the versatility and uses of a british virgin islands business company (the “bvibc”)
TRANSCRIPT
• Introduction: The British Virgin IslandsOverview of the BVI and the BVI Financial Services Sector
• British Virgin Islands Business CompaniesHistory, Main Features, Uses and Versatility in Corporate Structuring
• BVIBC Case StudiesA look at 5 typical business structures using BVI corporate entities
Presentation Outline
• Abacus: How Our Network Can HelpOverview of the services offered through Abacus Trust and Management Services Limited and its network of affiliate companies.
• Conclusion
• Questions & Answers
Presentation Outline
Overview of the BVI
• British Overseas Territory
• Population 25,000
• GDP approximately US$ 1 Billion
• Per Capita US$38,000
• World’s pre-eminent corporate domicile - Over 700,000 companies
• Primary company legislation – British Virgin Islands Business Companies Act, 2004 (the “BVIBC Act”)
Introduction
Profile of BVI Licensed Financial and Fiduciary Service Providers & Practitioners
Banks9
Fund Managers/ Administrators 522
Trust Companies209
Registered Agents 110
Company Management 20
Custodians4
Insurers / Insurance Managers 452
Accounting / AuditFirms 10
Law Firms 20
Licenced InsolvencyPractitioners 15
Figures extracted from Statistical Bulletins and other information published by the British Virgin Islands Financial Services Commission
What Makes the BVI Attractive?• Democratic Internal self government• Economic and political stability• English Common Law legal system• Well established trust law jurisdiction• Leading international corporate domicile• US dollar currency• No exchange controls• Several major commercial banks (with full range of domestic and offshore services)• State-of-the-art telecommunications• User-friendly flexible legislation• Ready access to USA and Europe• Fully electronic commercial registry with 24 hour access• Low level of personal taxes• No capital, gains, inheritance, succession or gift taxes• Effective Regulation with without over-regulation• Competitive administrative costs
Introduction
Overview of the BVIBC Act
• Came into force on January 1, 2005
• Provisions of BVBC Act rooted in the principles of its predecessor, the repealed International Business Companies Act, 1984
• Conceptualized with the offshore investor in mind
The BVI Business Company
Why Change Old Regime? (IBC Act and Companies Act)
• Demand for more flexible corporate vehicles
• Address long-standing drafting issues to provide clarity and comprehensiveness to certain provisions
• Compliance with international initiatives and obligations
The BVI Business Company
Distinctive features of a BVIBC
• Wide range of corporate vehicles (7 types)
• No restrictions on objects/purpose
• Flexibility in choice of company name
• One director and shareholder minimum
• Non-resident and non-domiciled shareholders/directors
• Corporate directors/shareholders
• Reserve directors
• Alternative directors
• Codification of members rights and remedies (derivative action, etc.)
• Directors duties defined and codified
The BVI Business Company
Distinctive features of a BVIBC
• No concepts of authorised capital, capital and surplus
• Bearer shares
• Confidential records
• No annual filings
• Creditor-friendly regime for registration and ranking of charges
• Simple procedures for liquidation, continuation, mergers, amalgamations, arrangements, strike off and restorations
• Electronic directors and shareholders meetings
The BVI Business Company
Distinctive features of a BVIBC
• No AGM requirements
• Financial assistance for the purchase of own shares
• Defined distribution rules - distributions forms include assets, debts, dividends
• No appointment of auditors
• No Tax – income, capital gains, dividends, withholding, estate, gift or stamp duty
The BVI Business Company
Versatility and Uses
• Investment holding
• Trading
• Property Investment
• Financing
• Patent, royalty and copyright holdings
The BVI Business Company
• Entertainment and professional services
• Ship Management & Yacht Ownership
• International e-commerce operations
• Tax planning
• Estate planning
Offshore Investor
BVI Holding Company
100%
Ownership Options
•Nominee Shareholder
•Trust
•Investor (Comp/Individual)
Distribution Options
•Loans
•Dividends
•Payment of Expenses
•Purchase of Assets
•Transfer of Indebtedness
Management Options
•BVI Corporate Directors
•Powers of Attorney
•Investor (Company/Individual)
Offshore Asset/Investment
100%
Benefits
•No Tax on Share Transfers
•No Tax on Dividends
•No Capital Gains Tax
•Capital appreciation on Investments accumulated at BVI level – Tax neutral Jurisdiction
•No Withholding Tax
•Easy Transfer of Property
•Where permitted by M&A can act in best interest of parent company
Uses
•Estate Planning
•Tax Planning
•Asset Holding
BVIBC Case Study: Investment/Asset Holding Structure
BVIBC Case Study: Property Investment / Development Structure
Offshore Investor
BVI Holding Company/Property Development Co.
100%
Ownership Options
•Nominee Shareholder
•Trust
•Mutual Fund
•Investor
Management Options
•BVI Corporate Directors
•Powers of Attorney
•Investor
BVI 1 BVI 2 BVI 3 BVI 4
OffshoreProperty
1
OffshoreProperty
2
OffshoreProperty
4
OffshoreProperty
3
Benefits
•Tax efficient
•Ease of transfer of property after development complete
•Accumulation of profit in tax neutral jurisdiction
•Flexibility to develop different types of property and attract Investors to each according to preference
•Each property held by separate legal entity so separate accounts
•Investor can partake at different levels (Holding Co/Mutual Fund /Subsidary)
Uses
•Property Investment
•Property Development
Distribution Options
•Loans
•Dividends
•Redemptions
•Payment of Expenses
•Purchase of Assets
•Transfer of Indebtedness
100%
BVI Company
100%
Offshore Investor
Offshore Supplier
Offshore Customer
Product Distribution
Supply ContractSales Contract
Management Options
•BVI Corporate Directors
•Powers of Attorney
•Investor
Ownership Options
•Nominee Shareholder
•Trust
•Investor
Distribution Options
•Loans
•Dividends
•Payment of Expenses
•Purchase of Assets
•Transfer of Indebtedness
Uses
•Regional Sales/Trading Offshore
•Sale of Tangible Goods
•Financing on-Shore activities with surplus from Offshore activities
Benefits
•Offshore Management of Offshore business
•Offshore Billing, Accounts, Mail
•Accumulation of Profit in tax neutral jurisdiction
•Can act in best interest of Parent Company if permitted by M&A
BVIBC Case Study: Trading Structure I (Tangibles)
BVI Company
100%
Offshore Investor
Ownership Options
•Nominee Shareholder
•Trust
•Investor
Distribution Options
•Loans
•Dividends
•Payment of Expenses
•Purchase of Assets
•Transfer of Indebtedness
Management Options
•BVI Corporate Directors
•Powers of Attorney
•Investor
Benefits
•Offshore Management of Offshore business (Billing, Accounts, Mailing, Contract etc)
•Accumulation of Profit in tax neutral jurisdiction
•Can act in the best interest of parent company if permitted by M&A
Uses
•Sale or provision of Intangible Services Offshore (Marketing Services, Sub-licensing of Intellectual Property)
OffshoreCustomer/End user
IP Owner
Licence/Contract Sales Contract/ Sublicence
BVIBC Case Study: Trading Structure II (Intangibles)
BVI Company
100%
BVI Trust
Ownership Structure
•Offshore Beneficiaries (Beneficial Owner)
•BVI Trustee (Legal Owner)
Distribution Options
•Loans
•Advancement
•Maintenance
•Distributions
Benefits
•Added layer of Confidentiality – Trust Deeds not recorded
•No taxes consequences
•Severance of ownership without losing the benefits of ownership
•Profit accumulated at Trust level
Uses
•Asset Protection (by transferring control of assets to the Trustees)
•Minimization or deferral of taxation
•Estate Planning (e.g. holding property for minors, ensuring that property passes in succession and keeping confidential provision of benefits to persons after the settlor’s death)
BVIBC Case Study: Trust Structure
BVIInvestment/Asset/Trading Structure
Management Options
•BVI Corporate Directors
•Powers of Attorney
•Settlor
•Beneficiaries
•Investor
MWM Global HoldingsGroup Limited
Advisory Committee
Abacus Trust & Management Services
Limited
Meade Malone & Co.
TrusteeServices
Company Management Auditing
Int. Audit Audit
Asst. Group
Financial Planning
MWM Financial Services
Group Limited
InvestmentAdvisory
Pension & Investment Plan
Services
MWMReal Estate
Group Limited
MWMCorporate
Services Limited
Insolvency
Lanx Lancis
Legal Services
MWMServicesLimited
Payroll, Recruitment &Money Gram
Business Advisory
Consultancy
Abacus: How Our Network Can Help
Corporate Services:
• Company, Trust and Mutual Fund Incorporations
• Company and Trust Management Services
• Registered Agent and Office Services
• Corporate Directorship and Secretarial Services
• Nominee Shareholder Services
• Mail Forwarding
• Ship Registration
• Banking
Audit and Accounting Services:
• Audit
• Accounting
• Bookkeeping
• Invoicing
• Billing
• Management Consulting
Abacus: How Our Network Can Help
Legal
• Trust
• Mutual Funds
• Corporate & Commercial
• Real Estate
• Labour
• Telecommunications
• Notary Public
Abacus: How Our Network Can Help