International Business Company’s ("IBC’s") are companies incorporated in the British Virgin Islands ("BVI") under the International Business Companies Act, 1984, but whose business is to be conducted outside the BVI, and which may not do business with any person resident in the BVI.

International Business Companies Act, 1984

IBC’s are a very popular and widely used offshore vehicle because of their administrative ease, flexibility, taxation exempt status and the fact that they are widely accepted and understood by the international financial community. IBC’s may not own real property in the BVI, other than the lease of an office, and may not carry on banking or trust business (unless licensed under the Banks and Trust Companies Act, 1990) or insurance or re-insurance business (unless licensed in the BVI to carry on that business). Otherwise, they may engage in any activity that is not illegal under the laws of the BVI subject to any restrictions in their Memorandum of Association.

Significant features and advantages of IBC’s are:

  1. Incorporation, Shareholders, Directors and Officers
    • they require only one director and one shareholder
    • they need not appoint a secretary or any other officer
    • shareholders, directors and officers can be individuals or corporations
    • same day name approval is available
    • they can be incorporated within 24 hours of the receipt of instructions with the incorporation documents being available the Companies Registry within a few days thereafter
    • shareholders, directors and officers can be of any nationality and residence
  2. Share Capital
    • share capital can be denominated in any currency and can be issued for consideration other than cash
    • shares may be issued to bearer
    • shares may be issued with or without par value
    • they can buy back or redeem their own shares from shareholders and hold them as treasury shares or cancel them altogether making them an ideal vehicle for mutual funds
  3. Meetings And Filing Requirements
    • there is no requirement to hold shareholders’ or directors’ meetings in the BVI
    • meetings can be held by telephone or other electronic means - there is no requirement to hold an annual general meeting
    • there is no requirement to file any return of shareholders, directors or officers
    • the only documents required to be filed at the Companies Registry are the Memorandum and Articles of Association which specify, inter alia, the location of the registered office and identity of the registered agent
    • there is no requirement to file changes of the shareholders, directors or officers with the Registrar of Companies
    • it is not compulsory to maintain registers of directors, officers or charges
  4. Administration
    • There are simple procedures for:
    • reduction and increase of authorised capital
    • liquidation of solvent companies
    • amendments to Memorandum and Articles
    • issuing and transferring shares
    • appointing and removing directors
    • they may act in a manner which brings no corporate benefit
    • they are easy to continue into and out of the BVI

    The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.