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Executive Summary
The British Virgin Islands (BVI) is located in the Caribbean Sea and is the British overseas territory. The population of the islands is around 20,000 people of which 18,000 live on its main island – Tortola, on which also the capital – Road Town, is situated. The population is of Caribbean and European origin.
It is an English-speaking country and is politically stable. The governor represents the Queen and leads the Executive Council. The economy is dependent mainly on tourism and financial services.
Financial Services Commission has been introduced in 2002 in order to regulate financial services industry and to ensure its legal occurrence.

The BVI is a comparatively not expensive jurisdiction with favorable tax environment to private and corporate entities. The government and Financial Services Commission are flexible and responsive to each particular business needs.

US$ is the currency used in the BVI.

Geography
The British Virgin Islands consists of approximately 50 small islands and cays, of which around 15 islands are inhabited. It is situated in the Caribbean Sea not far from Puerto Rico, Leeward and US Virgin Islands. It covers 153 sq km surface. The climate is subtropical but the wind helps support high temperatures and elevated humidity. Tortola is the biggest island. The BVI time is the Eastern Standard Time.

Mount Sage of 521 m is the highest point of the islands, which are rich with trees, particularly mahogany. The Coppermine was founded in the middle of the XIX century and is preserve also today. The beach line is “decorated” with beautiful pools with sea water.


Map, Flag and Coat of Arm


Types of Company

in 2007 a significant improvement has been made to the Business Companies Act making it the sole act of the jurisdiction for companies regulations. Company which has bearer shares must now provide the full name of the beneficial owner to the Custodian (corporate services provider licensed under the BVI financial industry regulations).

Hybrid “Cap 285” Company

This company usually has a group of shareholders that are different from a group of guarantors. Shareholders can have a full voting power. With the help of a trust it is possible to separate control and membership from the beneficial interests. The company can be either resident or non-resident


International Business Company
It is one of the most widely used forms of a business organization in the BVI under the form of a company limited by shares. An innovation in the legislation has been introduced in 2004 imposing the necessity to disclose existent bearer shares and introducing the requirement of record keeping. Registered shares can no longer be reregistered into bearer shares.

This company is allowed to own shares of other local companies, employ local professionals and it may have a bank account in the jurisdiction.

Limited Company (by guarantee)
The obligatory requirement for this structure is having at least two members, and the names of the members do not have to be stated on annual returns, and control of assets and business activity can be achieved without the use of shares. It can be either resident or non-resident as a company limited by shares.

Limited Partnership
A limited partnership is often formed by a registered agent and is regulated by the Limited Partnerships Act of 1996. Without having received a Certificate of Limited partnership from the Registrar, the organization is considered as a general partnership. Local partnerships can make local transactions, but are not tax-exempt, while international partnerships cannot act locally, but are tax exempt. A limited partnership has many rules in common with an international business company.
A limited partnership in the BVI was mainly created in order to facilitate the use of mutual and investment funds. Often at least one of the partners is a general partner with unlimited liability, while others are limited partners, who are liable only to the amount invested in the partnership, and their identity does not have to be disclosed.

Ordinary Resident Company (limited by shares
This company is incorporated for the purposes of conducting a local business. It should have at least two members, but must not have more than 50 shareholders. Its shares have restrictions on transfer and cannot be offered to a wide public.
Residence of the company is also dependent on the precise location of the major part of the company management, and if it is conducted from the BVI the company is considered to be resident.


Ordinary Non-Resident Company (limited by shares)
To this company the same regulatory rules as to a resident company apply, but taxation applies as for non-resident entities.

Public Company
An obligatory requirement for this type of company is to have five or more members, it is similar to a private company limited by shares, but it is allowed to offer its shares to a wide public

Trust
it is base on English Trust. In the BVI a fixed perpetuity period is no longer than 100 years, purpose trusts are allowed by the law. Trusts do not have to be registered under the Registration and Records Act and trustees are not required to make any reporting and do not have to submit annual return forms.

If no beneficiaries are resident in the BVI, if a trust does not conduct any business or does not own a land in the BVI, it is exempt from all the taxes.

Taxation

Private
Residents of the BVI are liable to local taxes and are defined as individuals who spend six months or more on the territory of the country. There is income tax, land and home tax as well as duty tax is payable on some transactions. However, there is no capital gain tax, inheritance or gift tax as well as no VAT.

Corporate
In 2007 a new legislation has been introduced in term of which companies are no longer liable to the income tax. In its place employees should pay a payroll tax, but the first US$ 7,500 are free of any tax.
A trust is exempt from the tax if it is created by or on behalf of a non-resident entity, and if it does not conduct any business and does not own any property in the BVI
 
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