Guide to Six Typical uses of BVI Business Companies
The BVI is by far the world’s pre-eminent choice of offshore corporate domicile with well over 1 million companies formed and over 380,000 currently active on the register. On a practical level however, many persons wonder what some of the most popular uses of a BVI Business Company are. Below is a guide which provides an outline of six typical uses:
1. Primary Vehicle for Operational Companies. BVI companies are often used as the primary vehicle under which a business is operated. This can be a Factory, an Import Export business, an IT Consulting Firm, a product sales website. Such businesses although incorporated in the BVI typically operate in the country or countries adjacent to where the owner is based.
2. Holding Company for Investments. A BVI company is typically used to hold an investment(s) for the benefit of an individual or family office. The form of investment may vary. For example, a portfolio of stocks and bonds at a global investment bank, a commercial complex in Singapore, a residential rental property in London or, an Art collection to name a few.
3. Ship Registration. – Persons choosing to register ships in the British Virgin Islands typically use a British Virgin Islands company to own the ship.
4. VISTA Trusts – unique only to the BVI, a VISTA trust enables a settlor to set up a trust where the trustees are subject to limitations on their ability to intervene in the management and operations of the trust assets. So, for example a settlor can create a trust to own shares in a BVI Company under which a family business operates, confident in the knowledge that he can exercise full control over the business except for rare situations where control reverts to the trustees. Combining a BVI company with a VISTA trust allows a family to access the benefits of a trust arrangement such as estate and succession planning without being subject to trustee intervention and interference which are the hallmarks of standard trusts in other jurisdictions.
5. Funds – BVI law allows for private, professional and public funds. Wealthy individuals are mostly attracted to the private funds which limit the number of investors to 50. A company can be used as the vehicle to set up the fund and a director of the fund can thereafter manage assets subject only to restrictions contained in the fund offering documents. Shares can be easily issued to family members and they can easily be redeemed or separated into different classes with different rights.
6. Initial Coin Offerings – Initial currency offerings (ICO) for new crypto-currencies have become increasingly popular over the past two years. Although there are no specific crypto, blockchain or ICO provisions or guidelines built into any BVI Legislation at present, BVI companies provide certain inherent advantages which have made the BVI an attractive jurisdiction with several successful launches in recent times.
Written by: Glenn Harrigan