As the founder of a startup company, one of the first questions you need to consider is “where should I incorporate my company?”

Companies incorporated in the BVI are, by most measures, the most popular offshore holding structure in the world. Whilst offshore vehicles are used for a wide variety of different purposes globally, there are a number of common factors which feed into the success of the BVI product. Whilst the most popular BVI vehicles are companies, BVI trusts and partnerships are also increasing in popularity. Investors are drawn to the British Virgin Islands (BVI) for its flexible and modern corporate regime, tax neutrality, respected legal system, political stability and effective regulatory framework. The BVI provides a neutral and safe platform to pool and access capital, which is recognised by leading international investors and banks. Uniquely, BVI company law is based on Delaware law that has been anglicised to recognise that the BVI is a common law jurisdiction. This means investors from both sides of the Atlantic are equally comfortable using BVI companies. To date, more than one million companies have been formed in the BVI and we see a trend in BVI startup companies incorporating in the BVI.

BVI companies are listed on the World’s leading international stock exchanges. They are recognised as efficient, tax neutral vehicles, for use accessing international capital in financial centres from London and New York to Singapore and Hong Kong. As venture capital investors will be looking for exit options when they invest in a startup, having a vehicle which is suitable for floatation will be an important consideration from a corporate structuring perspective. This also provides an effective route for the founders to continue a successful startup following an exit by the investors. In addition, for startups with a permanent establishment in the UK, a BVI incorporated company can still qualify for the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS). As the SEIS and EIS schemes can provide certain investors with significant tax breaks and has led to the establishment of funds which only invest in SEIS and EIS eligible companies, the benefits of the scheme are not to be overlooked.

There is currently no formal legislation regulating data protection in the BVI, however the BVI Government has pledged to enact suitable data protection legislation in the near future. For now, the collection, storage and transfer of personal data is governed by the general principle of confidentiality applied at common law. This means there are no BVI requirements for a company to register with a data protection authority, appoint a data protection officer or maintain formal security measures. Although all of these considerations will be important for a startup to gain trust with consumers, it means the founders would be free to structure their own internal policies as required and appropriate.

Neither the register of directors nor the share register of a company is required to be publicly filed in the BVI. Although safeguards exist to prevent abuse of corporate confidentiality in relation to money laundering and international crime, law abiding companies can exist with the confidence of privacy.

Company law in the BVI is designed to provide the maximum flexibility consistent with common law legal systems. Companies are permitted to undertake any lawful act or activity, and there are no strictures relating to corporate benefit.

Trust law has been heavily modified in the BVI to remove un-commercial common law provisions. New and innovative products, such as VISTA trusts and private trust companies have driven the popularity of trusts, combined with rules refining restrictions to applicable non-charitable purpose trusts and rules against remoteness of vesting.

Offshore structuring will always be driven by relevant considerations of the underlying transaction or structure. No offshore structure can be all things to all people, but the dominance of the BVI product in the market suggests that BVI structures can seemingly be most things to most people. Owing to its corporate advantages, the BVI company has evolved as a highly proficient facilitator for the global flow of finance.