British Virgin Islands
We can help you incorporate in British Virgin Islands
Business Company (Company limited by shares)
The British Virgin Islands (BVI) has long established itself as a significant jurisdiction for offshore company incorporation. It is recognized as one of the world’s most prominent centers for international business companies and plays a central role in the global structuring of cross-border investments and asset holding. While the jurisdiction itself has a relatively small domestic financial services sector, the volume of entities incorporated there positions the BVI as a leading offshore incorporation hub.
The BVI’s legal and regulatory framework blends a traditional common law heritage with modern legislative developments tailored for international use. The legal system is based on English common law, with local statutes and court decisions complementing the system. English is the official language, and the judiciary includes a Commercial Court with judges experienced in handling complex international disputes.
The territory offers a balanced approach to regulation—providing a stable and reputable platform for legitimate business activity, while minimizing unnecessary administrative burden. The regulatory environment is supported by laws designed to prevent financial crimes such as money laundering and tax evasion, in line with international standards set by the OECD and FATF.
BVI companies are widely used in Asia, particularly for structuring investments into and out of China. They are also frequently employed as holding companies for businesses listed on major stock exchanges. Notably, over 130 so-called “red chip” companies listed on the Hong Kong Stock Exchange (HKEX) use BVI-incorporated entities in their corporate structures. The BVI ranks as one of the largest foreign direct investors into both China and Hong Kong in statistical terms, largely due to this structuring.
Examples of BVI-incorporated companies listed internationally include Tianhe Chemicals Group Ltd., Winsway Enterprises Holdings Ltd., and Duoyuan Global Water Inc., among others. On the NASDAQ and NYSE, entities such as AGM Group Holdings Inc. and Biohaven Pharmaceutical Holding Company Ltd. are also structured through BVI companies. The use of BVI companies spans various sectors, including pharmaceuticals, energy, financial services, and consumer goods.
Companies in the BVI are incorporated under the BVI Business Companies Act, 2004, which allows for various types of entities, including companies limited by shares—the most common form. Shareholders subscribe to shares, representing ownership interests in the company.
There is no mandatory minimum share capital requirement, other than the issuance of at least one share at incorporation. Companies can issue shares with or without par value, and in different classes with varied rights concerning:
- Dividend distributions
- Voting entitlements
- Participation in meetings
- Rights on liquidation or winding up
Share capital can be denominated in any currency. To avoid increased annual government fees, companies typically authorize up to 50,000 shares or share capital with an aggregate par value of up to USD 50,000. Shares can be issued at a premium to their par value if applicable without impact in the government fees.
Corporate governance is managed through a board of directors, appointed by the shareholders. Directors may be individuals or corporate bodies and are not required to reside in the BVI. There are no restrictions on the nationality or residence of either shareholders or directors. Directors have authority to bind the company in contractual and other legal matters. The company’s internal rules are set out in its Memorandum and Articles of Association, which must comply with the Business Companies Act.
The BVI does not impose corporate income tax, capital gains tax, or withholding tax on dividends or interest for BVI Business Companies. However, payroll taxes apply to local employment within the territory. This makes the jurisdiction tax-neutral for most international uses, though companies must comply with tax obligations in other jurisdictions where they operate or have tax residency.
Every BVI company must maintain a registered agent and a registered office within the territory. There is no public filing requirement for financial statements or tax returns. However, all companies are subject to certain statutory maintenance and reporting obligations.
Key compliance requirements include:
- Annual Return: All BVI companies must prepare and file an annual return with their registered office, including a statement of financial position and a statement of income. This must be done within nine months of the end of the financial year. For calendar-year reporting, the deadline is typically 30 September of the following year. This return is not submitted to any public authority but must be retained and confirmed by filing a notification with the Registrar.
- Registers: Companies must maintain registers of directors, register of shareholders and register of beneficial owners. These registers must be kept at the registered office or another designated location in the BVI. The Registers must be filed with the Registrar of Corporate Affairs
- Economic Substance Reporting: Companies engaged in certain business activities are subject to the Economic Substance (Companies and Limited Partnerships) Act, 2018. These companies must file an annual economic substance return and demonstrate that their relevant activities are being conducted in a manner consistent with prescribed substance requirements.
Entities conducting relevant activities must meet certain thresholds to demonstrate substantial economic activity in the BVI. Relevant activities include:
- Banking
- Insurance
- Fund management
- Finance and leasing
- Shipping
- Intellectual property business (with enhanced requirements if deemed high-risk)
- Distribution and service centre activities for affiliated entities
- Pure equity holding (with reduced obligations)
Substance is assessed based on factors such as:
- Direction and management of the activity from within the BVI
- Adequate physical presence, staff, and operational expenditure in the BVI
- Presence of physical premises, and, where relevant, equipment necessary to the core activity
BVI Business Companies are used for a wide array of international commercial purposes. These include:
- Holding and managing global investment portfolios
- Serving as vehicles for joint ventures or group structuring
- Facilitating international trade, ship or aircraft registration
- Asset protection and estate planning
- Providing platforms for public listings and private equity investment
Their flexibility, simplicity of maintenance, and recognition in global markets make BVI companies a preferred choice for many cross-border commercial activities.
Legal
Country code – VG
Legal Basis – Common law
Legal framework – BVI Business Companies Act, 2004 (As amended)
Company form – Business Company (Company limited by shares)
Liability - The liability of the shareholders is limited up to the amount of the shares they hold.
Economic Substance - Adequate economic substance is required for BVI Business Companies conducting relevant activities pursuant to the Economic Substance (Companies and Limited Partnerships) Act.
Relevant activities include:
- banking i.e. banking business
- insurance i.e. insurer
- finance and leasing i.e. business of providing financing or leasing of assets
- fund management i.e. companies licensed under the Securities and Investment Business Act for the management of collective investment schemes
- distribution and service center business i.e. reselling goods to affiliated companies or providing services to affiliated companies. Affiliated company is defined as a company which is part of the same group (e.g. parent-subsidiary, sister entity with common parent company, etc).
- headquartering i.e. providing management services to affiliated companies
- intellectual-property business i.e. holding and exploiting IP assets, generating identifiable revenue from such assets. Please note that the provision of services for developing IP assets or holding or using IP assets for ordinary commercial or service business is not considered an intellectual property business. IP businesses are those that generate separate and identifiable revenue from IP assets (e.g. patent licensing)
- shipping i.e. transportation by sea of persons, animals, goods or mail, the renting or chartering of ships for such transportation, management of ship crew, sale of travel tickets, the use, maintenance or rental of containers, including trailers and other vehicles or equipment for the transport of containers, used for the transport of anything by sea
- and pure equity holding company, companies that only own equity interests in other companies, and only earn dividends and capital gains.
Economic substance will be mainly assessed according to the following criteria:
- the relevant activity is directed and managed in the BVI;
- adequate numbers of suitably qualified employees who are physically present in the BVI (whether or not employed by the relevant legal entity or by another entity and whether on temporary or long-term contracts);
- adequate expenditures incurred in the BVI;
- appropriate physical offices or premises in the BVI; and
- where the relevant activity is the intellectual property business and requires the use of specific equipment, the equipment is located in the BVI.
Pure equity holding companies are subject to a narrowed economic substance test and may meet substance requirements by maintaining adequate employees and premises in the BVI, which in most cases is fulfilled by maintaining the registered agent and registered office only.
All BVI Business Companies must provide information on an annual basis to enable the International Tax Authority in the BVI to assess whether a business is carrying out relevant activities and, if so, whether it is meeting the economic substance requirements.
Failure to comply with substance requirements may lead to a minimum penalty of USD 5,000 and to a maximum penalty of USD 50,000 (High-risk IP) or USD 20,000 (other businesses).
Additional penalties may be applied if a company continues to fail substance requirements from a minimum amount of USD 10,000 to a maximum amount of USD 400,000 (High-risk IP business) or USD 200,000 (other businesses)
Share capital – There are no minimum share capital requirements. The authorized share capital to attract the lowest government fees consists of a maximum of 50,000 shares and when shares have par value, the aggregate par value of such authorized shares to not exceed USD 50,000. At least one share must be issued at the time of incorporation. There is no statutory requirement for the issued capital to be fully or partly paid on incorporation.
Shares may be redeemable; confer no rights, or preferential rights, to distributions; confer special, limited or conditional rights, including voting rights; confer no voting rights; participate only in certain assets of the company; where issued in, or converted to, one class or series, be convertible to another class or series, in the manner specified in the memorandum and articles of association.
Shares may be with or without par value.
Shareholders – Business companies may be formed by one or more shareholders, who can be either natural or legal persons, residents or non-residents. Details of shareholders are not publicly disclosed.
Directors – At least one director is required, who may be a natural person or a legal entity, resident or non-resident. The name of active directors is available upon requesting an official search report to the Registrar of Corporate Affairs. Search reports can only be requested by VIRRGIN users (e.g. registered agents).
Secretary – The appointment of a secretary is not required.
Registered Address – A BC must have a registered address in British Virgin Islands, provided by a licensed registered agent.
General Meeting – Annual general meetings are not mandatory, can be held anywhere, and may be conducted by telephone or other electronic means.
Electronic Signature – Permitted.
Re-domiciliation – A foreign entity can be re-domiciled as a BC BVI, and vice versa.
Compliance – BVI companies must pay annual government fees to the Registrar, keep a copy of the registers of the company in the registered office in the BVI, and submit a notification advising on whether the company has carried on any relevant activity for economic substance purposes.
Business Companies are required to keep accounting records and underlying documentation, but its location can be freely determined. There is no requirement to file financial statements, nor annual return.
- Shareholders not disclosed
- Directors not disclosed
- Corporate shareholders permitted
- Corporate directors permitted
- Local director required
- Secretary required
- Local secretary required
- Annual general meetings required
- Redomiciliation permitted
- Electronic signature
- Annual return
- Audited accounts
- Audited accounts exemption
- Exchange controls
- Common law Legal basis
- 1 Minimum shareholders
- 1 Minimum directors
- - Minimum issued capital
- - Minimum paid up capital
- USDAny Capital currency
- Anywhere Location of annual general meeting
- 2017 AEOI
Taxes
Corporate income tax – The British Virgin Islands does not levy corporate tax, including no taxes on capital gains and investment income. All dividends, compensations, rents, and royalties are also exempted from BVI taxes.
No withholding tax is levied on dividend, interest and royalty payments to non-residents.
Although there is no tax on interest the BVI has implemented the EU savings directive which means that agents making interest payments to residents of an EU member state will automatically exchange information with the relevant member states tax authority with respect to the identity of the beneficial owner and the payment.
Other taxes – BVI does not levy direct personal taxes. Personal income, as well as, capital gains, net wealth and inheritances are not subject to taxation.
There is a stamp duty is imposed on the transfer of land in the British Virgin Islands. It is imposed on the contract value or the market value and ranges from 4% to 12%.
Land tax is levied annually at USD 50 for a half acre or less and USD 150 between half an acre and one acre. Each additional acre or part of an acre is taxed at USD 50.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- 0% Offshore Income Tax Rate
- 0% Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- 0% Personal Income Tax Rate
- 0 Tax Treaties
Country details
The British Virgin Islands (BVI), officially the Virgin Islands, are a British overseas territory located on the Francis Drake Channel, east of Puerto Rico, in waters of the Caribbean Sea. The islands are part of the archipelago of the Virgin Islands, the other islands being part of the United States Virgin Islands and the Spanish Virgin Islands belonging to Puerto Rico.
The archipelago is made up of about forty islands, of which eleven are inhabited. The largest are Tortola, Virgin Gorda, Anegada and Jost Van Dyke. Its population is 27 800 inhabitants, living 23 000 on the island of Tortola, where it is located Road Town, the capital.
The executive power of the British Virgin Islands is shared between the monarch of the United Kingdom who is represented by a governor. This governor is appointed directly by the King on the advice of the British Government. Defense and foreign affairs are under the responsibility of the United Kingdom.
The BVI is one of the most prosperous economies among the Caribbean states, with one of the highest GDP per capita worldwide. Political stable, with modern infrastructures and a pro-business environment. Its main sectors are offshore financial services and tourism. Due to its close relationship with the US Virgin Islands, the US Dollar is the official currency.
The British Virgin Islands is one of the world's largest offshore financial centers and a world's leading center for company incorporation. The sector accounts on over half of the jurisdiction’s GDP and incorporation fees account for more than half of Government revenue.
The other significant economic sector is tourism, which approximately contributes to nearly half of the national income and employs a great part of its population.
The islands are a popular destination for its numerous white sandy beaches, the Baths of the Virgin Gorda, scuba diving on coral reefs near Anegada, the well-known bars on the Jost Van Dyke, or chartered yachts for exploring the less accessible islands.