Doing Business in British Virgin Islands
ComplianceJuly 31, 2020

Doing business in the British Virgin Islands

The paradisiacal British Virgin Islands (BVI) are a group of small islands in the Caribbean, located just east of Puerto Rico. First explored by Christopher Columbus in 1493, the islands reminded him of Saint Ursula and her 11,000 virgins – hence the name.

Today, the BVI is a self-governing territory of the UK with one of the most prosperous economies in the Caribbean. As such, it has garnered much interest from global businesses and is one of the premier financial jurisdictions in the Caribbean and the world.

Successfully incorporating and running a business in the BVI requires that companies understand the territory’s laws, rules, and regulations. In this article we review the reasons for doing business in the British Virgin Islands, the risks and considerations, and common FAQs.


Prepare for expansion in this region with all the key information about tax rates, incorporation details, entity types, business environment, and more. Download this country guide for a practical breakdown.



Advantages of doing business in the British Virgin Islands

Global business hub in the Caribbean

The BVI is the Caribbean’s global business hub and has long attracted businesses from around the world due to its strategic and administrative benefits.

Getting an entity started is an easy and quick process. Once started, corporate processes are efficient and administrative costs associated with incorporation are low. Ongoing entity maintenance is simple and compliance obligations are non-onerous.

Tax neutrality

Doing business in the BVI brings significant tax benefits. The BVI is also a tax neutral territory. There is no income tax, corporate tax, capital gains tax, wealth tax, or similar fiscal laws.

Financial Services

Alongside tourism, financial services are one of the BVI’s main economic drivers. There are an estimated 950,000 companies registered in the islands and the BVI is considered one of the major players in this sector.

Close ties to the U.S. Virgin Islands

The BVI has close economic ties to its neighbor islands, the U.S. Virgin Islands, so much so that it has adopted the U.S. dollar as its official currency. This makes it an easy and attractive location for U.S. companies to do business there.

Risks and considerations

Despite the significant advantages outlined above, the BVI present some very real challenges of which outside investors and businesses should be cognizant.

Economic substance reporting

Any business entity operating in the BVI must comply with its government’s Economic Substance Act (ESA). The ESA requires that relevant legal entities must demonstrate adequate presence and/or conduct substantial economic activities if they are located in the BVI for tax purposes.

Like other substance laws, the ESA is intended to ensure that BVI entities (whether formed in the BVI or registered foreign entities) that carry on certain activities have demonstrable economic substance in the BVI. That is to say, relevant entities must demonstrate they have sufficient economic activity in the country to justify the profits they’re making. Read more about the requirements of this important piece of legislation.

Obtaining a business license

Business license requirements are extensive in the BVI. Significant documentation and proof must be provided that the company has the technical and operational capabilities to successfully run their specific business.

Furthermore, processing times are lengthy and can take between four and six weeks for approval.

Obtaining work permits

The BVI is very protective of its local workforce. As a result, work permit applications can take anywhere from seven to ten weeks. The requirements for approval are also very specific and ongoing labor-related regulation can mean that permits must be updated frequently.

Business culture

Every culture is different and, as with the rest of the Caribbean, the business climate in the BVI is more relaxed compared to the U.S. This means that U.S. businesses should become accustomed to a different procedural and process pace – in the BVI nothing is rushed and manners and politeness count.

Another important consideration is that because tourism and financial services are the main economic drivers in the BVI, the environment is transitory with a low level of permanent residents.


Prepare for expansion in this region with all the key information about tax rates, incorporation details, entity types, business environment, and more. Download this country guide for a practical breakdown.



Frequently asked questions for doing business in the BVI

Why should I consider doing business in BVI?

The BVI’s fiscal policies, its streamlined process for getting an entity set up and its strategic location provide many benefits for companies looking to expand abroad.

What challenges should I consider when expanding to BVI?

With the newly implemented Economic Substance Act requiring specific activities to be reported on an ongoing basis, companies must be aware of their own individual requirements and how the ESA affects their operations in this jurisdiction.

What is the corporate tax rate?

No corporate tax is imposed on companies incorporated in the BVI.

What are the business entity types available?

There are several entity types to choose from, including Company Limited by Shares, Unlimited Company with or without Shares, Restricted Purpose Company, among others.

How long does it take to complete the incorporation process?

It can take approximately 4 to 8 days.

Conclusion

The challenges of operating in a new country are often daunting – regulations are constantly evolving, and no business landscape remains static. Without a solid grasp of the issues at hand, businesses are exposed to tax penalties and even the prospect of civil or criminal litigation.

If you are considering entering the BVI market, it is critical to have an experienced partner with a global footprint. With a worldwide network of in-country experts, CT will make sure your local needs are met, accurately and on time.

CT can help you get set up, through a single point of contact and provide you with customized solutions for all your needs. We’ll help to ensure you have the right support tailored to your global goals.

CT has helped businesses and law firms expertly manage compliance issues for 125 years. To learn more about how we can help you better manage your global compliance needs, contact a CT representative at (855) 444-5358 (toll-free U.S.).


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