Over time, the British Virgin Islands (BVI) has built its reputation as a premier offshore financial centre. Entrepreneurs across the world are regularly enticed by its many benefits, its stable political environment, and a sophisticated legal system that’s rooted in English common law. There were over 360,000 active companies in the nation as of the third quarter of 2023, with more growth being expected as the years come.
Knowing that, the question is – why set up a company in the British Virgin Islands?
It all comes down to two words, which are business advantages. The BVI boasts investor-friendly policies and a regulatory framework that also favors entrepreneurs. Be it tax benefits, confidentiality, or convenience, there are countless reasons to choose the nation as your next business hub.
Tax Benefits of Setting up a BVI Business
One of the primary attractions of establishing a company in the BVI is its tax-efficient structure. Investors all over the globe are regularly brought over by the company’s advantages, which include:
Zero Corporate Tax: Companies established in the BVI benefit from the absence of corporate income taxes. As a result, profits generated by businesses in the country can be taken home in full, allowing entrepreneurs to reinvest earnings for growth or distribute them to shareholders without incurring local tax liabilities.
No Capital Gains Tax: Any gains from the sale of shares, investments, or other company assets are free from capital gains tax. Entrepreneurs can take advantage of these significant financial perks, particularly when planning exits or capitalizing on equity growth.
No Withholding Tax: Dividends, interest, and royalties paid to non-residents are not subject to withholding taxes in the BVI. This policy enhances the attractiveness of setting up holding companies or investment vehicles that distribute profits internationally.
No Inheritance Tax: High-net-worth individuals that are planning for legacy and succession can benefit from the absence of inheritance or estate taxes, allowing for seamless transfer of assets without additional tax implications.
Known as a tax haven among entrepreneurs and investors, the BVI also offers zero sales tax, gift tax, or value-added taxes. These are sure to entice entrepreneurs, especially because there are many types of businesses that will benefit from setting up in the BVI. Whether it’s a financial services firm, a tourism agency, or real estate business, a wide range of industries can thrive in the islands.
What Else Awaits BVI Business Owners?
For most entrepreneurs, the aforementioned tax benefits would already be enough of an incentive to set up in the BVI. But even more advantages are available for interested investors, all creating an irresistible opportunity that can’t be ignored.
One is that the BVI offers a high degree of privacy. Certain regulations make it so that businesses are not required to make any public disclosures of company directors or shareholders. If confidentiality is a priority, then a company in the BVI can give entrepreneurs just that.
In terms of business setup, the process doing so in the BVI is also incredibly straightforward and efficient. It takes only about two to three working days to establish a BVI-based firm, which means that businesses can be operational right away and with minimal administrative hurdles.
And once the company has been set up, global operations will be a breeze as well. The BVI easily facilitates cross-border investments, accelerating the movement of around $1.5 trillion in international transactions, according to a BVI Finance report. Finding worldwide opportunities comes with no challenges in the country.
How to Set up a Business in BVI: Step-by-Step
As mentioned, the setup process for the BVI is simple and efficient. The steps are:
- Appoint a local agent to handle any BVI-based correspondences
- Prepare and submit the necessary documents and compliance requirements in BVI
- Pay for the necessary fees
With these steps in mind, those looking to maximize profitability while leveraging tax efficiencies will find that there may be no better option than the BVI’s sunny shores. Contact us to learn more.
