Offshore is a definition for any business activities that take place outside an entity’s home country. These business activities offshore can lead to tax benefits, asset protection, and greater growth potential.
The most popular ones are the British Virgin Islands (BVI), and the Cayman Islands. Allow me to shortly introduce these two islands.
Both are considered British Overseas Territory. Each jurisdiction has its own set of laws. There are quite a few similarities and differences between those two islands.
- Both countries do not adopt corporate tax , inheritance tax, capital gains or VAT.
- You require offshore banks or EMI alternatives, because of strict control over business banking over there.
- The minimum number of directors and shareholders is one, they could be the same person. There is no requirement that they should be a resident of that country.
- No capitalization requirements for your business.
- Simple and effective registration system.
- Confidentiality of owner’s and shareholders’ information.
- Agreements avoid double taxation in many jurisdictions and territories.
According to the BVI company registry, in September 2021, there was a total of 372,911 Business Companies on the Register. This makes the country one of the leaders in company incorporation around the globe.
- The incorporation costs are a lot cheaper in the BVI compared to the Cayman Islands.
- The regulatory framework is the second difference between BVI and Cayman Islands. Although both countries require companies to audit their investment funds, BVI does not require companies to follow local audits while the Cayman Islands requires companies engaged in funds to be audited on a local level.
- BVI has stricter laws regarding protecting the information of shareholders and the board of directors.
- The process of incorporating a company is faster in BVI.
- The Cayman Islands has an edge in terms of industry perception.
- The maturity of the jurisdiction in the Cayman Islands is such that you are guaranteed to find the skill and know-how for most financial business operations.
Both islands can offer benefits depending on your company structure. Weighing your needs against the respective points above, one can derive which of these islands is best suited for their company. In general, the BVI offers more to companies and for the Cayman Islands, there are opportunities for businesses operating in specific branches or with certain requirements. This, in combination with the lower costs and not having to follow local audits in the BVI, might just give it the edge over the Cayman Islands in most situations.
As you have read, business opportunities offshore are in abundance. DBi, Doing Business International, has a broad network in the Cayman Islands and the British Virgin Islands. We could assist you in incorporating a business in one of these countries. We also provide business-tailored legal advice and optimized tax structures.
Contact our advisory team by clicking the link: https://www.doing-business-international.com/contact/