BVI Assembly Passes New Business Companies Act
The Legislative Council of the British Virgin Islands has passed the Business
Companies Bill, a new piece of legislation that will result in an end to separate
local and offshore tax regimes.
The new bill, described by Chief Minister Orlando Smith as a “modern,
sophisticated and innovative” piece of legislation, comes as a result
of international pressure on the jurisdiction to ensure compliance with the
European Union (EU) Savings Tax Directive and EU Code of Conduct on Business
Taxation, as required by the United Kingdom of all its Overseas Territories. The legislation replaces the current International Business Companies Act -
a model copied successfully in other jurisdictions - and effectively means an
end to the distinction between offshore and local firms, as all businesses will
benefit from a 0% income tax regime. However, the success of the initial IBC Act, first passed twenty years ago,
has led some to question why it needs replacing at all. “The IBC Act has worked well,” admitted the Chief Minister in
the Legislative Assembly. Nevertheless, Smith went on to explain that change was necessary in the
light of international developments. “By drafting new legislation that builds on the very solid foundations
laid by the IBC Act, the Territory is once again positioning itself ahead of
the game, while ensuring that its financial sector related programmes are fully
compliant with international standards.” Since its inception twenty years ago, the IBC Act has resulted in the incorporation
of over 600,000 IBCs in the BVI. A comprehensive report in our Intelligence Report series detailing the changes taking place in offshore jurisdictions in response to pressure from the OECD, the EU and the FATF is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report1.asp
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