A company should do everything they can to minimalize its tax bill. Claiming for all legitimate expenses and asking employees to get receipts can help to reduce a company’s tax bill. However, this might not go far enough. This is because it will probably still have to pay a lot of tax. When a business reports healthy profit margins, the amount of tax which they are liable for increases. Profits aren’t the only source of money which tax is deducted from. This is because dividends are also liable for tax albeit at a much lower rate. By choosing an offshore formation, the amount of tax which a business has to pay will be incredibly low. In fact, it might not have to pay any tax at all.
There are plenty of tax havens around the world; Jersey, Gibraltar and the Isle of Man are examples of such. Many tax havens are in the Caribbean i.e. the Cayman Islands, Anguilla and Barbados. The British Virgin Islands (BVI) is another Caribbean tax haven and there are many other benefits of starting an offshore formation there, such as how discrete directors can be.
The BVI formation process means that a directors’ personal details are never revealed to a third party. Unlike what happens in the UK, the identity of who is on a board of directors cannot be disclosed. When searching for investment for an offshore company, a director might not want their personal details to be known. A list of directors at offshore companies in the British Virgin Islands cannot be obtained and secrecy is, therefore, upheld.
The British Virgin Islands doesn’t have its own currency and it uses the US Dollar. Many currencies around the world continue to fluctuate but the US Dollar remains very stable. As the value of the Euro and Sterling can change at a moment’s notice, there is greater investor confidence in the US Dollar. The British Virgin Islands has a lot of stability too in many other ways, such as who it is governed by. An overseas British territory, the UK government is unlike many countries around the world because there is no possibility of it being overthrown. Consequently, businesses can rest assured that their BVI offshore formation will never be at danger of collapsing.
If an offshore company is required soon after a business decides that it wants to be located in a tax haven, there are many organisations which have ones which are ready-made. The same organisation which has ready-made companies might also offer a nominee director service. So, when a company decides to proceed with BVI offshore formation, it can be established not long after. In fact, it could have an offshore site just a couple of days afterwards. This is because the legal foundations have already been laid which would otherwise take a while to complete.
Compared to other tax havens, the British Virgin Islands isn’t criticised as much as others. Many tax havens have been under scrutiny for their approach to how they tax companies which are registered there. Although it is discussed in the media, the spotlight isn’t focused on the British Virgin Islands as much. By choosing a BVI offshore formation, a company might not receive such criticism which other companies have been the subject of if their offshore site is in Antigua or the Cayman Islands.
This is the tip of the iceberg because there are many other advantages to having an offshore formation in the British Virgin Islands. To find out more, why not arrange an appointment with an experienced formation agent that has helped scores of companies?
For more advice on setting up a BVI offshore formation, visit Offshore Formations 247 for more information on various jurisdictions including Dubai, Seychelles and more.