Monthly Archives: August 2020

Benefits of incorporation in offshore zones

Offshore zones such as the British Virgin Islands or the Cayman Islands are business magnets, and they are drawing business people from all over the world. What is leading to this phenomenon? Here are some perks when you incorporate a company in one of these offshore jurisdictions.

1. Low or zero taxes

One of the most important and popular reasons to transfer your assets to offshore zones, whether it’s personal finances or corporate merits of the company, is that there are no taxes. Offshore zones are called low tax jurisdictions. This allows you to optimize costs and reduce the tax burden.

2. High level of privacy in offshore companies

Confidentiality, a significant reason global companies and wealthy people choose to incorporate in offshore zones, it implies asset protection and privacy. There is no requirement to disclose the register of directors and shareholders, so a certain degree of protection of personal data, transaction information, etc. can be achieved.

3. The speed of companies’ registration offshore

Depending on the offshore zone, the time required to register a new company can be reduced by up to one day. This means that you can start working within a short time. Also, you don’t need to provide a lot of documents to register a company.

4. The ability to open a bank account in any country

By setting up an offshore company, you are not required to create a bank account in that offshore zone. Your bank account can be in any countries of the world, and you can accept payments in a currency convenient for you.

5. No filing requirements

A reason why a business may encounter a problem is with its bookkeeping. Offshore jurisdictions request a simplified form for submitting financial statements, or it does not need to be submitted at all. The main requirement to keep your company running is to pay the annual renewal fee on time and keep the accountings in a place known to the registrar. This makes offshore zones perfect for those who incorporate their business there.

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British Virgin Islands (BVI) – is a British overseas territory in the Caribbean. It is one of the most popular offshore zones. Legally BVI belongs to the UK, which makes it a stable and economically reliable territory. The number of companies registered here has already exceeded one million. Somewhat BVI is an offshore reference zone, the most prestigious and respectable tax haven of the planet, and it is also one of the oldest.

Offshore financial services hold a significant part of the BVI economy. As for the country’s tax system, it is quite typical for the offshore zone: there is no income tax for commercial companies and individuals, and there are no taxes on capital gains. The only payments required are payroll tax (it amounts to 10% for small enterprises, 14% for the rest), licensing fee, as well as company registration fee.

Overall, the advantages of a BVI-registered company are:

• 100% foreign ownership allowed;
• preferential taxation;
• no foreign exchange regulations;
• no minimum capitalisation requirements;
• a legal system convenient for doing business based on the norms of English law which enables companies to cooperate with financial institutions of any country;
• no need to file accounts or a financial statement;
• no audit requirements to renew the company license;
• ability to open a corporate bank account in any country of the world.

From a bureaucratic point of view, registering a business at BVI is simple. You will need one shareholder and one director; the same person can take on both roles. The financial statements of the company can be stored in any country since there are no requirements for its form and mandatory delivery. Notwithstanding, the name of the company should not cause associations with the UK, the government, ministries and departments. If the company is engaged in banking, insurance or trust activities, the appropriate license is required.

Registration (incorporation) of an offshore company at BVI is straightforward. It usually includes a background check, submission of all the documents required and the payment of incorporation fee.  Participation of the company head in the incorporation process is optional – all registration activities can be carried out by the agent.

The documents you need to provide are: 

The Passport of every shareholder/beneficial owner and director;

The ID of every shareholder/beneficial owner and director;

Proof of residential address of every director and shareholder/beneficial owner (must be in English or a certified translation to English). 

To start your BVI company with Acrabiz, check our services here