Published on February 01, 2006

Incorporating an international business company in the tax haven of the British Virgin Islands is easy, quick and cheap.

All one needs to spend in the first year is US$1,550 (Bt60,500), and maintaining the firm requires $950 per annum.

International business companies, or IBCs, are very popular widely used offshore companies because of their administrative ease, flexibility, tax-exempt status and the fact that they are widely accepted and understood by the global financial community. Ample Rich Investment Co Ltd, which belongs to the Shinawatra family, is one of them.

It was only in 1985 that the government offered offshore registration, to attract investment to the British Virgin Islands - a small group of islands in the Caribbean some 96 kilometres east of Puerto Rico. Those companies can be registered under the International Business Companies Act, 1984, which allows the incorporation of business entities, which must conduct business outside the islands.

Details on how to set up an IBC in the islands, available through http://www.bmfc.net/companies_bvi.htm, show it can take two days to incorporate an IBC, starting with the submission of the memorandum and a certificate from the registered agent confirming compliance with the islands’ requirements.

There should be no headaches, as incorporating a firm requires only the money and the owners just have to be careful the firm’s name is not identical or similar to an existing company and that its name must be in the Latin alphabet. If the name is in a language other than English, it must be accompanied by a translation to ensure the name is not restricted.

The normal authorised share capital is $50,000 with all of the shares having a par value, this being the maximum share capital for the minimum duty payable upon incorporation and annually thereafter. Still, the minimum issued capital is one share of no par value or one share of par value. That means only one share can be paid up.

Plus, there are many classes of shares permitted - registered shares, bearer shares, shares of no par value, preference shares, redeemable shares, and those with or without voting rights.

The share-capital amount moves in line with the annual fee the company’s owners need to pay to the government. For example, companies with an authorised capital up to $50,000 pay $350 per year. Companies with a share capital more than $50,001 pay $1,100, and firms with a share capital that does not exceed $50,000 and having some or all of its shares with no par value pay $420 annually.

The IBC can have only one shareholder. It can have only one director, who could be of any nationality and need not reside in the British Virgin Islands. Even when it leases an office in the islands, the office need not have a secretary.

Importantly, the islands have no exchange controls, permitting the bringing in and taking out of an unlimited amount of foreign currency.

But the most attractive point in incorporating a company here must involve the taxation issue: “An IBC does not pay any tax on its worldwide profits to the British Virgin Islands authorities”, says the website.

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