Ultimate Guide to Setting Up a Business in the British Virgin Islands (BVI)

Overview

The British Virgin Islands (BVI) registers BVI Business Companies (BCs) as offshore entities, recognizing them for their business-friendly environment, advantageous tax structure, and robust legal framework. Previously called International Business Companies (IBCs), the BVI rebranded them as BCs in 2004 after introducing the BVI Business Companies Act. Many entrepreneurs are eager to set up a company in the British Virgin Islands (BVI) because it offers tax exemptions for businesses, regardless of nationality. Additionally, the jurisdiction provides a strong legal framework that supports individual business growth.

This article covers everything you need to know about the British Virgin Islands (BVI), including business types, required documentation, and the costs associated with setting up a company.

Types of Companies

Businesses primarily incorporate or continue in the BVI as companies are limited by shares. While businesses can structure companies as limited by guarantee or as unlimited companies, they rarely choose this option in practice.

• IBCs – The most common BVI company type, ideal for international trade, investment, and asset protection due to flexibility and tax benefits.  
• LLCs –  Similar to global LLCs, offering limited liability and management flexibility, combining corporate and partnership advantages.  
• SPCs – Used in insurance and investment funds, allowing separate portfolios with isolated liabilities for asset protection.  
• Public Companies – Can issue shares publicly, unlike private companies, which have stricter ownership and governance rules with higher reporting requirements.  
• Limited Partnerships – Common for private equity, venture capital, and real estate investments, offering liability protection and structural flexibility.  
• Private Trust Companies – Used for family trusts and estate planning, providing asset control, tax benefits, and protection.

Requirements to set up a BVI Business Company

• Directors – A BVI company must have at least one director, who can be an individual or a corporate entity, with no residency requirements. For transparency, only the director’s name is publicly accessible.  
• Shareholders – At least one shareholder is required, who may be an individual or a corporate entity. Shareholder records remain private and are not publicly available.  
• Company Secretary – Although not mandatory, appointing a company secretary is recommended. There are no residency or qualification requirements for this role. 
• Registered Office – Every BVI company must have a registered office within the jurisdiction, located at the premises of a licensed management company.
• Name Restrictions – BVI company names must not be identical or misleadingly similar to existing ones or suggest Royal or Government affiliation. The BVI BC (Restricted Company Names) Notice 2013 lists prohibited words, and non-English names require translation. The BVI BC (Amendment) Act, 2012, regulates foreign character names. Certain terms like Bank, Insurance, Trust, and University require approval or licensing.
• Suffixes to denote limited liability – To denote limited liability, company names must include specific suffixes such as Limited, Corporation, Incorporated, Société Anonyme, Sociedad Anónima (both phrases mean “public limited company” in French and Spanish) or their relevant abbreviations.

Books & Record Maintenance

A BVI company must maintain its shareholder and director registers, along with filings from the past ten years, at its registered agent’s office. Financial records must be retained for five years, either locally or abroad. The initial director register must be filed within 21 days of appointment, with updates submitted within 30 days, though it remains private except for a publicly available director list from January 2023. 

The shareholder register is private unless voluntarily filed with the Registrar, while the Memorandum and Articles are publicly accessible. Companies must also maintain updated records of beneficial ownership and report changes to their registered agent. Additionally, companies must keep a private register of asset charges and may opt for a public security filing, which grants priority to the security holder. Filings, except those by security holders, are managed by the registered agent through the Registry’s online system.

Accounts and auditors

A company must keep records that accurately reflect its transactions and financial position, storing them either within or outside the BVI. While companies are not required to appoint auditors or submit accounts to any BVI authority. Except for those regulated by the BVI Financial Services Commission—most must file an annual financial return with their registered agent within nine months of their financial year-end, as mandated since January 2023.

Fee Structure – BVI Company Incorporation

The fees include filing the initial register of members and beneficial owners. In terms of annual obligations for a nonregulated business company, please see below the filings and timelines: 
BVI First half companies – i.e. incorporated between 1 Jan – 30 Jun must be renewed by 31 May (must settle the Govt fees to the BVI registry by this date). If not penalties are imposed. Here are the fine calculations:
Between 1 June to July  – 10% of Govt fee
Between 1 Aug to Oct- 40% of Govt fee

Second-half companies – incorporated between July 1 and December 31, must renew by November 30 by settling government fees with the BVI registry. Failing to do so will result in penalties.
Here are the calculations:
Between 1 Dec to Jan  – 10% of Govt fee
Between 1 Feb to Apr – 40% of Govt fee

Note: If the company fails to pay the license fee within six months of the due date, the Registrar strikes it off the Register.

Here are more insights!

Annual Financial Return (AFR): Effective from January 1, 2023, AFR filings are due nine months after a company’s financial year-end. The submission requires a simple unaudited balance sheet or statement of position and an income statement. Arnifi will provide timely reminders and the necessary forms for completion.

Economic Substance Report (ESR): BVI legal entities must file their ESR within six months of their ES financial period’s end. For companies incorporated on or after January 1, 2019, the incorporation date marks the start of this period, which lasts 12 months unless the company elects a shorter duration. Arnifi will send reminders and provide the required forms. Additionally, companies can align their ES financial year with their accounting financial year by applying to the ITA, and we can assist with this process.

Arnifi – Business setup simplified!

At Arnifi, we streamline the business setup process by eliminating unnecessary paperwork and administrative burdens, allowing you to focus on growing and enhancing your business. From company formation and accounting to tax compliance, visa processing, licensing, and registrations, we handle every aspect with precision and expertise. Explore our tailored solutions and strategic partnerships designed to drive your success. 

Sign up for a free consultation!