BVI incorporation

[bigladsmith]

Hi All,

I've been looking for a new offshore jurisdiction recently, in the main to try and move away from a blacklisted IBC to something less of an issue for my end clients.

I have started looking into BVI incorporation but the economic substance tests are somewhat of a pain, not through my activities, the company activities are providing consultancy services to end clients. The issue is the beneficial owner information.

Obviously I want to keep my name off anything in the event governments/agencies come looking/checking. Do any of the forum members have experience in incorporating in the BVI recently and what's actually disclosed?

Furthermore I see that its possible to incorporate in the BVI where the company is owned by a trust of another jurisdiction such as Belize. Such a set-up in the BVI uses corporate director and nominee shareholders anyhow but what's the actual advantage of this set-up and is it worth it? Does it help things or does it make life more difficult?

Thanks for your help guys.

BLS

 

[Sols]

Obviously I want to keep my name off anything in the event governments/agencies come looking/checking. Do any of the forum members have experience in incorporating in the BVI recently and what's actually disclosed?

Beneficial Ownership Registers now implemented for British Virgin Islands Companies - Campbells

New legislation has been enacted in the British Virgin Islands (the “BVI”) to require registered agents to establish and maintain a beneficial ownership database (“UBO Database”) and requiring the Government of the British Virgin Islands to establish and maintain a search platform, referred to...

www.campbellslegal.com

Your details are known to the BVI government.

Furthermore I see that its possible to incorporate in the BVI where the company is owned by a trust of another jurisdiction such as Belize. Such a set-up in the BVI uses corporate director and nominee shareholders anyhow but what's the actual advantage of this set-up and is it worth it? Does it help things or does it make life more difficult?

Offshore company beneficial ownership registers and trusts

Questions remain as to whether the information on BO's will become publicly available and, if so, on what conditions and to what extent. Read more.

www.careyolsen.com

It's not always entirely clear, which for now probably means it's still possible. Maybe. It depends on your structure and circumstances.

 

[bigladsmith]

Beneficial Ownership Registers now implemented for British Virgin Islands Companies - Campbells

New legislation has been enacted in the British Virgin Islands (the “BVI”) to require registered agents to establish and maintain a beneficial ownership database (“UBO Database”) and requiring the Government of the British Virgin Islands to establish and maintain a search platform, referred to...

www.campbellslegal.com

Your details are known to the BVI government.

Offshore company beneficial ownership registers and trusts

Questions remain as to whether the information on BO's will become publicly available and, if so, on what conditions and to what extent. Read more.

www.careyolsen.com

It's not always entirely clear, which for now probably means it's still possible. Maybe. It depends on your structure and circumstances.

Your details are known to the BVI government.

That goes for most things in life now where governments are concerned, but I see from the detail you kindly shared above that the UK were the first to make an agreement with the BVI to have access to this and with more to follow since this is an article from 2017.

The 25% test for UBO is interesting however:

A beneficial owner is an individual who ultimately owns or controls a corporate or legal entity including an individual who:

1. holds directly or indirectly 25% or more of the shares in the company;
2. holds directly or indirectly 25% or more of the voting rights in the company; or
3. otherwise exercises control over the management of the company.

This means if there are 5+ natural persons then the UBO isn't easy to determine but I suspect point 3 will clear that up in the event of an investigation.


Thanks also for the details on the trust - I'll take some time to read that in more detail.

 

[Sols]

The 25% test for UBO is interesting however:

A beneficial owner is an individual who ultimately owns or controls a corporate or legal entity including an individual who:

1. holds directly or indirectly 25% or more of the shares in the company;
2. holds directly or indirectly 25% or more of the voting rights in the company; or
3. otherwise exercises control over the management of the company.

This means if there are 5+ natural persons then the UBO isn't easy to determine but I suspect point 3 will clear that up in the event of an investigation.

Typically in such situations, the person(s) owning the most (even if it's under 25%) end up being the UBOs, or everyone is a UBO, or the threshold is simply lowered. Or they start looking at different series of stock, day to day management, amount of cash put in, revenue sharing models, and other things that indicate benefit or control.

25% is by today's standard quite generous. Lately, I've been seeing financial institutions and other regulated businesses wanting to see 10% and up.