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British Virgin Islands has long laid out a welcome mat for international investment, offering a stable and competitive business environment which is unrivalled elsewhere in the world. But navigating the unique culture and tax, legal and regulatory challenges can be difficult without having local knowledge on board.
The BVI has a sophisticated and innovative legislative framework. Since the adoption of the Business Companies Act in 2004, more than half a million companies have been incorporated in the territory, looking to take advantage of the country’s stable economic environment and strategic location, without causing too much disruption to everyday running processes. Companies incorporated in the BVI can also list on stock markets across the world, and with no exchange controls and the use of the US dollar as local currency, it has become one of the most popular jurisdictions in the world to incorporate private and holding companies.
Recognised as one of the leading financial centres in the world, the BVI has been propelled into a vibrantly modern economy thanks to a sound tertiary sector. The jurisdiction appears on the OECD’s "white list" reflecting a high level of tax transparency, regulatory and compliance standards, and offers a stable and certain framework for investors, which is hugely appealing in times of economic uncertainty.
But many companies struggle to acclimatise with the BVI because of its unique corporate requirements and business culture. As well as mitigating risk, it is therefore very important to have local knowledge on board to streamline processes and ensure a healthy corporate life.
Property law has been rather piecemeal in its evolution, which makes navigating procedures quite difficult. The principle legislation dealing with property rights is the Conveyancing and Law of Property Act, which is largely based on English legislation. However, there are updates found in the BVI Business Companies Act, 2004, which states that in relation to a security interest over shares in a British Virgin Islands company, the parties may completely exclude the effect of the Conveyancing and Law of Property Act.
The Labour Code, passed by the BVI government in 2010, lays the groundwork for inevitable laws and regulations governing companies to come. Obtaining a work permit takes seven to 10 weeks and is carried out by the Labour Department. Firms looking to recruit domestic or overseas staff should keep an eye on any potential changes to regulations in the future.
Obtaining a trade licence requires back-up checks and a business plan or proposal which shows your financial and technical capabilities of operating a successful business. Licences usually take around four to six weeks for approval, and newly-formed corporates are required to register with the Social Security Office and the Inland Revenue Department before starting operations.
A business plan and information relating to your company’s performance are key to getting credit in the BVI. You may not need an audited statement as a simple bank account statement often suffices, but a complete file to prove you have satisfied your compliance and regulatory obligations will be required.
The business climate is very relaxed in the BVI, so be sure not to rush proceedings. Most commercial activities are related to tourism and financial services, which means there is a lot of coming and going on the island. Keep in mind that the British Virgin Islanders place great importance on mannerly behavior, and politeness will go a long way during business negotiations.
We have the local knowledge to help you navigate these minefields. Whether you want to set up in the BVI or just want to streamline your operations, talk to us.