British Virgin Isles - Offshore Company Location

The British Virgin Islands (BVI) has been a true phenomenon for the establishment of offshore companies in recent years. It has rapidly become the premier offshore corporate domicile with presently more than 200,000 international and non-resident companies registered.

Despite a trend by other offshore financial centers to replicate the pioneering International Business Company (IBC) legislation introduced by the BVI in 1984, the BVI has remained the clear leader in this field. Approximately 40,000 British Virgin Islands IBCs were formed in 1996 alone. It is instructive to assess the reasons behind this continuing success. The BVI can be said to have six key features which lie behind its popularity:

• British Dependent Territory status.

• Political and economic stability.

• English legal system (final right of appeal to the Privy Council in London).

• Codification of modern banking, company, insurance and trust laws.

• Maximum confidentiality practices.

• Internationally recognized reputation and respectability.

Other factors which have also been essential contributors to success include an enlightened Financial Services Department and a highly efficient BVI Companies Registry (both are BVI Governinent agencies). The Financial Services Department has maintained minimalist yet tight regulation to safeguard the integrity of the jurisdiction, and continues to initiate legislation which keep the Territory's laws among the most advanced and flexible to be found in any of the offshore financial centers. The BVI Companies Registry has introduced an advanced electronic name reservation system and is now capable of registering foreign language memoranda and articles of association. Despite the increasing volume, it continues to fulfill same-day incorporation orders, and has been invaluable in meeting international client needs.

The preferment and acceptance of the BVI by the international professional community has also been greatly assisted by a policy of partnership between the BVI Government and the private sector to ensure that policies and legislation meet the financial community's needs and interests. The BVI private sector includes two of the world's largest and most reknowned banks, Barclays (UK) and Chase Manhattan (US), as well as five of the top six accounting majors, and several of Europe's leading private banks and trust companies -- all of whom have established offices in the BVI.

It is with the private sector's development, carefully nurtured by benign policies to encourage growth by BVI Government, that the BVI has become much more than a single product jurisdiction, (ie: more than just the IBC). Today the Territory is utilised more and more as a true financial center in that IBCs are not only incorporated and registered in the BVI but nominee and director services, accounting, reinvoicing, bank deposit, bank lending and letters of credit services, investtnent management and private banking services are all capable of being handled in the Territory. A clear example of the expansion of services available is the growth of administration services for the mutual fund industry in the BVI, where it is estimated that US$50 billion of public and private mutual funds are presently administered in the Territory.

State-of-the-art telecommunications, provided by Cable and Wireless of the UK, and excellent infrastructure and support services have also been critical factors to the Territory's success. The proactive spirit of the Territory is exemplefied by the rapid recovery of electricity and essential services following each of three major hurricanes which passed over the BVI in 1996. In July of 1996, for instance, the eye of Hurricane Bertha passed directly over Tortola where the Financial Services Sector is located, and within 24 hours full electricity had been restored.

BVI Government has a clear understanding of the value and importance of the Financial Services Sector to the local economy. It is uncommon that any government devotes so much of its planning and resources to make the private sector so globally competitive. Government licence fees and charges by the BVI Companies Registry have remained unchanged and as such are extremely reasonable in contrast with other offshore jurisdictions.

Specifically, the British Virgin Islands operating environment offers the following key advantages:

• Simple, swift approval procedures, with a minimum of bureaucratic controls.

• Innovative, flexible, user-friendly legislation.

• No taxes on IBCs; low tax rate for domestic companies; no wealth, capital gains or estate taxes.

• Maximum privacy and confidentiality.

• Maximum confidentiality practices

• Asset security, and the freedom to transfer and merge assets.

• Protection of wealth benefits, inheritance wishes and trust interests.

• Minimum requirements in relation to (for example) the issuance of shares, designation of directors and shareholders, and maintenance of records.

• Legislative exemptions for qualified institutions.

The BVI Government is now committed to allow for the development and expansion of the Financial Services Sector, and it is with this is mind that new legislation is being introduced to include mutual flinds, shipping, limited life companies and limited partnerships. The Government policy behind such legislation will continue to be to provide "an attractive operating environment of minimum restrictive controls and fiscal burdens and maximum respect for privacy and operational ease and flexibility."

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