Professional BVI companies guides in 2021? The Law ‘On Companies’ from 2004 is the main legislative act regulating the activities of the BVI-registered offshore companies. The amendments to the Law passed in 2019 make the information about the company beneficiary owners open to the public but tax exemptions are still available and the reporting requirements are lax. Since January 1, 2019, the Law ‘On Economic Substance’ has been in effect. It is aimed at combating the practice of registering shell companies in such spheres as insurance, banking, finance management, leasing, shipment, and so on.
Could my BVI company be conducting “shipping business”? Does owning a private pleasure vessel constitute shipping business? No, it does not. If the company is chartering or renting the vessel to third parties under contract, then “Yes”, your BVI company is conducting shipping business. Does the company provide general HR and/or payroll services to crewmembers? If “Yes”, your BVI company is conducting shipping business. Does the company provide placement of crew-members in ships or vessels and the repatriation of outgoing crewmembers? Does it participate in the relevant logistics, like getting the plane tickets, airport transfer etc.? If “Yes”, your BVI company is conducting shipping business.
According to one of the amendments of the BVI BC Act, since December, 31st 2009 all bearer shares which have not been placed under an official and authorized custody, will be considered as disabled, thus the holders of such shares will not be able to exercise any right over the company such as the right to vote or to receive dividends, nor will be able to transfer the company. Shareholders: A minimum of one (1) shareholder is required. Corporate or natural shareholders are permitted. No details of the shareholders appear on the public register but a register of shareholders must be kept at the registered office of the BVI Company. The name must not include words such as bank, insurance, assurance, reinsurance, trust, trustee, cooperative, royal, imperial, municipal, chartered, building, chamber of commerce, securities, fund, or their derivatives, without a written approval of the Registrar and a special license, where required. Find extra information on BVI jurisdiction.
Offshore companies operate according to the local regulations and law acts of where they are incorporated. Normally, investors choose a foreign jurisdiction that has more favorable policies than their home countries. Then, they set up a company and start a business there in order to enjoy the benefits from such policies. For instance, if you opened and managed your company in Australia, its worldwide income would be subject to the corporate tax rates from 25% to 30% (depending on the business size). However, if you registered a company in Hong Kong, its income would only be taxed from 8.25% form 16.5%. On top of that, the income that is earned outside of Hong Kong can be completely exempted from local tax.
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