The British Virgin Islands (BVI) are located at the Caribbean Sea, 80 kilometres away from the east of Puerto Rico. The British Virgin Islands belongs to the British territory, obtaining full autonomy in 1967. To this day, it remains a member of the Commonwealth.
Companies in the British Virgin Islands are established in accordance with the 1984 International Business Companies (IBC) Act. Companies operating internationally from the British Virgin Islands are subject to fewer legal restrictions and reporting requirements.
The ultimate beneficiaries of a BVI company formation have no liability for disclosure under any governmental authority. Any transfer or issuance of shares by the company need not require approval from the British Virgin Islands governmental
However, offshore companies of the British Virgin Islands are prohibited from engaging in the following activities:-
- ( 1 ) Engaging business within the territory of British Virgin Islands ;
- ( 2 ) Possessing real estates in the British Virgin Islands ;
- ( 3 ) Engaging in banking or trust business ;
- ( 4 ) Engaging in insurance or reinsurance business ;
- ( 5 ) Engaging in the business of providing Registrar of Companies.
Requirements for BVI company formation
Name of BVI Company
The company name of a BVI company in formation in HK must include the word “Limited”, “Corporation”, “Incorporated”, “Societe Anonyme” or the abbreviation “Ltd”, “Corp”, “Inc”, or “SA”.
Using the word "Bank", "Credit / Care", "Insurance", or "The Fund" among others is not allowed.
BVI companies can have a name registered in Chinese, but the Chinese and English translations must be consistent.
Registered Capital
BVI companies do not have a minimum registered capital requirement. In the case of shares with nominal value of the stock, it cannot be less than the par value of the shares issued. Only fully paid shares can be issued, and the payment method can be in cash or another format. Shares can be issued with premium or surplus.
Share Certificate Book
A BVI company's shares must be issued by any two directors or officers with their signatures thereon. Alternatively, the company may issue shares with a seal stamp in the case that they have no director / officer’s signature.
Shareholders
The minimum number of shareholders for a BVI company after formation is one. Shareholder(s) and shareholding details must be recorded properly in its register of shareholders. Unless it is the company that chooses to file with the BVI Registrar of Companies, the shareholder’s information and the register of shareholders is not publicly available for inspection.
The beneficiary of a BVI company is not required to be disclosed to any BVI governmental agencies.
Annual General Meeting
There is no legal requirement for a BVI company to convene an AGM after formation. Shareholders' meetings can be conducted by telephone or other electronic means whether inside or outside the British Virgin Islands. Those who hold more than 50% of the voting shares of a BVI company can request the directors to convene a general meeting. At least seven days’ notice prior to the meeting must be given.
Those holding 90% of the voting shares may give up the right to serve notice of the meeting and attend the general meeting and to participate therein. This will be deemed as a renunciation of rights to notice. A BVI company by resolution of the members who are entitled to vote at the meeting can present for approval with a majority vote.
Members of a BVI company pass resolutions in written form as an alternative at the AGM.
Directors
The minimum number of directors of a BVI company is at least one person. Directors can either be an individual or a body corporate. A BVI company is not required to appoint senior management (e.g. president, secretary and treasurer). The Register of Director of a BVI company must be kept at its registered address in BVI after formation, but it is not required to be filed with the BVI Companies Registrar.
Companies are free to hold directors’ meetings anywhere all over the world and through any electronic means. Unless otherwise specified in the charter of the BVI companies, directors' meetings may be convened by the directors, and at the beginning of that meeting, those present in person or those present who act on behalf of all board members, form the quorum. If authorized by the charter, all directors may adopt a resolution in writing instead of being present at the meeting.
All directors' meetings must be recorded as minutes. But records of these meetings need not be retained in the British Virgin Islands.
Registered Agent
Each BVI company must have a registered agent in the British Virgin Islands upon formation. The BVI registered agent must be approved by the Company Management Act of 1990 or the 1990 Act Licensed Banks and Trust Companies.
The BVI registered agent is responsible for settling the British Virgin Islands government Annual License Fee as well as the registration and submission of documents.
The BVI registered agent must retain a copy of the Register of Directors and Members of the BVI company and keep a set of the same with its chop style thereon at the company's registered office.
The name of the BVI registered agent must be stated clearly in the company’s charter. A company failing to have a registered agent will cause its registered company name in the list be removed.
Company Chop
A BVI company may have a chop with its company name clearly engraved. However, the seal imprint must be kept at the BVI company registered address after formation.
Registered Address
Each company must have a registered address in British Virgin Islands. This address is usually the address of the registered agent in BVI. The BVI registered address must be specified in the charter of the Company and must be made available for public inspection upon formation.
Company Documents
A BVI company must have the following statutory records or documents:
( 1 ) The charter;
( 2 ) Its Certificate of Incorporation;
( 3 ) Its minute books of directors' meeting(s) and shareholders' meeting(s);
( 4 ) Register of directors;
( 5 ) Register of members;
( 6 ) Register of mortgage.
Items ( 1 ) and ( 2 ) are public records, items ( 4 ) to ( 6 ) are not open for public inspection unless the company chooses to file them with the BVI Registrar of Companies.
Company's Books
BVI companies are required to carry out accounting, book-keeping and records but it needs not to keep these books and records in the British Virgin Islands. There is no legal requirement for the company's books as well as the audit documents to be submitted to the British Virgin Islands governmental authorities.
Corporate Taxation
If the BVI company’s business is carried outside the British Virgin Islands after formation, it will not receive any tax return from any authorities of British Virgin Islands, but they still have to abide the respective tax regulations of the BVI companies where it operates.
Transfer of Shares
BVI shares can be transferred. Share transfer and the issuance of new shares can be passed by board resolutions. The instrument of transfer should include the transferor executed with the name and address of the transferee.
If the registry of members is not kept in Hong Kong, the transfer of its shares are not required to pay stamp duty.
BVI Company - Annual Fee / Annual License Fees
BVI companies have to pay the annual government license fees, agency fees, registration fees and address fees. The payment deadline depends on the date of company formation.
If BVI company formation occurs in in the first half of the year, the annual fee shall be examined in the second year after the date of its establishment. Thereafter it will be settled on or before 31 May each year.
If BVI company formation occurs during the second half of the year, then the annual fee shall be examined in the second year after the date of its establishment and the fees should be settled on or before 31 November each year.
Failure to settle the cost(s) within the prescribed time, may lead to being struck off the Registrar of Companies.
For more information about the BVI company formation services we provide in Hong Kong, please don’t hesitate to get in touch.