The British Virgin Islands (BVI) is a British dependency and is politically stable, and the security of BVI companies is very high, such as the company's register of directors and shareholders, which are usually not public.
Unless a search warrant or director's authorization is issued by the local Supreme Court or the International Organization for Economic Co-operation and Development, third parties will not be able to obtain information about the company. Therefore, many entrepreneurs will choose this place as a place for their business to settle down.
However, while BVI companies are more lenient and suitable for most people to register their businesses here, there are two things to take seriously and remember not to make mistakes: annual audits and tax returns.
NO.1, BVI company annual review
Generally speaking, a BVI company incorporated on or before June of the current year should renew its annual examination and pay the relevant fees before May 31 of each year to ensure its legal status and recognition.
For BVI companies incorporated between July and December, there is a postponement of the annual examination and payment of fees before 30 November each year.
If a BVI company fails to pay its fees on time, the BVI company will lose its status in good standing and may be struck off by the Registrar for non-payment of fees.
Deregistration means that your BVI company cannot continue to trade or enter into new commercial agreements, and its directors, shareholders and managers are legally prohibited from carrying out any operations or transactions with the company's assets.
In addition, a 10% penalty will be charged for 2 months and 50% for more than 2 months.
Additional notes on penalties due to overdue:
If the company is established between January and June, it must undergo the annual examination before May 31:
From June 1 to July 31, a penalty of 10% of the annual examination fee will be added;
In the annual examination from August 1 to October 31, a penalty of 50% of the annual examination fee will be added;
On or after 1 November, the company will be struck off.
Companies established between July and December must be reviewed annually by November 30:
From December 1 to January 31, the annual examination fee will be increased by 10%;
From February 1 to April 30, the annual examination fee will be increased by 50%;
On or after May 1, the company will be struck off.
NO.2. Taxation of BVI companies
It is important to note that BVI companies are only exempt from a part of the tax, not not exempt from paying tax, which is divided into operating locally and not operating locally.
That is, BVI companies are only exempt from BVI local taxes, but BVI companies should pay their profits in other countries or regions according to local tax policies.
According to the provisions of China's tax law, the income of a foreign company in China is taxable, and if there is no permanent establishment in China, it will be paid by the domestic payer.
The specific situation is divided into:
BVI companies do not operate in the BVI
BVI companies do not operate locally, but operate international trade offshore and do not need to pay any taxes;
The tax of a BVI company only needs to be audited annually, but it does not need to be declared, in simple terms, the company can control its own financial operations and does not need to tell the government administration;
BVI offshore companies are only required to pay a license fee once a year.
BVI companies operate in the BVI
BVI local companies are required to pay corporate tax with a net profit of 15% and pay housing tax, land tax, customs duties and some stamp duty, property tax;
Individuals employed in BVI businesses are subject to individual income tax at a rate of 0-20%, and if they have other sources of income, they are still required to file individual income tax returns.
In conclusion, there are no corporate tax issues for BVI offshore companies if they do not operate in the BVI region. Therefore, this is also the reason why registering a BVI offshore company is very popular.