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BVI: International Finance Centre

The British Virgin Islands has established itself as an agile, innovative and robust international finance centre, able to accommodate regulatory changes and rebound from economic challenges, natural disasters and global pandemics.
15th August, 2022

Advantages of the BVI:

• Fast company formation
• Straight forward company law
• Tax neutral
• IPO ready
• Data protection
• Access to capital
• No restriction on where a BVI company can carry out its business
• Sophisticated and innovative legislative framework
• A third of all global offshore companies are registered in the BVI
• Global hub for trade and investment
• Supportive and professional infrastructure
• No foreign exchange controls
• Judicial system based on English common law
• Commercial court resolves disputes
• Self-governing British overseas territory.

Despite recent events financial services have remained resilient and at the end of Q1 2022, there were 375,185 active BVI Business Companies registered in the jurisdiction. The nimble response to operating remotely maintained its role as a facilitator of high profile and high value transactions throughout 2020 and 2021.

In 2021 the highest level of new company incorporations was recorded in the BVI since 2018 and the number of new limited partnerships formed in 2021 was more than three times that of 2019 and 2020.
The BVI has become one of the largest centres for the establishment of companies, in particular those created to enable cross-border trade and investment. Its popularity is based on its specialist expertise, stable regulatory regime and independent legal and judicial system based on English Common Law. Right of final appeal rests with the Privy Council in London.

The main reasons for establishing a BVI entity have changed over the past decade. Around three quarters of clients in 2010 were using BVI Business Companies for privacy and tax planning purposes, but by 2020, the number had fallen to one in 10. Corporate service providers are now catering to more corporate and institutional clients, with more structured organisational setups.

BVI firms were involved in tens of billions of dollars' worth of global transactions in 2020 and 2021 - a local law firm advised on one of the largest takeovers by deal value of a publicly-listed BVI company, a $1.1 billion acquisition, while the BVI was under 24-hour-a-day curfew. Another BVI based law firm advised on a $250 million placement, which was one of the highest value BVI Special Purpose Acquisition Company (SPAC) initial public offerings in the past five years.

Financial services revenue grew to $196.4 million in 2021, up from $189.75 million in the previous year. Tax revenues were $32 million more than 2020 and debt fell by $15million. Expenditure was $53 million less than the year before. Supported by financial services annual GDP growth was 2.2 per cent in 2021 with the government expecting growth of 1.8 per cent this year.

For further information on company formation in the BVI please contact Kristal-K Black at kristal-k.black@ils-world.com

Please note: ILS World does not offer tax advice and would therefore recommend you obtain your own tax advice. If you require an introduction to a tax adviser, we would be happy to assist.