A special purpose vehicle (SPV) is a company set up for a specific purpose, structured in a manner that benefits a parent company. In order to open an SPV company in BVI, investors need to follow the local incorporation procedures, along with any regulations that apply to the types of activities the SPV will be involved in.
Our team specializes in British Virgin Islands company formation and can assist investors who are interested in opening and structuring a special purpose vehicle in this jurisdiction. The special purpose vehicle can be structured in different ways, and used for different purposes, chief amongst which being asset securitization.
The process needed for BVI company incorporation is one that has been streamlined and can be aided by our local team. In fact, reaching out to our specialists is advisable, especially when investors cannot be present in the Islands during the entire incorporation process.
Key issues for investors who open an SPV company in BVI
Several types of companies are available for incorporation in the British Virgin Islands. Working with a registered agent is a requirement when opening legal entities in this jurisdiction and, as part of the general incorporation process, our team offers this service to investors who wish to open an SPV company in BVI.
Below, we briefly outline the types of legal entities available for incorporation:
- BVI business company: this can take the form of a company limited by shares, a company limited by guarantee (with or without shares), or an unlimited company (also with or without shares); the BVI company set up requirements for these businesses are in line with the Business Companies Act, 2004;
- Limited partnership: incorporated according to the Limited Partnership Act, 2017; the incorporation thereof is based on a written agreement for the partnership;
- Micro business company: suitable for start-ups; in practice, the previous two business forms can be used to open an SPV company in BVI.
Once investors choose the business form, our team can assist with structuring the special purpose vehicle.
BVI company formation requirements
The following steps are essential for opening a company in the British Virgin Islands. Please note that the ones described below apply for a BVI business company:
- Choose and reserve a company name: the chosen name needs to be a unique one, not infringing the name of a company that is already registered in BVI;
- Decide the shareholding structure: this also includes making the needed disclosures to provide information about the company’s beneficial owners;
- Prepare the documents: this step involves drafting the Articles of Association and the Memorandum; for personalization, our local incorporation agents and lawyers in BVI can assist;
- Registration: submitting the proper documentation to the Financial Services Commission, obtaining any other permits and licenses, choosing the company secretary and paying the government fees.
These steps are relevant to investors willing to open an SPV company in BVI, structured as a BVI business company. In terms of taxation and compliance for the new business, the following are relevant:
- BVI does not impose income tax and, as such nearly all BVI companies are exempt from tax (with certain exceptions in case of land ownership);
- There is no withholding tax, nor value-added tax or sales tax;
- Payroll tax is imposed on the employer and the employee with values for the employer of 2% or 6% of the gross salary;
- A 12% stamp duty applies in some cases and a land tax also applies in case of ownership by a BVI company .
In addition to these requirements, BVI entities can also have reporting obligations concerning FATCA. Our team can give you details as needed.
Contact us if you have any questions about how to open an SPV company in BVI and require assistance during this process.