The Versatility And Uses Of A British Virgin Islands Business Company (The “BVIBC”)

The Versatility And UsesOf A British Virgin Islands

Business Company(The “BVIBC”)

• Introduction: The British Virgin IslandsOverview of the BVI and the BVI Financial Services Sector

• British Virgin Islands Business CompaniesHistory, Main Features, Uses and Versatility in Corporate Structuring

• BVIBC Case StudiesA look at 5 typical business structures using BVI corporate entities

Presentation Outline

• Abacus: How Our Network Can HelpOverview of the services offered through Abacus Trust and Management Services Limited and its network of affiliate companies.

• Conclusion

• Questions & Answers

Presentation Outline

Overview of the BVI

• British Overseas Territory

• Population 25,000

• GDP approximately US$ 1 Billion

• Per Capita US$38,000

• World’s pre-eminent corporate domicile - Over 700,000 companies

• Primary company legislation – British Virgin Islands Business Companies Act, 2004 (the “BVIBC Act”)

Introduction

Profile of BVI Licensed Financial and Fiduciary Service Providers & Practitioners

Banks9

Fund Managers/ Administrators 522

Trust Companies209

Registered Agents 110

Company Management 20

Custodians4

Insurers / Insurance Managers 452

Accounting / AuditFirms 10

Law Firms 20

Licenced InsolvencyPractitioners 15

Figures extracted from Statistical Bulletins and other information published by the British Virgin Islands Financial Services Commission

What Makes the BVI Attractive?• Democratic Internal self government• Economic and political stability• English Common Law legal system• Well established trust law jurisdiction• Leading international corporate domicile• US dollar currency• No exchange controls• Several major commercial banks (with full range of domestic and offshore services)• State-of-the-art telecommunications• User-friendly flexible legislation• Ready access to USA and Europe• Fully electronic commercial registry with 24 hour access• Low level of personal taxes• No capital, gains, inheritance, succession or gift taxes• Effective Regulation with without over-regulation• Competitive administrative costs

Introduction

Overview of the BVIBC Act

• Came into force on January 1, 2005

• Provisions of BVBC Act rooted in the principles of its predecessor, the repealed International Business Companies Act, 1984

• Conceptualized with the offshore investor in mind

The BVI Business Company

Why Change Old Regime? (IBC Act and Companies Act)

• Demand for more flexible corporate vehicles

• Address long-standing drafting issues to provide clarity and comprehensiveness to certain provisions

• Compliance with international initiatives and obligations


Distinctive features of a BVIBC

• Wide range of corporate vehicles (7 types)

• No restrictions on objects/purpose

• Flexibility in choice of company name

• One director and shareholder minimum

• Non-resident and non-domiciled shareholders/directors

• Corporate directors/shareholders

• Reserve directors

• Alternative directors

• Codification of members rights and remedies (derivative action, etc.)

• Directors duties defined and codified



• No concepts of authorised capital, capital and surplus

• Bearer shares

• Confidential records

• No annual filings

• Creditor-friendly regime for registration and ranking of charges

• Simple procedures for liquidation, continuation, mergers, amalgamations, arrangements, strike off and restorations

• Electronic directors and shareholders meetings



• No AGM requirements

• Financial assistance for the purchase of own shares

• Defined distribution rules - distributions forms include assets, debts, dividends

• No appointment of auditors

• No Tax – income, capital gains, dividends, withholding, estate, gift or stamp duty


Versatility and Uses

• Investment holding

• Trading

• Property Investment

• Financing

• Patent, royalty and copyright holdings


• Entertainment and professional services

• Ship Management & Yacht Ownership

• International e-commerce operations

• Tax planning

• Estate planning

Offshore Investor

BVI Holding Company

100%

Ownership Options

•Nominee Shareholder

•Trust

•Investor (Comp/Individual)

Distribution Options

•Loans

•Dividends

•Payment of Expenses

•Purchase of Assets

•Transfer of Indebtedness

Management Options

•BVI Corporate Directors

•Powers of Attorney

•Investor (Company/Individual)

Offshore Asset/Investment

100%

Benefits

•No Tax on Share Transfers

•No Tax on Dividends

•No Capital Gains Tax

•Capital appreciation on Investments accumulated at BVI level – Tax neutral Jurisdiction

•No Withholding Tax

•Easy Transfer of Property

•Where permitted by M&A can act in best interest of parent company

Uses

•Estate Planning

•Tax Planning

•Asset Holding

BVIBC Case Study: Investment/Asset Holding Structure

BVIBC Case Study: Property Investment / Development Structure

Offshore Investor

BVI Holding Company/Property Development Co.

100%

Ownership Options


•Trust

•Mutual Fund

•Investor

Management Options



•Investor

BVI 1 BVI 2 BVI 3 BVI 4

OffshoreProperty

1

OffshoreProperty

2

OffshoreProperty

4

OffshoreProperty

3

Benefits

•Tax efficient

•Ease of transfer of property after development complete

•Accumulation of profit in tax neutral jurisdiction

•Flexibility to develop different types of property and attract Investors to each according to preference

•Each property held by separate legal entity so separate accounts

•Investor can partake at different levels (Holding Co/Mutual Fund /Subsidary)

Uses

•Property Investment

•Property Development


•Loans

•Dividends

•Redemptions




100%

BVI Company

100%

Offshore Investor

Offshore Supplier

Offshore Customer

Product Distribution

Supply ContractSales Contract

Management Options



•Investor

Ownership Options


•Trust

•Investor


•Loans

•Dividends




Uses

•Regional Sales/Trading Offshore

•Sale of Tangible Goods

•Financing on-Shore activities with surplus from Offshore activities

Benefits

•Offshore Management of Offshore business

•Offshore Billing, Accounts, Mail

•Accumulation of Profit in tax neutral jurisdiction

•Can act in best interest of Parent Company if permitted by M&A

BVIBC Case Study: Trading Structure I (Tangibles)

BVI Company

100%

Offshore Investor

Ownership Options


•Trust

•Investor


•Loans

•Dividends




Management Options



•Investor

Benefits

•Offshore Management of Offshore business (Billing, Accounts, Mailing, Contract etc)

•Accumulation of Profit in tax neutral jurisdiction

•Can act in the best interest of parent company if permitted by M&A

Uses

•Sale or provision of Intangible Services Offshore (Marketing Services, Sub-licensing of Intellectual Property)

OffshoreCustomer/End user

IP Owner

Licence/Contract Sales Contract/ Sublicence

BVIBC Case Study: Trading Structure II (Intangibles)

BVI Company

100%

BVI Trust

Ownership Structure

•Offshore Beneficiaries (Beneficial Owner)

•BVI Trustee (Legal Owner)


•Loans

•Advancement

•Maintenance

•Distributions

Benefits

•Added layer of Confidentiality – Trust Deeds not recorded

•No taxes consequences

•Severance of ownership without losing the benefits of ownership

•Profit accumulated at Trust level

Uses

•Asset Protection (by transferring control of assets to the Trustees)

•Minimization or deferral of taxation

•Estate Planning (e.g. holding property for minors, ensuring that property passes in succession and keeping confidential provision of benefits to persons after the settlor’s death)

BVIBC Case Study: Trust Structure

BVIInvestment/Asset/Trading Structure

Management Options



•Settlor

•Beneficiaries

•Investor

MWM Global HoldingsGroup Limited

Advisory Committee

Abacus Trust & Management Services

Limited

Meade Malone & Co.

TrusteeServices

Company Management Auditing

Int. Audit Audit

Asst. Group

Financial Planning

MWM Financial Services

Group Limited

InvestmentAdvisory

Pension & Investment Plan

Services

MWMReal Estate

Group Limited

MWMCorporate

Services Limited

Insolvency

Lanx Lancis

Legal Services

MWMServicesLimited

Payroll, Recruitment &Money Gram

Business Advisory

Consultancy

Abacus: How Our Network Can Help

Corporate Services:

• Company, Trust and Mutual Fund Incorporations

• Company and Trust Management Services

• Registered Agent and Office Services

• Corporate Directorship and Secretarial Services

• Nominee Shareholder Services

• Mail Forwarding

• Ship Registration

• Banking

Audit and Accounting Services:

• Audit

• Accounting

• Bookkeeping

• Invoicing

• Billing

• Management Consulting


Legal

• Trust

• Mutual Funds

• Corporate & Commercial

• Real Estate

• Labour

• Telecommunications

• Notary Public


Thank You For Your Attention!

The Versatility And Uses Of A British Virgin Islands Business Company (The “BVIBC”)

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