BVI Offshore Advantages
The British Virgin Islands is by far the most popular jurisdiction in the world for International Business Companies (IBCs).
The international financial and tax planning community can and does seek out those jurisdictions which best accomplish its various requirements. In the BVI, over 600,000 IBCs have been incorporated to date, with approximately 50,000 incorporated last year alone! The reason for this BVI preeminence in offshore company formation lies its unique combination of those factors that are most important to the diverse elements that make up the international financial community.
Some of the more important factors contributing to the success of the British Virgin Islands are:
- the BVI are a British Overseas Territory, with the inherent political stability that this brings.
- the BVI has been free of major political scandal, unlike many other Caribbean offshore centres.
- the currency of the BVI is the U.S. dollar and there is no domestic currency whatsoever. Not only are there no currency controls, but with the US$ used as the BVI currency, it is essentially impossible for the government to regulate the money supply and hence to ever impose currency controls.
- the BVI is well served by air transportation and international communications. It is in the Atlantic time zone, making it the same time as Eastern Standard Time (New York, Toronto) in the summer and one hour earlier in the winter. (There is no Daylight Savings Time in the BVI.)
- although many Caribbean jurisdictions do not have actual tax treaties with the U.S. or Canada, many have, under pressure, signed some form of information sharing agreement, often under the Caribbean Basin Initiative (CBI). The British Virgin Islands has a much higher standard of living than most of the non-U.S. Caribbean; moreover, the BVI is a small country, with a very successful financial services sector. Revenues from international financial business provide the largest single contribution to BVI government revenues. Thus "membership" in the CBI, which is a form of economic assistance program but which also requires an arrangement to share financial information and records, has no attraction for the BVI.
- Despite its international popularity as an offshore financial centre, the BVI does not have the high profile, attention getting reputation of other centres. It represents an ideal offshore location for clients seeking confidentiality without the 'red flags' that are often raised through the use of more well publicised centres.
- IBC formation legislation in the BVI is both modern and very flexible, in fact it is the model upon which much of the other Caribbean IBC formation legislation is based. The legislation requires only one shareholder and one director (both of which may themselves be other corporations); no corporate officers are required; bearer shares are permitted; there is no requirement for an annual general meeting; the company need only keep such accounts and records as the Director(s) think appropriate. The BVI government need not be informed of the identity of the IBC's shareholders or directors. Many of the benefits of the BVI flow from this combination of a very high level of flexibility and the unquestioned confidentiality.
More information is given in the preceding overview, but the basic point is quite simple. The BVI is by far the most popular jurisdiction in the world for IBCs because it provides the best combination of those qualities that the international financial professional seeks out when establishing such a company for his clients.