392:(No 16 of 2004). The slightly cumbersome name was designed to slightly reflect the name of the earlier statute and cash-in on the "IBC brand" which had grown under the former legislation. From 1 January 2005 to 31 December 2005 the two Acts ran in parallel, and it was possible to incorporate a company under either form of legislation. from 1 January 2006 until 31 December 2006, one could no longer incorporate a company under the International Business Companies Act, and all new incorporations had to be conducted under the BVI Business Companies Act. During 2006 detailed transitional provisions were enacted to allow companies formed under the old legislation to adapt to the new legislation without having to significantly amend their
19:
613:
It was pointed out during the discussions that the ring-fencing did not actually change
British Virgin Islands tax law at all. Under previous law, if a BVI company did not trade within the Territory and did not remit earnings to the Territory, no tax was assessed against it. The International
201:
were commissioned by the
British Government to produce a report on the offshore financial industry generally, and the report indicated that approximately 45% of the offshore companies in the world were formed in the British Virgin Islands, making the British Virgin Islands one of the
186:
From 1991 the Act was remarkably successful generating large numbers of incorporations. The
Companies Registry in the Territory had to be expanded twice to cope with the volume of incorporations. The Act was then copied widely by other Caribbean offshore financial centres.
118:
under that legislation was prohibited from conducting business with people resident within the
Territory (i.e. it was for International Business), and in exchange the company was exempt from all forms of British Virgin Islands
379:
Because of the sheer volume of companies involved, the transition to a new legislative framework was accomplished over a two-year transition period. To protect the offshore business, the
British Virgin Islands abolished both
91:
between the
British Virgin Islands and the United States. The British Virgin Islands was not alone in this regard; this was part of a policy of mass-repeal by the United States of double tax relief treaties with
554:"Decades ago, two wealthy Hong Kong entrepreneurs opted to use a British Virgin Islands (BVI) entity for a business venture, with much success: word got around and Hong Kong businessmen followed in their droves."
518:
451:
623:
Although the Act has formally been repealed, certain parts of the Act remain indirectly in force under the BVI Business
Companies Act, 2004 - particularly in relation to de-registration of
372:" tax regime, whereby companies could be incorporated under the International Business Companies Act which could not actually trade in the Territory, but would also be exempt from
194:. Use of British Virgin Islands IBCs became so ubiquitous in Hong Kong, that in commercial jargon offshore companies generally were generically referred to there as "BVIs".
643:
66:
603:
183:. However, the invasion badly shook investor confidence in Panama, and incorporations in the British Virgin Islands under the Act soared from 1991 onwards.
668:
658:
46:(IBCs) within the Territory. The Act played in a huge role in the economic and financial development of the Territory in the 1990s. It has been called "
653:
171:
Initially, market response to the legislation was slow, but by 1988 a steady core of incorporation work was evident. However, in 1990 the U.S. invaded
495:
373:
376:. After a series of discussions, the British Virgin Islands government agreed to repeal the ring-fencing provisions in its tax legislation.
566:
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in the
Territory meant that the last company incorporated under the Act was named "The Last IBC Limited". It was company number 690583.
572:
476:
580:
503:
43:
74:
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519:"A tough Act to follow – looking back at the birth of the BVI's groundbreaking International Business Companies Act"
452:"A tough Act to follow – looking back at the birth of the BVI's groundbreaking International Business Companies Act"
389:
555:
648:
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54:
393:
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418:
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According to the CIA World factbook, in 2004 the
Territory had the 12th highest GDP per capita in the world.
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Business
Companies Act just crystallised this arrangement. The OECD did not find this argument persuasive.
365:
78:
39:
663:
493:
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on all transactions except those relating to land in the Territory. Then the government enacted the
368:". One of the concerns of the OECD was that jurisdictions such as the British Virgin Islands had a "
107:
190:
Despite its American focus, the key market for IBCs incorporated within the Territory developed in
542:
399:
The International Business Companies Act was then finally repealed in full on 31 December 2006.
206:. As a direct result the Territory has one of the highest incomes per capita in the Caribbean.
624:
576:
137:
18:
180:
474:
499:
480:
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70:
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prior to the repeal of the double-tax treaty. The essence of the Act was that a company
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The Act was passed in a partial response to the cancellation by the U.S. government of a
538:
176:
141:
487:
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403:
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Parts of the Act were quite radical for the time. The Act abolished the concept of
160:
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81:. The Act was subsequently amended several times, but most significantly in 1990.
568:
Review of Financial Regulation in the Crown Dependencies (Cmnd Paper 4855 of 2000)
484:
156:
132:
523:
456:
385:
381:
369:
179:. At the time, Panama had been one of the market leaders in the provision of
124:
100:
93:
88:
48:
the most important piece of legislation in BVI history since the emancipation
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191:
537:
This was nearly two years before it would subsequently be abolished in the
471:
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104:
35:
23:
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are almost word-for-word copies of the British Virgin Islands model.
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In 1999, a series of international initiatives were commenced against
65:
The Act was drafted principally by five people: Lewis Hunte, the then
490:
172:
148:" of two different corporate entities, and introduced the concept of
145:
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A special arrangement between the BVI government and one of the key
415:
17:
361:
198:
347:
Source: British Virgin Islands Financial Services Commission
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Chapter 291 of the Revised Laws of the Virgin Islands, 1991
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hailed it as the most important legislation of the decade.
136:
for companies, considerably restricted the requirement for
110:. This reflected the market for British Virgin Islands
77:; and Paul Butler, a partner from the U.S. law firm of
73:
and Richard Peters, who were partners at the law firm,
506:
also enacted legislation which is strikingly similar.
103:
jurisdiction, the Act drew heavily upon elements of
99:
Despite the British Virgin Islands being an English
364:, including an initiative against what was termed "
144:from one jurisdiction to another, it allowed "true
140:, it permitted companies to change their corporate
26:made up 3 of the original 5 draftsmen of the Act.
155:The Act was passed into law by the Territory's
67:Attorney General of the British Virgin Islands
470:The International Business Companies Acts of
8:
53:The original Act was copied widely by other
204:world's leading offshore financial centres
32:International Business Companies Act, 1984
208:
434:
159:on 15 August 1984 where Chief Minister
644:Economy of the British Virgin Islands
360:by supra-national bodies such as the
42:which permitted the incorporation of
7:
669:1984 in the British Virgin Islands
659:British Virgin Islands company law
14:
654:Law of the British Virgin Islands
374:most British Virgin Islands taxes
44:International Business Companies
416:Video: The Story of the IBC Act
1:
504:St Vincent and the Grenadines
575:. Part III, paragraph 1.3.
685:
390:BVI Business Companies Act
55:offshore financial centres
627:registered under the Act.
219:
216:
498:27 February 2007 at the
394:constitutional documents
479:6 December 2006 at the
79:Shearman & Sterling
366:unfair tax competition
211:Incorporations of IBCs
40:British Virgin Islands
27:
175:and arrested General
152:to the jurisdiction.
21:
421:9 March 2019 at the
69:; Neville Westwood,
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625:security interests
543:Companies Act 1985
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181:offshore companies
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138:corporate benefit
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649:Offshore finance
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71:Michael Riegels
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177:Manuel Noriega
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527:. 2 May 2014.
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460:. 2 May 2014.
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586:. Retrieved
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161:Cyril Romney
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116:incorporated
98:
83:
64:
52:
47:
31:
29:
22:Partners at
15:
664:1984 in law
485:The Bahamas
370:ring fenced
157:legislature
133:ultra vires
94:microstates
638:Categories
541:under the
524:Legal Week
457:Legal Week
386:stamp duty
382:income tax
358:tax havens
125:stamp duty
101:common law
429:Footnotes
197:In 2000,
192:Hong Kong
112:companies
61:Enactment
588:8 August
496:Archived
477:Archived
472:Anguilla
419:Archived
142:domicile
121:taxation
105:Delaware
340:60,000
332:40,000
324:30,000
316:31,000
308:27,000
300:19,000
292:15,000
284:14,000
75:Harneys
38:of the
36:statute
24:Harneys
579:
491:Belize
352:Repeal
276:9,500
268:7,000
260:2,000
252:1,700
244:1,700
236:1,500
228:1,000
173:Panama
167:Growth
146:merger
34:was a
590:2014
577:ISBN
573:HMSO
489:and
384:and
362:OECD
337:1997
329:1996
321:1995
313:1994
305:1993
297:1992
289:1991
281:1990
273:1989
265:1988
257:1987
249:1986
241:1986
233:1985
225:1984
217:Year
199:KPMG
123:and
30:The
96:".
50:".
640::
571:.
521:.
483:,
454:.
396:.
127:.
57:.
592:.
545:.
92:"
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