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Historically a welcoming and hospitable environment for overseas investment, the British Virgin Islands offers a variety of attractive features that make it a magnet for prospective business owners.
The Caribbean nation's business climate is known for its stability and competitiveness. Yet it's also a relaxed environment, with most activities centered on the tourism and financial services sectors.
British Virgin Islanders are known for their courteous behavior, so it's important to be aware of this and reciprocate in order to assure smooth business negotiations.
The benefits of doing business in the British Virgin Islands
Like many small nations, the British Virgin Islands possesses a nimble and responsive system of government. The country's legislative framework is sophisticated and innovative—two things that are a serious boon for new business. Since the adoption of the BVI Business Companies Act in 2004, more than 500,000 firms have been incorporated on the island. The country's central location and highly-favorable business environment make it a huge draw for international investment.
Incorporation in the British Virgin Islands offers significant advantages. Among these are the ability to list on any stock exchange in the world, the use of the U.S. dollar as local currency and the absence of exchange controls. These factors help make the British Virgin Islands one of the world's most popular destinations for newly incorporated private and holding companies.
The nation's economy is robust and steady, thanks to its position as a worldwide leader in financial services. The British Virgin Islands have been recognized for high tax transparency, strong regulatory and compliance standards and a reliable and predictable investment environment. Such stability is deeply prized by investors, making the country a highly appealing destination.
The challenges of expanding into the British Virgin Islands
Despite an extremely favorable business climate and strong local institutions, the British Virgin Islands are not without challenges for new businesses.
First, the nation's property laws developed in a somewhat patchwork fashion. The Conveyancing and Law of Property Act is the nation's primary legal framework governing property rights. Yet that law, which was drawn from British legislation, was updated by the BVI Business Companies Act.
These updates allow for exclusion of the Conveyancing and Law of Property Act in certain cases, such as those involving the security interest over shares in a domestic company. Successfully navigating these distinctions is often very challenging for new businesses.
Securing work permits may also require extra time and effort. These permits are issued by the labor department and generally take between seven and ten weeks to acquire. The process is governed by the British Virgin Islands Labor Code, which was passed in 2010 and deals with regulation and laws for new companies. Firms hoping to hire domestic or international personnel need to monitor these regulations closely for changes.
Finally, securing a trade license requires the successful negotiation of multiple steps. These include a back-up check, a business plan and a proposal affirming that the firm in question has the financial and technical wherewithal to operate a successful business.
These licenses generally take between four to six weeks to process. New businesses must then register with Social Security Office and the Inland Revenue Department before commencing operations.
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 British Virgin Islands market, it is critical to have an experienced partner with a global footprint. CT has a worldwide network of offices and partners who will make sure your local needs are met, accurately and on time.
CT can help you get set up, provide a single point of contact and provide you with customized solutions for all your needs. We know that one-size does not fit all. From incorporation to dissolution, major mergers and acquisitions, registered agent services and all the day-to-day compliance needs in between, we’ll make sure you have the right support tailored for your global needs.
We offer a full suite of international products and services for our customers, including:• Global Transactional Services• Global Managed Services• Global Business Expansion GuidesCT has helped businesses and law firms expertly manage compliance issues for 120 years. To learn more about how we can help you better manage your global compliance needs, contact a CT representative at 844-318-1457 (toll-free US).
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