To make it easier for companies looking to make Singapore their home, the country has ensured that IP and copyright laws are sound and in synergy with global IP protection laws. In fact, the World Intellectual Property Office was so impressed with Singapore’s reliable IP environment that it decided to establish its first Asian regional office here in 2009. In Singapore, there are more than 123 commercial banks, 154 fund managers and 291 licensees for capital market services. Therefore, the availability of funds, especially if you have an idea that surpasses the world, is never a problem. Singapore has an extensive network of double taxation agreements with more than 50 countries. These agreements are intended to ensure that economic transactions between Singapore and the contracting country are not subject to double taxation.
The British Virgin Islands have a good track record when it comes to the confidentiality of business information. There are currently no requirements for a company’s beneficial owner to go public; however, the registered agent with whom an IBC is registered must have access to that information. Nominated directors and nominated shareholders can also be used as an additional layer of privacy for the beneficial owner, as long as there are documents that reflect the true owner of the company, such as a statement of confidence. There is currently no formal legislation regulating data protection in the British Virgin Islands, but the Government of the British Virgin Islands has committed to establishing adequate data protection legislation in the near future. For the time being, the collection, storage and transfer of personal data is governed by the general principle of confidentiality applied in customary law. This means that there are no requirements for the British Virgin Islands for a company to register with a data protection authority, appoint a data protection officer or maintain formal security measures.
Special purpose acquisition companies as an alternative to traditional IPOs have been a key feature of financial markets since 2020. Securities and Exchange Commission concerns about forward-looking statements and the accounting treatment of warrants, SPAs remain an important proposition for investors, venture capital firms and private equity funds looking to efficiently deploy capital and improve their portfolios in a low interest rate and market volatility. At the same time, all detailed information on the property rights of the shareholders and beneficial owners of the company is kept by the registered agent. Under the Anti-Money Laundering Act, registered agents are required to properly maintain KYC information about the identities of beneficial owners, shareholders and directors. This important peculiarity means that the British Virgin Islands are under no obligation to disclose or share information about companies’ revenues, profits or other transactions, or information about the directors, shareholders or beneficial owners of commercial entities with foreign governments. Starting a business in the British Virgin Islands means using the state’s legal system based on English customary law.
Companies in the British Virgin Islands are extremely flexible in their structure and management, and there are few prescriptive legal requirements. Ultimately, a trading company in the British Virgin Islands will be more flexible in its operation, especially if the company needs to raise capital funding for working capital purposes. In addition, there are absolutely no requirements for a variety of procedures and restrictions to which most companies are normally subject. For example, there are no requirements for a company secretary, no residency requirements for directors, no requirements regarding the frequency or location of meetings of directors or shareholders, no requirements for audited financial statements, and no annual filings are required. This ensures that the usual costs required for a business to function properly and function properly are much lower within the British Virgin Islands.
While business enterprises normally pay tax in the usual way in countries where they do business, using a company in the British Virgin Islands as an intermediate holding company can create tax-neutral layers in the corporate holding structure. Offshore companies do not have to hold annual meetings of shareholders and boards of directors. In addition, entrusting a company secretary offshore ensures that the day-to-day operations of the company do not conflict with the local laws where his business is operated.
Accordingly, such mutual funds are subject to the registration, due diligence and reporting requirements of the regimes. The business of a private investment fund constitutes a “relevant company” for the purposes of the British Virgin Islands Anti-Money Laundering Regulations, and as a result, private investment funds are subject to the British Virgin Islands anti-money laundering regime. In addition to the requirements for onboarding investors who know their client from the regime, a private investment fund must also appoint a suitably qualified money laundering reporter. The British Virgin Islands is a viable and popular jurisdiction worth considering for the formation of offshore companies and passive business operations or for investment holding purposes, due to its ease of configuration, territorial tax system and variety of structures.
As the SEIS and EIS systems can offer significant tax exemptions to certain investors and have led to the creation of funds that only invest in companies eligible for SEIS and EIS, the benefits of the scheme should not be overlooked. Investors are attracted to the British Virgin Islands because of its flexible and modern corporate regime, fiscal neutrality, respected legal system, political stability and effective regulatory framework. The British Virgin Islands provide a neutral and secure platform for attracting and gaining access to capital, which is recognised by major international investors and banks. By way of exception, the company law of the British Virgin Islands is based on the law of Delaware, which is anglicized to recognize that the British Virgin Islands is a common law jurisdiction. This means that investors on both sides of the Atlantic are equally comfortable using companies in the British Virgin Islands. To date, more than a million companies have formed in the British Virgin Islands and we are seeing a trend in start-ups in the British Virgin Islands joining the British Virgin Islands.
BVI BCs may not own any property in the British Virgin Islands, other than the rental of an office, and may not engage in banking or fiduciary activities or insurance or reinsurance activities. Otherwise, BVI BC may engage in any activity that is not illegal under the laws of the BVI, subject to restrictions in your Memorandum of Association. In addition, another aspect of the regulations and business requirements minimized by inclusion in the British Virgin Islands is the capitalization requirements that are often imposed on companies. Companies in the British Virgin Islands are not required to act in accordance with the rules of thin capitalization or external capital maintenance requirements to which most other companies would normally be subject. As long as the company is able to maintain cash flow and balance sheet solvency, the aforementioned distribution of assets, especially in the form of dividends, and share buybacks for shareholders will be an even simpler process. Companies incorporated in the British Virgin Islands are not subject to income tax, corporation tax, capital gains tax, wealth tax or any other similar financial obligation.
In addition, there are no requirements to disclose financial statements, audit reports or annual meetings. Commercial companies must have a registered office and an agent in the British Virgin Islands. Each BC must have at least one director and one shareholder; no local secretary or set up company BVI permanent address is needed. For investors buying units in a SPAC, investing is a gamble on the ability of the experienced and often high-profile management team to quickly identify and complete attractive investment opportunities, known as “business combinations,” after the IPO.