British Virgin Islands (BVI) Company Formation / Registration / Incorporation

GENERAL INFORMATION:

The Virgin Islands, often called the British Virgin Islands (BVI), is a British overseas territory and overseas territory of the European Union, located in the Caribbean to the east of Puerto Rico. The islands make up part of the Virgin Islands archipelago, the remaining islands constituting the U.S. Virgin Islands.

The official name of the country is still simply the “Virgin Islands“, but the prefix “British” is often used to distinguish it from the neighbouring American territory which changed its name from the “Danish West Indies” to “Virgin Islands of the United States” in 1917. British Virgin Islands government publications had traditionally continued to commence with “The Territory of the Virgin Islands“, and passports simply refer to the “Virgin Islands“, but recently, more legislation now refers to the country as the “British Virgin Islands“.

The British Virgin Islands consist of the main islands of Tortola, Virgin Gorda, Anegada and Jost Van Dyke, along with over fifty other smaller islands and cays. Approximately 15 of the islands are inhabited. The capital, Road Town, is situated on Tortola, the largest island, which is approximately 20 km (12 mi) long and 5 km (3 mi) wide. The islands have a population of about 22,000, of whom approximately 18,000 live on Tortola.

Since the 1960s, the islands have diversified away from their traditionally agriculture-based economy towards tourism and financial services, becoming one of the wealthiest areas in the Caribbean.

As an offshore financial centre, the British Virgin Islands enjoys one of the more prosperous economies of the Caribbean region, with a per capita average income of around $38,500 (2004 est.)

The “twin pillars” of the economy are tourism and financial services. Politically, tourism is the more important of the two, as it employs a greater number of people within the Territory, and a larger proportion of the businesses in the tourist industry are locally owned, as are a number of the highly tourism-dependent sole traders (for example, taxi drivers and street vendors). Economically however, financial services associated with the territory’s status as an offshore financial centre are by far the more important. 51.8% of the Government’s revenue comes directly from licence fees for offshore companies, and considerable further sums are raised directly or indirectly from payroll taxes relating to salaries paid within the trust industry sector (which tend to be higher on average than those paid in the tourism sector).

Substantial revenues are also generated by the registration of offshore companies. As of June 2008, 823,502 companies were so registered (of which 445,865 were ‘active’). In 2000 KPMG reported in its survey of offshore jurisdictions for the United Kingdom government that over 41% of the world’s offshore companies were formed in the British Virgin Islands. Since 2001, financial services in the British Virgin Islands have been regulated by the independent Financial Services Commission. While at one time the BVI was well regarded as a good domicile for captive insurance services, this changed beginning in recent years with the change of insurance regulators in 2007 and the government’s increasing pressure to hire only locals (“belongers”) in the insurance industry. Official reports from the Financial Services Commission reflect as of June 30, 2010 only 207 captives in the BVI. Informed sources report that the actual number is closer to 100, with the 50% decline over the last four years attributable to the lack of ability within the FSC in administering insurance companies. Beginning in 2008 there was a mass exodus of captives for better staffed jurisdictions like Anguilla.