bvi bcs booklet – english

A G L O B A L A P P R O A C H T O L E G A L S O L U T I O N S

Br i t ish Vi rgin Is lands Business Companies

We are pleased to present this booklet to our clients, which is a comprehensive but brief

explanation of the main aspects of the current British Virgin Islands Business Companies

legislation.

As already advised to you, the BVI Business Companies Act comprises provisions applicable to

Business Companies, former International Business Companies (IBCs) and former Companies

Act companies. The Business Companies Act was enacted in 2004 and amended in 2005, 2006

and 2012, as the BVI Government felt there was need to improve and clarify certain provisions of

this Act.

We trust our colleagues and other professional advisors will find it useful for meeting their

client’s needs.

TABLE OF CONTENTS

I. APPLICABLE LAW AND REGULATIONS ..............................................................................................

2

II. ATTRACTIVE FEATURES ....................................................................................................................... 2

I.

III. FORMATION PROCEDURES.................................................................................................................. 2

A. The M&AA ..........................................................................................................................................

3

B. Name Of The Company ........................................................................................................................

3

B.1. Company Number As The Company’s Name ...............................................................................

3

B.2. Foreign Character Name ................................................................................................................

3

B.3. Restrictions on Company Names ..................................................................................................

3

B.4. Re-Use of a Company Names ........................................................................................................

4

B.5. Company Name Endings ............................................................................................................... 5

IV. TAXATION/TAX TREATMENT .............................................................................................................

5

V. BOOKS, RECORDS AND THE COMMON SEAL ..................................................................................

6

VI. DIRECTORS /MEMBERS/SHARES ....................................................................................................... 7

A. Directors ................................................................................................................................................

7

A.1. Register of Directors ....................................................................................................................

8

B. Members ................................................................................................................................................

8

B.1. Register of Members ....................................................................................................................

8

C. Shares s ..................................................................................................................................................

9

C.1. General Information .....................................................................................................................

9

C.2. Bearer Shares ................................................................................................................................

9

D. Liability of Members/Directors/Agents/Voluntary Liquidators s.........................................................

10

VII. CONTINUATION AND DISCONTINUATION ....................................................................................... 10

VIII. COSTS ..................................................................................................................................................

12

A. Formation Costs ....................................................................................................................................

12

B. Annual Costs .........................................................................................................................................

12

IX. SHELF COMPANIES.................................................................................................................................. 13

X. CERTIFICATE OF GOOD STANDING ..................................................................................................... 13

2 | B r i t i s h V i r g i n I s l a n d s B u s i n e s s C o m p a n i e s

I. APPLICABLE LAW AND REGULATIONS.

The BVI Business Companies Act, as amended in 2012 and the BVI Business Companies Regulations

2012, replaces all existing regimes and governs all companies incorporated in BVI.

II. ATTRACTIVE FEATURES

No requirement to file annual returns or financial statements

No requirement to hold annual general meetings of shareholders or directors

Nominative or Bearer shares (subject to Custodian services) are available at owner’s option

Companies need not have more than one director

The shareholders, directors and officers may be of any nationality and may be residents of any

country.

Neither the directors nor the officers need to be shareholders

Directors and/or officers can be either corporate entities or natural persons

No requirements to register initial or ongoing changes in directors and/or officers at the Registrar.

Shareholders and/or directors may hold their meetings in any country and they may attend such

meetings by proxy.

Familiarity of incorporation documents (Memorandum & Articles of Association, Certificate of

Incorporation).

No taxes levied on international and banking transactions.

No exchange control regulations.

May be used for:

- Holder of bank accounts, fixed deposits, investment plans and any other financial or

commercial titles.

- Owner of shares of other companies or legal entities.

- Owner of apartments, houses, buildings and any other movable or immovable property or

goods.

- Manager and promoter of international business transactions.

- International leasing of vehicles, machinery and others.

- To lend or borrow money, give or receive money for commissions or others.

- Marketing and promotion of products and services.

- Other commercial and financial activities.

III. FORMATION PROCEDURES

A BVI BC may be incorporated as

a company limited by shares;

a company limited by guarantee that is not authorized to issue shares;


a company limited by guarantee that is authorized to issue shares;

an unlimited company that is not authorized to issue shares;

an unlimited company that is authorized to issue shares;

a Segregated Portfolio Company or

a Restricted Portfolio Company.

There is a complete Division of the BVI BC Act (from sections 134 to 158), which covers all

matters relating to Segregated Portfolio Companies (SPC). Every SPC must prove that it has the

expertise required for properly managing segregated portfolios and must be approved by the

Commission. Existing insurance and/or mutual fund companies are eligible to become SPC’s.

A Registered Portfolio Company (RPC) needs to state its objects in its M&AA.

A statement of what type of BVI BC is being formed must be included in the M&AA. Our

standard proforma M&AA is for a BVI BC limited by shares. We suggest that our standard

M&AA be used unless there is a particular reason for requesting that an additional or special

clause be inserted or a particular clause deleted, or that any other amendment be made

The M&AA of a BVI BC may only be filed by its registered agent, who acts as the incorporator.

The Articles of Association governs a BVI BCs internal affair.

The M&AA may be amended by resolutions passed by the members or the directors.

A. The M&AA

For the incorporation of a BVI BC, we require the name of the company and the maximum

number of shares that the company is authorized to issue.

In accordance with the BVI BC Act, there is no need to include a long list of objects in the

M&AA

B. Name of the Company

B.1. Company number as company name.

The name of a BVI BC may comprise the expression “BVI Company Number” followed by

its company number in figures and the ending required, as specified above, that is

appropriate for the BVI BC.

B.2. Foreign character name. A BVI BC may have an additional foreign character name approved

by the Registrar.

B.3. Restrictions on company names.


No BVI BC shall be registered, whether on incorporation, continuation, merger or

consolidation under a name:

whose use would contravene another enactment or the Regulations;that is

identical to the name or foreign character names under which a BVI BC is or has

been registered under the BVI BC Act or a former Act, or is so similar to the

name under which a BVI BC is or has been registered under the BVI BC Act or a

former Act, or whose use would, in the opinion of the Registrar, be likely to

confuse or mislead;

o that is identical to a name that has been reserved or that is so similar to a

name that has been reserved (i.e. such that the use of both names by

different BVI BCs would, in the opinion of the Registrar, be likely to

confuse or mislead);

o that contains a restricted word or phrase (list may be published in the

Gazette) unless the FCS has given prior written consent to the use of the

word or phrase; or

o that, in the opinion of the Registrar, is offensive or, for any other reason,

objectionable.

B.4. Re-use of Company Names:

A BVI BC that is newly incorporated or that has continued from another jurisdiction may use

names from companies that have changed their names; companies that have been dissolved

and discontinued companies under the following parameters:

- Use of a changed name:

A company will be able to use a name previously used by another company that changed its

name, after the expiry of a seven (7) year period, starting from the date of the original name

change; after three (3) years if the original company provides written consent; if the company

that will use the name is part of a genuine sale or if they are affiliated companies, the

Registrar must be satisfied of certain factors prior to approving the use of the name for the

company.

- Use of a dissolved company’s name:

The Registrar will allow a company to be registered with the name of a dissolved company at

any time after said company’s dissolution.

- Use of discontinued company’s name:

The Registrar will allow a company to be registered under the name of another company (or

under a similar name) at any time after the expiry of a seven (7) year period starting from the

date of a certificate of discontinuance.


B.5 Company Name Endings

As general rule, the name of a limited company shall end with the word “Limited”,

“Corporation” or “Incorporated”; the words “Société Anonyme” or “Sociedad

Anónima”; the abbreviation “Ltd”, “Corp”, “Inc” or “S.A.”; or such other word or

words, or abbreviations thereof, as may be specified in any Regulations adopted by the

BVI Government.

Subject to written authorization granted by the Commission, certain companies are

allowed to omit the word “Limited” or an equivalent required ending from their names

(This basically applies to charitable companies that operate principally in BVI).

The name of an unlimited company shall end with the word “Unlimited” or the

abbreviation “Unltd”.

The name of a restricted purposes company shall end with the phrase “(SPV) Limited”

or the phrase “(SPV) Ltd”.

The name of an SPC shall include the designation “Segregated Portfolio Company

Limited” or “SPC” placed immediately before one of the endings specified for the

name of a limited company above, or a permitted abbreviation thereof. The name of an

SPC that is a restricted purposes company shall include the designation “(SPV)”

immediately before or immediately after the designation specified above.

Where the abbreviation “Ltd”, “Corp” or “Inc” is used, a full stop may be inserted at

the end of the abbreviation

A BVI BC may use, and be legally designated by, either the full or the abbreviated form

of any word or words required as part of its name under this section.

IV. TAXATION/TAX TREATMENT

All dividends, interest, rents, royalties, compensations and other amounts paid by a BVI BC, as well

as all capital gains realized with respect to any shares, debt obligations or other securities of a BVI

BC, are exempt from all provisions of the Income Tax Ordinance.

No estate, inheritance, succession or gift tax is payable with respect to any shares, debt obligations

or other securities of a BVI BC.

All instruments relating to transfers of any type of property of assets to or by a BVI BC; all

instruments relating to transactions in respect of the shares, debt obligations or other securities of a

BVI BC; and all instruments relating to other transactions in connection with the business of a BVI

BC are exempt from the payment of stamp duty. This exemption does not apply to any instrument

relating to the transfer to or by a BVI BC of an interest in land situate in the BVI; or transactions in


respect of the shares, debt obligations or other securities of a land owning company (i.e. if its

subsidiaries have an interest in any land in the BVI.).

V. BOOKS, RECORDS AND THE COMMON SEAL

A. Records to keep:

The company’s accounting books, records and minutes may be kept in any place or country chosen

by the director.

M&AA and its amendments.

Copies or originals of Register of Members, and Register of Directors and Officers (If the original

Registers of Directors and Register of Shareholders along with any minutes of meetings,

resolutions issued throughout the company’s existence, are kept at a different location than the

Registered Office the company shall provide the registered agent with a written record of the

physical address of the place or places at which these records are kept).

Letter of Consent to act as Director(s)

Corporate Seal (stamped).

Register of Mortgages and Charges (if any).

Copies of all notices and other documents filed by the BVI BC in the preceding ten years..

The records required to be kept by a BVI BC under the BVI BC Act shall be kept in written form, either

wholly or partly as electronic records.

Where a BVI BC keeps a copy of the Register of Members and/or the Register of Directors at the office of

its registered agent, it shall within 15 days of any change in the register notify the registered agent, in

writing, of the change and provide the registered agent with a written record of the physical address of the

place or places at which the original Register of Members or the original Register of Directors is kept.

Where the place at which the original of the Register of Members, the original of the Register of Directors

and/or any records specified above is changed, the BVI BC shall provide the registered agent with the

physical address of the new location of the records within 14 days of the change of location

B. The Common Seal

Pursuant to an amendment made to the BVI BC Act, a corporate seal has become mandatory and an

imprint of same needs to be kept at the office of the BVI BC’s registered agent.


VI. DIRECTORS/MEMBERS/SHARES:

A. Directors

There must be at least one director who shall, within six months of the date of incorporation

of the BVI BC, be appointed initially by the first registered agent of the BVI BC.

A director can be an individual or any other body corporate.

Directors need not be residents of BVI.

A BVI BC is not required to file the names of the directors at any public registry, although it

may choose to do so.

The sole member/director of a BVI BC may, by instrument in writing, nominate a person as

a reserve director of the BVI BC to act in the place of the sole director in the event of his

death.

A director (or reserve director) cannot be appointed unless he/she/it has consented in

writing.

A director of a BVI BC may by a written instrument appoint an alternate director, whom

may exercise the appointing director’s powers and carry out his/her responsibilities

regarding decision making in the absence of the appointing director. An alternate director

does not have the power to appoint an alternate and does not act as an agent director; the

alternate director is liable for his/her own acts or omissions. It is not required to enter an

alternate director in the register of directors

The business and affairs of a BVI BC shall be managed by or under the direction or

supervision of the directors (or a committee of directors) of the BVI BC, who have all the

powers required for such management.

A resolution of directors may be passed at a meeting of directors or subject to the M&AA,

as a written resolution.

Subject to the M&AA, at a meeting of directors a majority of the votes cast by the directors

present and entitled to vote are required to pass the resolution.

Consent to a written resolution may be provided in writing or by telex, telegram, cable or

other written electronic communication, without the need for any notice, by the majority of

of votes of the directors, as may be specified in the M&AA.

We are frequently requested to provide directors. For such purpose, we have companies

available to serve as directors subject to acceptable references being given to us by the

relevant parties. Furthermore, if we consider it necessary, we may ask our client to execute

a Letter of Indemnity. The least we would accept from our clients in such a case would be

confirmation to the effect that the interested party is a creditworthy person.

Director’s fees are quoted upon request.


A.1. Register of Directors

A BVI BC shall keep a Register of Directors, or a copy of the Register of Directors, at the

office of its registered agent.

The Register of Directors must contain:

o the names and addresses of the persons who are directors of the company or who have

been nominated as reserve directors of the company;

o the date on which each person whose name is entered in the register was appointed as a

director, or nominated as a reserve director, of the company;

o the date on which each person named as a director ceased to be a director of the

company;

o the date on which the nomination of any person nominated as a reserve director ceased to

have effect; and

o such other information as may be prescribed.

This register may be in such form as the directors approve, but if it is in magnetic, electronic

or other data storage form, the BVI BC must be able to produce legible evidence of its

contents.

B. Members

o The members of a limited liability company are only liable for the amount not paid for

their shares.

o Members may be represented by a natural or a juridical person. Members may also be

represented by a proxy.

o The M&AA of a BVI BC may include other aspects regarding proceedings at meetings

such as voting and members acting through proxies at meetings, and others..

BVI BC Limited by Guarantee:

o If a BVI BC is limited by a guarantee, the M&AA shall state the amount that each

guarantee member of the BVI BC is liable for as his contribution to the assets of the BVI

BC on liquidation.

B.1. Register of Members

A BVI BC shall keep the Register of Members, or a copy of the Register of Members, at

the office of its registered agent.


This register must contain, as appropriate:

o the names and addresses of the persons who hold registered shares in the BVI BC;

o the number of each class and series of registered shares held by each shareholder;

o the date on which the name of each member was entered in the register of members;

and

o the date on which any person ceased to be a member.

This register may be in such form as the directors may approve, but if it is in magnetic,

electronic or other data storage form, the BVI BC must be able to produce legible evidence

of its contents.

C. SHARES

C.1 General Information

A BVI BC may have different classes of shares. The M&AA of a BVI BC must state the

rights, privileges, restrictions and conditions attaching to each class; and or the maximum

number of shares the BVI BC may issue.

A BVI BC may issue bonus shares, partly paid shares and nil paid shares.

Shares may be issued with or without par value.

The BVI BC may issue fractional shares, and a fractional share shall have the

corresponding fractional rights, obligations and liabilities of a whole share of the same

class or series of shares.

Our standard M&AA states that the Company is authorised to issue a maximum of 50,000

no par value shares of a single class. It also states that the BVI BC shall issue only

registered shares and that the company is not authorised to issue bearer shares, convert

registered shares into bearer shares or exchange registered shares for bearer shares.

C.2 Bearer Shares

A statement needs to be included in the M&AA as to whether the BVI BC is

authorised to issue bearer shares, convert registered shares into bearer shares, or

exchange registered shares for bearer shares.

A BVI BC shall be subject to the appointment of a custodian for its bearer shares.

It is mandatory that the BVI BC provide the name of the beneficial owner to the

custodian.


The custodian may be an authorised custodian or recognised custodian, but in either

case, duly licensed by the FSC. A bearer share in a BVI BC is disabled for any

period during which it is held by any person other than a custodian.

Upon request, we shall be pleased to provide our clients with custodian services.

D. Liability of Members/Directors/Agent or Voluntarily Liquidator

There shall be no liability against the members of a BVI BC unless they owe the BVI BC any

amount for the shares that they hold. No director, agent or voluntary liquidator shall be liable for

any debts, obligations or defaults of the BVI BC, except in so far as he may be liable for his own

conduct or acts.

If at any time there is no member of a BVI BC, any person doing business in the name of or on

behalf of the BVI BC shall be personally liable for the payment of all the BVI BCs debts

contracted during the time and such person may be sued therefore without jointer in the

proceedings of any other person. We therefore strongly recommend the issuance of shares upon

incorporation of a BVI BC.

VII. CONTINUATION AND DISCONTINUATION

A foreign company may continue as a BVI BC subject to BVI limitations, if the laws of the jurisdiction in

which it is registered allow it to continue in another jurisdiction, including the British Virgin Islands.

A. Required documents/information:

Name of the Company at the date of application and the proposed name for its continuation.

The date and jurisdiction, under which the foreign company was incorporated, registered or

formed.

Certified copy of its Certificate of Incorporation or any other document evidencing the foreign

company’s incorporation, registration or formation.

M&AA complying with the BVI BC Act in regard to information and formalities as if it were a

new company (Mossack Fonseca & Co. (BVI) Limited will prepare this document).

Resolution of Directors (or of any other person or persons charged with exercising the powers of

the company) approving the continuation, or approval of the continuation in any other manner

set forth in the company’s constitutional documents.

Evidence satisfactory to the Registrar stating that the company is not disqualified from

continuing in the BVI. A foreign company may not continue as a company incorporated under

the BVI BC Act if it is in liquidation or insolvency proceedings; if a receiver or manager has

been appointed in relation to any of its assets; if it has entered into an arrangement with its


creditors that it has not concluded; or if an application for its liquidation is being processed by

a Court outside the foreign company’s jurisdiction (An opinion letter, containing these

statements, issued by a qualified lawyer of the jurisdiction where the foreign company was

registered is acceptable).

The above information or documentation is required in the English language, or if written in a

language other than English, accompanied by a certified English translation, duly signed by a

Certified Translator.

B. Effects of Continuation:

The main effects of continuation of a foreign company under the BVI BC Act are:

The BVI BC Act applies to the foreign company as if it had been incorporated under the BVI

BC Act.

The foreign company is capable of exercising all the powers of a company incorporated under

the BVI BC Act.

The foreign company is no longer to be treated as a company incorporated under the laws of a

jurisdiction outside the BVI.

The M&AA filed on the Register of Companies Affairs become the M&AA of the foreign

company.

The continuation of a foreign company under the BVI BC Act does not affect the continuity of

the foreign company as a legal entity nor the assets, rights, obligations or liabilities of the

foreign company.

All shares of the foreign company that were outstanding prior to the issue by the Registrar of a

certificate of continuation shall be deemed to have been issued in conformity with the BVI BC

Act.

Subject to any limitations in the M&AA, a BVI BC in good standing with the Registrar may by a

resolution of Directors or Members continue as a company incorporated under the laws of a

jurisdiction outside the BVI in the manner provided under those laws. The registered agent may,

within 30 days of the BVI BCs continuation under the laws of the foreign jurisdiction, submit an

affidavit to the Registrar to the effect that the company has continued its incorporation under the

laws of a foreign jurisdiction. Upon registration of such affidavit, the Registrar shall be required to:

strike the name of the BVI BC off the register;

issue a certificate of discontinuance; and

publish notice of the strike-off in the Gazette.


The BVI BC will continue to be liable for all claims, judgments, and proceedings against it and

service of process may continue to be effected on its registered agent in the BVI up until the time it

is struck off the register.

VIII. COSTS

A. Formation Costs

Costs for the formation of a BVI BC are quoted upon request.

B. Annual Costs

The annual license fee payable by a BVI BC is as follows:

BVI BC authorised to issue Registered Shares only:

o US$350 if the BVI BC is authorised to issue no more than 50,000 shares.

o US$1,100.00 if the BVI BC is authorised to issue more than 50,000 shares.

o US$5,000.00 for a restricted purposes company.

BVI BC authorised to issue Bearer Shares:

o US$1,100.00 - BVI BC is authorised to issue no more than 50,000 shares

o US$1,350.00 - BVI BC is authorised to issue more than 50,000 shares

Payment Dates:

o Companies incorporated from January to June (Group I):

On or before 30th April of any given year

10% surcharge if not paid by 30th April

50% surcharge if not paid by 30th June

Strike-off as of 16th October

o Companies incorporated from July to December (Group II):

On or before 31st October

10% surcharge if not paid by 31st October


50% surcharge if not paid by 31st December

Strike-off as of 15th April of the next year

Restoration Fee and Dates:

o US$375.00 if application for restoration is made within 6 months immediately following the

BVI BC being struck off the Register (15th April – Group I).

o US$775.00 if application for restoration is made after 6 months immediately following the

BVI BC being struck off the Register (16th October – Group II)

IX. SHELF COMPANIES:

We have a number of already existing BVI BCs limited by shares for sale. These companies are “clean”,

that is to say, they have never traded or entered into any transaction whatsoever.

X. CERTIFICATE OF GOODSTANDING

The Registrar shall, upon request by any person, issue a certificate of good standing under his hand and

seal certifying that a BVI BC is in good standing, if the Registrar is satisfied that the BVI BC is on the

Register and has paid all fees, licence fess and penalties due and payable.

The certificate of good standing must contain a statement as to whether:

the BVI BC has submitted to the Registrar articles of merger or consolidation that have not yet

become effective;

the BVI BC has submitted to the Registrar Articles of arrangement that have not yet become

effective;

the BVI BC is in voluntarily liquidation;

the BVI BC is in liquidation or receivership under the provisions of the Insolvency Act 2003

the BVI BC is under an administrative receivership; or

any proceedings to strike the name of the BVI BC off the Register have been instituted.

LA/ SEPT. 2012

www.mossfon.com

HEAD OFFICE - ISO 9001 CERTIFIED

bvi bcs booklet – english

Documents

bvi business companies

business companieswe

company names

company number

c h t o

p p r o

u t i o n sbr

provisions applicable