Dennings (Trustees) Limited is able to act for its clients who wish to form international business companies in SVG. Also, working through our British Virgin Islands affiliates we are able to facilitate the formation of entities in that jurisdiction. Consequently, we are also able to assist our clients in offshore tax planning, diversifying their tax planning structures so as to obtain maximum tax efficiency and confidentiality.
The International Business Companies (Amendment and Consolidation) Act 2007 is the definitive law governing the formation and operation of IBC’s in SVG. This Act now gives SVG IBC’s additional flexibility in their use.
Some of the main attributes of the SVG IBC are as follows:
SVG IBC’s are not liable to any form of local taxation. However where it is advantageous for the client to do so, the offshore company may irrevocably elect to pay SVG taxes at 1% so as to take advantage of the Caricom Tax Treaty.
There is no requirement to prepare audited financial statements.
SVG IBC’s require no minimum level of share capital and in theory could be capitalised at a dollar or less.
The SVG IBC which is limited by guarantee is sometimes referred to as a “mutual” company. Such a company has no share capital. Members of the company undertake that in the event of winding up, each will contribute a fixed or unlimited sum towards the assets of the company. Such a corporate structure is the perfect one for establishing not-for-profit organisations such as charities, foundations, private trust companies etc.
The SVG IBC which is limited by guarantee and having a share capital is often referred to as a “hybrid” company, as it is a combination of the traditional IBC limited by shares, and the pure mutual company limited by guarantee. The hybrid is the perfect tax planning structure for residents and citizens of countries that tax their nationals on worldwide income (e.g. USA; or those that do not recognize trusts (e.g. France)). Much expertise goes into the creation of the hybrid and its accompanying Articles and By Laws. Once perfected, however, it is a creature, which is more flexible than any other corporate structure, and is capable of operating as a quasi-trust.
The IBC Act allows provides for the incorporation of segregated cell companies which are widely used in establishing captive insurance companies and offshore hedge and mutual funds. It also provides for establishing unlimited companies, which are much used in private equity offerings.
In summary, SVG IBC’s have the following features:
- A SVG IBC has full corporate capacity to engage in any lawful activity, except that it may not (a) make its goods or services available to persons fiscally resident in SVG, (b) engage in any activity which a requires a licence in SVG unless such a licence has been granted, or (c) own an interest in local real estate unless certain prescribed conditions are met.
- Shareholders, directors and officers may reside anywhere in the world and their meetings may, similarly be held wherever they decide. There is no residency or nationality requirement for shareholders, directors and/or officers of a SVG IBC.
- Offshore Companies may be formed with as few as one shareholder who may be a natural person or a juridical entity.
- Offshore Companies may be formed with as few as one director, who may be a natural person or a juridical entity.
- There is no requirement for a company secretary.
- SVG IBC’s are, upon incorporation, provided with a 25 year tax exemption certificate and are thus exempted from all forms of direct taxation in the jurisdiction. Under present regulations there are no personal income tax, estate tax, capital gains tax, corporate income tax or withholding tax for SVG IBC’s. An IBC is further exempted from import duties on office equipment and furniture to be used in its business in SVG.
- An IBC that wishes to benefit from the Caricom Tax Treaty may however irrevocably elect to pay taxes at a rate of 1% on its annual profits. This facility is especially attractive where the beneficial owners are Caricom nationals as such income is not liable to further tax in his home country. Companies that make the election must file annual tax returns in SVG.
- Except where the above election is made, there are no requirements for the filing of annual reports or accounts with any governmental authority in SVG.
- Bearer shares are permitted but records of each bearer share in issue must be maintained by the company’s Registered Agent. The Registered Agent must also maintain custody of the bearer share certificates on behalf of the beneficial owner. The beneficial owner is entitled to be provided with a Certificate of Immobilization as proof that the Registered Agent holds the shares in custody on his behalf.
- The authorized share capital of an IBC may be denominated in any recognised currency.
- There is no minimum capital requirement for an SVG IBC.
- Shares may be issued fully paid, partially paid, or nil paid.
- SVG IBC’s are not required to adopt a company seal.
- The identity of beneficial owners, shareholders and directors are not required to be filed in any public record unless the directors so elect.
- SVG IBC’s must keep a register of charges, but there is no requirement to file this on public record.
- The SVG IBC Act provides for continuation of companies to and from any jurisdiction in the world. It also provides for local companies incorporated, and external companies registered in SVG, to migrate on to the IBC register.
- Amendments to the Articles of Incorporation, mergers or consolidations with foreign corporations can be carried out with a minimum of bureaucratic interference enhancing efficiency and reducing costs.
- Shelf offshore companies are available.
- The incorporation process can take as little as 24 hours, subject to name availability and reservation.