The
British Virgin Islands (BVI) are considered to be one of the premier
offshore jurisdictions in the world. Companies incorporated in the
BVI are utilised the world over for international trade, property
holding, personal service companies and asset holding vehicles.
They are generally considered to be one of the most flexible corporate
entities available. The jurisdictions itself benefits from a British
style legal system, common law legislation and has an excellent
reputation for professionalism and credibility.
The most commonly utilised Company is the IBC that
are able to trade and bank globally whilst retaining a zero tax
status. IBC’s have no requirement to file annual accounts
with the authorities and pay a fixed Annual License Fee to the BVI
Government of $350 USD per annum. However, GTA Worldwide recommends
that all Companies prepare annual accounts in the interests of good
corporate governance.
British Virgin Islands IBC - The
Benefits
- Low start up cost and low annual maintenance.
- Excellent reputation and credibility.
- Flexible Company legislation.
- Minimal reporting requirements.
- British style legal system.
- Professional business environment.
- World class financial institution based in the BVI.
- Highly qualified, well-educated and multilingual labour force
- DemGTAtic country with a free market economy
- Freedom of movement of foreign currency
- Political stability
- Efficient legal, accounting and banking services
- No capitalisation requirements for companies.
Operational Case
Study
Mr Khan is resident in Saudi Arabia and is looking for a corporate
vehicle with which to invest in the UK property market and invoice
clients in various Middle Eastern countries for his consultancy
work in the oil and petroleum industry. Mr Khan would also like
to avail himself to the flexibility of a Common Law jurisdiction.
GTA Worldwide incorporates a Company in the BVI for Mr Khan and
arranges banking facilities with a prominent world bank in London.
Mr Khan is appointed as the sole Director and Shareholder of the
Company and arranges finance, with GTA Worldwide’s assistance,
through the bank for the purchase of a £1,000,000.00 property
in Chelsea. The BVI Company is the registered owner of the property
and registers itself under the Non Residents Landlord Scheme as
the property is to be rented out to cover the finance payments.
The BVI Company can also claim UK tax relief on the interest of
the loan to set against any possible rental income profit.
3 years later, Mr Khan decides that he would like to sell the property
as the UK housing market has shown good growth. The House is sold
for £1,500,000.00 and has made a Capital Gain of £500,000.00.
No UK tax is levied on this gain as the property is owned by a BVI
Company and the monies are able to be held with the bank in London
for further use or reinvestment.
Throughout this time, Mr Khan has also been providing consultancy
services to major oil and petroleum companies in the Middle East.
These Companies insist on being invoiced by a registered corporate
entity. Mr Khan is able to invoice them monthly through his BVI
Company and have the fund remitted directly to his London based
bank account without attracting taxation. Allied to this, Mr Khan
is also benefiting from the Limited Liability that a BVI Company
affords him, so any threat of damaging litigation is greatly reduced.
Mr Khan is able to utilize his accumulated funds anywhere in the
world as he is able to access his bank account over the internet
and utilize a globally acceptable bank cards on the account.
Mr Khan has been able to realize the Capital Gain on the property
and remove any possible tax burden on the UK rental income. He has
also been able to utilize a world renowned bank in London to finance
the property purchase.
His consultancy services have been provided through an excellent
corporate entity that is able to invoice globally and remit his
fees to the London based bank account. He has protected himself
against any potential litigation and is able to utilize the BVI
Company in many countries.
Potential Issues
- Perceived lack of credibility by countries.
- Should not create a permanent establishment in another country
as this could trigger a tax charge.
- You should allow for the preparation of accounts in line with
accepted corporate governance.
Clients wishing to benefit by utilizing the BVI
should contact a Director or Consultant in any GTA Worldwide office.
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