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British Virgin Islands| Attractions for the Foreign Investor | Highlights of a BVI International Business Corporation | | Area, population, and climate | Legislation KEY FEATURES
Highlights of a British Virgin Islands International Business Corporation
The IBC Act is also beneficial to the British Virgin Islands economy. It contributes directly to public revenues - $54m or approximately 45% of total government revenue in 1997, and approximately 23% of GDP. It also makes an immeasurable contribution to the development of a service driven export culture in the BVI. This is through the development of a professional business infrastructure and range of services, necessary for effective functioning in the competitive international arena. AREA, POPULATION AND CLIMATEThe BVI is a 59 square mile group of islands approximately 60 miles east of Puerto Rico in the Caribbean. It has a population of 17,900 people and it is a British Dependency. It has a constitution and democratically elected parliament. The BVI is politically and economically sound and the Government has virtual autonomy in its decision-making. The final responsibility for the financial services section rests with the Chief Minister of the BVI rather than the British Government. Within its 16 inhabited islands there are several important tourist destinations and the financial services section is concentrated in the Capital, Road Town, Tortola. The population is a blend of indigenous plus expatriates from all six continents. LEGISLATIONThe jurisdiction’s successful history stems from 1984 when the Government passed the International Business Companies Act, which created the concept. IBC’s are extremely flexible corporate vehicles which can be used by trustees for international asset protection, collective investment funds, shipping companies and intellectual property. Additionally, they operate in an environment where there is no income tax for offshore entities and no wealth, capital gains or estate taxes. They also operate under conditions of maximum privacy and confidentiality. Although there is no stock exchange in BVI, many IBCs are listed on stock exchanges elsewhere. There are other benefits too. One need only think of asset security, the freedom to transfer and merge assets and minimum requirements in relation to, for example, the issuance of shares, designation of directors and shareholders and maintenance of records. There is provision for protection of wealth benefits, inheritance wishes and trust interests as well as swift and simple procedures for the establishment of management of operations. Put all these factors together and you come up with "the BVI Advantage" which has attracted many blue-chip international service firms to BVI offering a full range of financial, banking, insurance, accountancy, legal trust, company management and other services. Many of these firms are members of the BVI Association of Registered Agents which has adopted a code of conduct and professional ethics to support the BVI government’s commitment to maintaining the integrity of the jurisdiction. Effective supervision always attracts rather than deters the type of business conducted from BVI. The aim is to ensure that corporate licensees are institutions of international repute who will maintain the good name of the BVI by not associating with dubious business. These firms can draw on state-of-the-art telecommunications because BVI serves as the telecommunications gateway to the Caribbean. They can also rely on highly developed infrastructure and support services and a well-trained management and workforce. BVI enjoys one of the highest literacy rates in the world (at 98%), and has developed a wide range of specialised programmes to train its people in financial services skills. TRUST LAWSAdoption of the Trustee (Amendment) Act 1993 greatly enhanced the competitiveness of BVI’s trust legislation, enabling us to offer a highly attractive environment for the formation and operation of trusts. The Act offers a whole host of desirable features, including flexibility of planning, protection of privacy, wealth, assets and inheritance wishes, and tax exemptions. PROTECTION OF THE TRUST’S INTERESTS AND ASSETS, AND FACILITATION OF ITS MANAGEMENT AND OPERATIONSThese basic principles offer several advantages in practice, including: protection of wealth benefits through the option of election of BVI as the proper law of the trust; protection of inheritance wishes through anti-forced heirship provisions; protection of trust interests through legal acknowledgment of the position and powers of the trust protector; and protection of privacy. There is no public register of trusts. BVI can offer facilitation of more user-friendly trust deeds through extensive trust administration provisions; facilitation of comprehensive investment strategies through provision of broad investment powers for trustees; facilitation of a wide range of estate planning options through provision of a perpetuity period of 100 years and "wait-and-see" rules. The legislation provides for the drafting of trusts to meet a wide range of client requirements, including revocable and non-revocable trusts, short-form or long-form trust deeds, full discretionary or fixed interest settlements, accumulation and maintenance settlements for minors, charities and protective trusts to remove future creditor risks. BVI’s trust legislation is based on the English common law system, and the BVI High Court follows English case law even when this is not technically binding, except where this specifically varies from local legislation on case law. 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