British Virgin Islands

Business Environment
British Virgin Islands legislation allows international business companies, banking and trust business, Insurance or re-insurance business, partnerships, and company management.

Under the International Business Corporations Act 1984, international companies are authorised to reacquire and reissue their own share; issue shares for consideration other than cash, with or without par value, denominated in any currency; have only one subscriber and only one shareholder; have a single directorate; have corporate directors or shareholders; hold shareholders' or directors' meetings, and maintain books of account, records and minutes outside the jurisdiction. There is no statutory requirement to hold annual general meetings.

There are no requirements to file organisational or accounting information with the Registrar of Companies. A memorandum of articles of association must be filed with the registrar. Share registers are available for inspection only by registered shareholders or by order of a British Virgin Islands court. There are no disclosure rules or minimum capital requirements. International business companies are not authorised to conduct business with residents, or local companies, or own land. Registration must be done through a local registration agent.

General and limited partnerships are registered under the Limited Partnership Act, 1996 and regulations. The act contains many of the provisions of the UK Partnership Act, 1980. However, in some parts addressing limited partnerships, the act follows to a large extent the American pattern of modern limited partnership legislation, specifically that enacted in Delaware. The limited partnership regulations cover general partnerships, including citation clauses, rules for partnerships, a partners' company code of conduct with clients, partners conduct amongst themselves, dissolution of a partnership, provisions for limited partnerships and legal assistance from the courts. Limited partnerships are classified into local limited partnerships and international limited partnerships. Limited partnerships are prohibited from carrying on banking business, insurance business or the business of company management unless licensed or exempted from being licensed as such. International limited partnerships are subject to requirements similar to those of international business companies.

The Banks and Trust Companies Act of 1990 defines three categories of bank licenses: General, Class I restricted, and Class II restricted. Holders of general banking licenses must have a minimum paid up capital of US$2 million and must deposit the sum of US$500,000. The annual fee is US$20,000. Holders of Class I restricted licenses may not take deposits from or make investments in or with any British Virgin Islands resident except with another licensee or with an international business company. The minimum paid up capital requirement is US$1 million and the minimum deposit requirement is US$500,000. The annual fee is US$16,000. Holders of Class II restricted licenses have the same restrictions as a Class I restricted licence, but can only receive funds from undertakings named in the license. The minimum paid up capital requirement is US$1 million and the minimum deposit requirement is US$500,000. The annual fee is US$16,000.

The Mutual Funds Act 1997 requires that all mutual funds must be either a registered public fund or recognised non-public fund. Any person who provides management or administrative services to a mutual fund must be licensed. The act applies to all British Virgin Islands incorporated entities and includes mutual funds formed as trusts and partnerships. The act defines mutual funds as public funds (further classified as 'ordinary, or 'selective' public funds), private funds (funds sold to no more than 50 investors or offered for sale on a private basis), or professional funds (funds sold to professionals or individuals with a net worth over US$1 million).

Insurance companies are governed by the Insurance Act 1994 the Insurance Regulations 1995.

Government has passed legislation restricting the transferability of bearer shares by mandating that they must be held by an approved custodian within a licensed financial institution and be subject to anti-money laundering and customer due diligence. The jurisdiction is classified as a British port of registry and any vessel registered in the jurisdiction has the right to fly the British flag. For a vessel to qualify to be flagged under the British flag, the owner of the vessel must be either a British subject or a British entity. Registration of an international business company in the jurisdiction allows a non-British subject to register a vessel under the British flag.

The British Virgin Islands was not on the Financial Action Task Force's blacklist as 'non-cooperative' in preventing money laundering. In February 2002 the jurisdiction signed a letter of commitment with the Organisation for Economic Co-operation and Development agreeing to exchange information with overseas authorities in criminal tax matters by 31 December 2003 and in civil tax matters by 31 December 2005.

Taxes
Corporations registered under the IBC Ordinance are exempt from all local taxes and stamp duty asset security. There are no inheritance taxes, death duties, capital gains, capital transfer, or estate taxes. Dividends are neither subject to withholding, or income tax requirements. Interest is also exempt from tax when paid to non-residents, provided the rate of interest is considered reasonable. Where applicable a company’s tax rate is 15% of income. Resident companies are subject to tax on their worldwide income less deductions. Non-resident companies are subject to tax only on income remitted to, or derived from the jurisdiction. The tax rate is reduced to 1% on profits for resident companies that obtain 90% or more of profits from trading outside the jurisdiction. Companies are taxed at 1% on foreign investment income if the income is exempt from tax in the jurisdiction in which it arises. Customs duties varies from 5% to 20%. For individuals gross income is taxed on a scale graduated from 3% to 20%. More information is available at the Financial Services Department.

Contact
Registry of Companies, Trademarks & Patents
Government of the British Virgin Islands
PO Box 418
Road Town, Tortola
British Virgin Islands
Tel: 284 494 5355 or 284 494 5356
Fax: 284 494 6331
Email: compreg@fsdbvi.org

Director of Financial Services
Ministry of Finance
Pasea Estate, Road Town, Tortola
British Virgin Islands
Tel: (284) 494 6430
Fax: (284) 494 5016

Inspector of Banks, Trusts & Company Managers
Financial Services Department
Government of the British Virgin Islands
Pasea Estate Road Town, Tortola
British Virgin Islands
Tel: 284 494 6430
Fax: 284 494 5016
E-mail: commissioner@bvifsc.vg

Registrar of Mutual Funds
Financial Services Department
Government of the British Virgin Islands
Pasea Estate
Road Town, Tortola
British Virgin Islands
Tel: 284 494 6430
Fax: 284 494 5016
E-mail: finsvs@candwbvi.net

Latest available figures

Status
The British Virgin Islands is a British overseas territory.

Population (1999)
19, 864 (of which 51% are non-nationals)

Capital
Road Town

Currency
The US dollar is the official currency

Legal System
Based on the British common law system with local variations. Justice is administered by the Eastern Caribbean Supreme Court. A resident puisne judge presides over the High Court, Admiralty, and associated courts. There is a Court of Appeal. Final appeals go to the Privy Council in the UK.

Government
British overseas territory. Representative democracy with internal self-government. The British monarch is the head of state represented by a UK-appointed governor who is responsible for the courts, the public service, the police, and foreign affairs. Parliament is made up of an Executive Council and the 15-member Legislative Council. The Legislative Council is made up of 13 elected members, an appointed ex officio member, and a speaker chosen from outside the council. Members of the Legislative Council are elected for a maximum of four years via a mixed system of nine districts and four country-wide districts. The governor presides over the Executive Council, made up of the chief minister who is appointed by the governor from the majority party, three ministers appointed from the Legislative Council by the advice of the chief minister, and the Attorney-general (ex officio).

Executive
The Head of State is Queen Elizabeth II represented by the UK-appointed governor.

Governor Thomas Macan
Chief minister and minister of finance: Ralph O’Neal

Cabinet
Deputy chief minister and minister of telecommunications and works: Julian Fraser
Natural resources and labour: Reeial George
Education, culture and youth affairs: Andrew Fahie
Health: Ethlyn Smith

Politics
The Virgin Islands’ Party won the May 1999 elections, taking seven seats with 38% of the vote. The National Democratic Party won five seats with 36.9% of the vote. The Concerned Citizens' Movement took one seat with 4% of the vote.

Political Parties
The Virgin Islands’ Party (leader Ralph O’Neal)
National Democratic Party (leader Orlando Smith)
Concerned Citizens' Movement

Economy
The economy is based on tourism, which is the largest employer, and offshore financial services, which provides about 50% of government revenue.

Gross Domestic Product
US$654.06 million (1999)

Inflation (2001)
3.13%

Government Accounts (2002)
Revenues: US$201.06 million. Recurrent expenditures: US$156 million. Capital expenditures: US$121.4 million. Central government public debt: US$49 million.

Public holidays (2004)
1 January (New Year), 8 March (Commonwealth Day), 12 April (Easter Monday), 21 May (Whit Monday), 12 June (Queen’s birthday), 1 July (Territory Day), 2-4 August (August Festival), 21 October (St. Ursula’s Day), 25 December (Christmas), 26 December (Boxing Day).

Time zone
GMT minus 4 hours. There is no summer time clock change.

Sources
Government of the British Virgin Islands
Financial Services Department