New SVG IBC Act Gets Royal Assent

by Amanda Banks, for LawAndTax-News.com, London

04 March 2008

New International Business Companies legislation has received Royal Assent in St Vincent and the Grenadines, and is now the definitive law regarding IBCs in the jurisdiction.

The SVG International Business Companies (Amendment and Consolidation) Act 2007 received Royal Assent on February 22nd. Its main provisions include:

• No residency or nationality requirement for shareholders, officers and/or directors of SVG IBCs.
• Companies may be formed with as few as one shareholder who may be a natural person or a juridical entity.
• Companies may be formed with as few as one director, who may be a natural person or a juridical entity.
• No requirement for a company secretary.
• IBCs may own land in the jurisdiction, although foreigners may require an alien landholding licence.
• Exemption from taxation; under present regulations there are no personal income taxes, estate taxes, corporate income taxes or withholding taxes for SVG IBCs.
• Ability for IBCs to benefit from the Caricom Tax Treaty in return for payment of tax at 1% on annual profits.
• No requirement for the filing of annual reports or accounts with any government authority in SVG, expect for IBCs benefiting from Caricom tax treaties.
• Authorized share capital may be denominated in any recognised currency.
• No minimum capital requirement.
• Shares may be issued fully paid, partially paid, or nil paid.
• Company seal not mandatory.
• Identity of beneficial owners, shareholders and directors not required to be filed in any public record unless the directors elect to do so.
• Register of charges must be kept, but there is no requirement for this to be filed on public record.
• Provision for continuation of companies to and from anywhere around the globe, and for local companies incorporated to migrate to the IBC register.
• Streamlined procedures for Articles of Incorporation, mergers or consolidations with foreign corporations.
• Shelf companies available.
• Expedited incorporation process in as little as 24 hours subject to name availability and reservation.
• Trustees of shares of SVG IBCs held in an SVG trust enjoy similar status to trustees of VISTA trusts in the BVI. Trustees have an overriding duty to hold the shares and have no duty to oversee the management of the underlying company, unless so provided in the trust deed or the Articles and By Laws.

The 2007 IBC Act also makes provision for the incorporation of segregated cell companies where pre-incorporation clearance has been obtained from the International Financial Services Authority, the local regulator.

The Act, like similar legislation in other jurisdictions, provides that such companies may be approved by the regulator where they are formed to be used as a mutual fund or a captive insurance company. However the SVG Act goes further; approval may be given where the company is formed for any other purpose approved by the local regulator.

Under this last category, companies established for the purpose of owning, managing, and developing or investing in real estate (in any part of the world) will be approved for incorporation as segregated cell companies, provided certain strict criteria are met.

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