Doing Business Internationally: British Virgin Islands

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Christy: Hello, everyone, and welcome to today's webinar, "Doing Business Internationally: British Virgin Islands." My name is Christy DeMaio Ziegler, and I will be your moderator. Please join me in welcoming our host Helena Ledic, an associate general counsel for CSC in the Chicago office. Helena.

Helena: Thank you so much, Christy. I'm delighted to introduce our speakers today for our "Doing Business Internationally: British Virgin Islands" webinar. And the first person I'd like to introduce today is Sabinah Clement, the Managing Director of CSC in the British Virgin Islands.

Sabinah: Thank you, Helena. And many thanks to you, the audience for joining this webinar. We are very excited to be able to share our knowledge of the British Virgin Islands' financial services offerings with you today.

Helena: And then our second speaker today joining us is Shanica Maduro-Christopher, and she is the Vice President of CSC in the British Virgin Islands.

Shanica: Thank you, Helena. It's a pleasure to be here to discuss doing business in the British Virgin Islands.

Helena: So let's first talk about our agenda for the British Virgin Islands today. We'll learn a little bit about CSC, and then we'll go into our profile of the British Virgin Islands and why you would want to do business there. We'll talk about those options for setting up businesses, fast facts, the really critical things that you need to know about doing business in the BVI, and how CSC can help you.

So a little bit about CSC. For more than 120 years CSC has been the partner of choice for companies around the globe. We're trusted to handle everything from incorporating a company through maintaining compliance to corporate transaction work, protecting digital assets from the threats of the online world, and everything in between. We offer the solutions and technology that keep businesses running in the background, allowing clients to focus on the important work of growing their own businesses.

CSC has offices and capabilities in more than 140 jurisdictions across Europe, the Americas, Asia- Pacific, and the Middle East. We're a global company capable of doing business wherever our clients are, and we accomplish that by employing local experts, such as Sabinah and Shanica, in every business we serve.

So the British Virgin Islands is a British territory, and it has a parliamentary government. There are four main islands to the British Virgin Islands, with about 50 lesser islands. It's located about 60 miles from Puerto Rico, the closest island, but the capital city is about 130 miles away from Puerto Rico, and that's Tortola. And interestingly enough, BVI uses the U.S. dollar for its currency.

But Sabinah why don't you tell us a little bit more about how the BVI earned its place at the forefront of the global financial services sector?

Sabinah: Certainly. So when we look at the BVI, over the years it has had a total number of company formations in the numbers well over 500,000 companies, and 375,000 of those companies actually remain active today. So with those statistics, the BVI is easily one of the world's largest financial services centers for international business company formation. And this is primarily because of the flexibility and the simplicity in the corporate legal framework that applies in BVI, while also being very robust as it relates to global standards.

BVI business companies are formed under one piece of legislation for the vast majority of legal entities, which is the BVI Business Companies Act, and this act is extremely transparent and easy to apply. But the BVI's reputation was also built on the proposition of confidentiality in that the director and the shareholder details are not readily publicly available. Now there is, however, a regime under which such information can be accessed for a proper purpose and of course subject to requests from competent authorities.

Another of the contributors to the popularity of BVI structures is that BVI entities enjoy having no inheritance taxes, no corporate taxes, withholding or capital gains taxes as the jurisdiction is zero tax rated.

And the last big advantage for us is that the BVI offers one of the most cost-efficient company formation regimes. The jurisdiction has always priced its products and its services reasonably, which means that it's not prohibited for a variety of users. It therefore makes the BVI as a jurisdiction a very attractive proposition not just for large corporations, who may need to manage their subsidiaries, but also for individuals seeking asset holding entities or succession planning structures. So that makes the BVI the right fit for every business needs.

Helena: So in an effort to learn a little bit more about why BVI, Sabinah, can you give us a little bit of a background on the legal and political advantages of using the BVI for entity formation?

Sabinah: Sure. So firstly, for decades the BVI has experienced a very stable political environment. It enjoys the reputation of being a tax-neutral jurisdiction as well as one that is economically secure. The BVI's legal system follows the common law and equity, and as the British overseas dependent territory, it has the autonomy to self-govern on internal matters. And indeed its legislative power lies within the government and the House of Assembly. So this gives us a huge degree of agility in enacting new legislation, and what it means is that the BVI is exceptionally quick to react to the changing needs of the industry, of the market as it relates to the underlying legislation which governs company formation, also in terms of introducing new and innovative entity types to meet the needs of the market as well as its response to shifts in global regulatory standards, anti-money laundering and terrorists financing topographies and initiatives.

So we're very quick to be able to enact legislation or to amend legislation because of this autonomy to self-govern and to legislate. But in addition, the BVI legislation offers a huge diversity of companies as well as flexibility in issuing shares in any or in multiple currencies by permitting the companies to register their names either in foreign languages or even with Chinese characters.

So all of those features actually make the BVI one of the most versatile financial centers globally.

Helena: Very good. Thank you. Now I have a question for Shanica. So when we were preparing for today, we spoke about regulation and legislation and how BVI is a leader. And as you said, where BVI goes, the rest of the world follows. So talk to us about the advantages of setting up in a jurisdiction that is at the forefront of such regulation.

Shanica: Certainly, Helena. The British Virgin Islands has managed to be at the forefront of regulation by remaining compliant with global standards, being proactive, and actively updating legislation. We know the global regulatory landscape is constantly changing, and the BVI has been able to keep on top of these developments and adapt very quickly to new requirements all the while ensuring that we maintain our competitive advantage by giving clients the benefits they expect and have grown accustomed to.

We boost a top-tier legal system, which includes a tried-and-tested insolvency regime, as well as a commercial court dedicated to supporting the financial services industry.

Helena: So, Shanica, tell us a little bit more about why the BVI is such a unique place to do business in.

Shanica: I'm happy to, Helena. We are able to turn around formations and filings rather quickly, which is a result of the online filing systems. An example that speaks to this is a standard turnaround time for the filing of a company incorporation, which is 24 hours, and it's usually less than that.

Sabinah mentioned previously our stable political environment. Being an overseas territory of the United Kingdom, our legal system is based on English common law.

Additionally, the workforce in the BVI is highly skilled and qualified. You will find global corporate services providers as well as boutique firms offering company formation and administrative services, qualified fiduciaries, private wealth practitioners, and lawyers from all over the Commonwealth. Audit firms are also part of the workforce and includes the Big Four, which all have a presence in the BVI.

Helena: So let's now talk a little bit about the structuring options to set up a business in the BVI. So Sabinah, can you get us started, please?

Sabinah: Certainly. So we've established that the BVI business companies are the most common legal structure in use in the BVI. It is the product on which our reputation was built. It is what has gained us popularity as an offshore financial services jurisdiction, and that is because of its flexibility and use for a variety of reasons. We can have BVI companies set up with wide objects clauses. There's typically no requirement to file regular audits or meet financial disclosures. Of course, that is subject to some exceptions in terms of whether or not the entities are regulated by one of the arms of our Financial Services Commission.

There's also no requirement to identify directors or shareholders publicly. And we typically see that the service provider's address in BVI will be used as the company's registered office in the BVI so that service of process can be exercised. And also that companies are not subject to the territory's tax regime. There are no taxes owed on profits made by those entities in BVI, although there is a payroll tax that would become applicable if local staff are employed in BVI.

So this is the backbone, and this is the fundamental legal instrument by which most BVI structures are set up. However, there are certainly other options because as a jurisdiction we're not a one-trick pony. And so Shanica will explain some of the other structuring options that are available locally.

Shanica: In addition to the BVI business company, there are other structuring options available, such as special purpose vehicles and segregated portfolio companies. There are also private trust companies, which are BVI companies used to conduct trust business, which is acting as trustee, protector, or administrator of a trust or trusts. We also have limited term companies, limited partnerships, and all types of trusts, including the VISTA trusts, which are unique to the BVI. These types of trusts are created and subject to the Virgin Islands Special Trust Act and are trusts for holding shares in BVI companies where it is intended for those shares to be held indefinitely and the trustee is not intended, except in special defined circumstances, of course, to intervene in the conduct of the affairs of the underlying company.

Another option available is the incubator fund, which is a startup fund for those managers who want to keep costs in line until they have a track record to attract sufficient subscriptions to make the fund viable for the long term.

Helena: So Shanica, why don't you speak to us a little bit more about other important facts that are that our audience might benefit from knowing about the BVI?

Shanica: Certainly, Helena. The first fact that I would like to mention is that businesses are required to engage a corporate service provider to incorporate BVI companies. Every BVI company must have a registered agent. This service must be provided by a corporate service provider in the BVI and a registered office located in the BVI. These corporate service providers act as the gatekeepers and conduct due diligence and KYC checks.

Another fact is that the BVI government started becoming friendly to offshore registration in the 1980s. By 2000, the BVI had grown as a premier financial services jurisdiction, with around half of all offshore companies in the world being formed in the BVI.

Another fact is that shareholders do not need to subscribe their name to the memorandum and articles of association. But due diligence and KYC checks are required and thorough.

Sabinah: Yes, that is certainly true. The due diligence requirements for BVI are extremely robust and thorough. But it's also important to note that there are actually no exchange controls in place in BVI because, and this is an interesting twist, despite the BVI being a British dependent territory, the BVI uses the U.S. dollar as its official currency. There's a fun fact for you.

Another key fact is that, as we've mentioned before, the BVI companies offer flexibility in terms of structuring. They offer wide objects clauses, which means that a company can be set up without a restriction on its business purpose, but it can also have a restrictive purpose. The shares can be issued in any currency, and there are many variations, as we've gone through, to setting up a BVI company.

So what we would encourage is that a local expert should always be consulted to determine the best fit for your needs. And just by chance, we have those experts readily available. At CSC, many of our experts have been in the industry for more than 25 years. So clients can expect robust knowledge and significant experience.

Helena: Well, now that we've heard the benefits of setting up entities in the BVI and some of the processes and procedures, let's hear how CSC can help you in the BVI. So Shanica, can you tell us a little bit more about CSC with the BVI? What kind of services do we offer? What are some of the different solutions that we can help our clients with?

Shanica: Certainly, Helena. So at CSC BVI we offer corporate and legal solutions, which includes incorporation of BVI business companies and formation of BVI limited partnerships. We can assist with the preparation of financial statements. We provide liquidator and liquidation services and professional director services. We can also assist with document certifications and legalizations.

We also offer a registered office and registered agent services, which entails the maintenance of books, records, and statutory registers. We also manage the annual government license fee payment process and can accept service of process on behalf of BVI entities.

Additionally, we can help with trust services. We act as trustee on all types of BVI trusts, including charitable trusts and VISTA trusts. We can assist with the formation of private trust companies and provide registered office, registered agent services to private trust companies as well. And Sabinah will tell us some more about the services we offer.

Sabinah: Happy to. So in addition to all that Shanica has just mentioned, because we are a full-fledged corporate services provider in BVI, we can also offer fund solutions through registration of BVI funds and ensuring that the funds remain compliant with the various requirements. We also act as authorized representative on BVI funds, which is a liaison between the fund itself and the Financial Services Commission who regulates BVI funds. We also offer regulatory services through ensuring compliance and reporting with, for example, FATCA and CRS.

And you may be wondering to whom do we offer these services. You know, who do we help? Who can we help? We provide services to a wide range of clients from around the world. We service family offices, financial institutions, fund managers from across all of the various asset classes. We assist multinational corporations as well as high net worth and ultra high net worth individuals.

Helena: Let's now talk about CSC's global coverage. We're in over 140 different jurisdictions. We have capabilities in them. CSC has a distinct advantage when it comes to serving our clients where they are. We have regional hubs around the globe with in-country experts, such as Sabinah and Shanica, who understand the ins and outs of their various jurisdictions as they have so capably shown us today. You will work with a dedicated service team in your time zone fulfilling all your service needs. In all, our team is wherever you need us to be.

At CSC, we are the business behind business. As you can see from our solutions that are listed here, we're the partner of choice for global companies needing expertise in business administration and compliance, fund solutions, transactions and lending, capital markets, and domain security and brand protection. Whatever your company needs to stay in compliance, transact business, and become secure against threats of the online world, CSC can help you.