and cost-effective registration as well as ongoing administration.
An incorporation in the British Virgin Islands is especially beneficial for those who seek to have a highly confidential and private corporate set-up – perhaps in the context of potential interest in the corporate’s accounts by competitors or other agencies. The unique flexibility offered in incorporating BVI BCs mean that companies with highly specialised requirements as to their structuring from both an administrative and financial perspective can easily set up the type of corporate structure they require.
The fact that British Virgin Islands has good links to all other areas of the world both through transportation, shipping and air as well as financial services combined with a reputation for being a well-managed tax haven and recognition as one of the oldest and most well-known tax havens in the world means that it is especially suitable for those whom offer services and products in unstable or remote parts of the world and need a trusted base for their financial operation.
Incorporation in the BVI tax haven can also be of great benefit to high net worth individuals seeking to establish a home for their personal businesses as it allows them to flexibly manage both their current assets as well as potential future estate. The lack of inheritance taxes as well as the ability to nominate a small number or even only one director means that they can protect their family wealth both from excessive taxation as well as outside influence.
There are a wide range of benefits to incorporating a BVI BC in the British Virgin Islands tax haven. The British Virgin Islands tax haven offers a well regarded site for incorporation for any international subsidiary or as part of a tax planning effort by anybody with a high degree of international business dealings. Beyond offering no taxation, BVI BCs also ensure secrecy and flexibility for the owners and managers of such firms as well as cost effective and simple registration and administrative regulations. As such, BVI BCs are understandably one of the most popular off-shore vehicles in the world.
British Virgin Islands Tax Haven – Cost of BVI BC Formation
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BVI Company Formation – Office Addresses
Services in the British Virgin Islands Tax Haven
Worldwide Incorporation Services provides the following services in the British Virgin Islands Tax Haven:
- BVI BC Formation
- Registered Office and Agent Services
- BVI Company Secretarial Services
- Nominee Shareholder / Nominee Director
- Opening of Bank Accounts in the British Virgin Islands
- Full BVI BC Administration Services
- Mailing Address in the British Virgin Islands
- Trademark Registration
- Yacht Registration
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