Location

The British Virgin Islands is an archipelago of over 40 islands, 16 of which are inhabited. Discovered by Columbus who is said to have been so impressed by their large number that he named them “Las Virgenes” in honour of St. Ursula and her 11,000 attendant virgins they lie to the north west of the United States Virgin Islands. The neighbour with the largest land area is Puerto Rico, 96 km to the west. Except for Anegada, which is a flat reef surrounded island of coral limestone, the Islands are hilly and enoy a subtropical climate. Their greatest tourist attraction is their superb beaches.
Political Structure
In 1672, Britain claimed Tortola. Simultaneously, Denmark asserted her sovereignty over St. Thomas and St. John; then in 1773 Denmark purchased St. Croix from France. The Danish Islands were sold to the United States in 1917 for US$ 25 million. Relations between the United States and British Virgin Islands are good.
The British Virgin Islands are a UK overseas territory with self-government in most internal matters. Under the 1977 constitution, HM Queen Elizabeth II is represented by a governor responsible for external affairs, defence, internal security and the public service, with reserved legislative powers as necessary for the exercise of special responsibilities. On all other matters, the executive council has authority.
The executive council consists of the governor, the chief minister, the attorney-general and three other ministers appointed by the governor from the legislative council on the advice of the chief minister. The legislative council has a four year term and consists of a speaker, 13 directly elected members and the attorney-general.

Economy and Infrastructure

There is an excellent daily air service between the Islands and the USA. Cruise ships call in weekly to the Islands and there are freight carriers.
The economy, one of the most prosperous in the Caribbean area, is highly dependent on the tourist industry, which generates about 21% of the national income.
In 1984, the Government offered offshore registration to companies wishing to incorporate in the Islands, by 2006 the number incorporated had exceed 750,000, incorporation in the first three quarters of 2006 exceeded 51,000 making the British Virgin Islands the leading offshore jurisdiction. The BVI is the only Caribbean jurisdiction to boast the presence of all five of the largest offshore law firms in the region and the legal profession presence in the territory continues to expand. The Finance Sector and Ship Registration now generate approximately 50% of government revenue.

Population, Language and Culture

The population is approximately 31,912, the largest and most heavily populated Island is Tortola which has approximately 18,000 inhabitants. 90% of the inhabitants are of African descent, the balance being made up of European, Indian or mixed race.
The capital, Road Town, is on the southern shore near Sir Francis Drake Channel. Tortola is connected by a road bridge to Beef Island and the local airport.

The official and spoken language is English.

Exchange Control

None.

Type of Law

Common Law, based on English Common Law with local modifications and local statutes.

Principal Corporate Legislation

The Companies Act (Cap. 285), BVI Business Companies Act, 2004 (“The BVIBC Act”). (All companies previously incorporated under the International Business Companies Act, 1984, automatically became subject to the BVIBC Act from 1st January 2007.)
BVI Business Companies (Amendment) Act, 2012.

Taxation and Fees

A Business Company does not pay any tax on its world-wide profits to the British Virgin Islands authorities.
The British Virgin Islands has treaties with Japan and Switzerland, although they have limited benefit and are not applicable to offshore business.
Companies with number of issued shares up to 50,000 pay License Fees of US$350 per year; Companies with number of issued shares more than 50,001 pay the sum of US$1,100 per year.

Financial Statement Requirements

Whilst there is no requirement to file audited accounts with the authorities, The BVI Mutual Assistance (Tax Matters) (Amendment) Act, 2012 states that it is mandatory for a company to keep reliable accounting records for a minimum of five years from the date of transaction. The records must include sufficient information to explain the company’s transactions and determine the financial position of the company with reasonable accuracy.
The Registered Agent must maintain a written record of the physical address where the accounting records are maintained for each company.
BVI companies that fail to comply with the Act are liable to a fine of US$10,000 as stated in Section 98 (2) of the BVI BC Act, 2004.