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British Virgin Islands / Profile


Location and infrastructure

The Virgin Islands, commonly known as the British Virgin Islands (BVI), is an English-speaking Dependent Territory of the United Kingdom, located in the Caribbean to the east of Puerto Rico. The islands make up part of the Virgin Islands archipelago, the remaining islands constitute the US Virgin Islands and the Spanish Virgin Islands.

The official name of the Territory is still simply the "Virgin Islands", but the prefix "British" is often used to distinguish it from the neighboring American territory which changed its name from the "Danish West Indies" to "Virgin Islands of the United States" in 1917.


The British Virgin Islands has a population of approximately 31,150 (2012 est).  It consists of a mixture of British, Spanish, Dutch, Amerindian and Caribbean racial types.


The primary language is English, although there is a local dialect. Spanish is spoken by Puerto Rican and Dominican immigrants.


The local currency is the United States Dollars (USD).

Tax system


Corporation Tax Rate(s):  0%

Ordinary Tax Losses:  N/A – The BVI do not levy corporation tax

Capital Gains Tax Rate(s): 0%

Capital Losses: Not tax-deductible since capital gains are not taxable

Stamp Duty: Yes

Capital Duty: No


Payroll Tax

Payroll tax is imposed on every employer and self-employed person who carries on business in the BVI. The tax rates are 10% for Class 1 employers and 14% for Class 2 employers. The tax is applied to the remuneration paid or deemed to be paid, 8% of which may be reclaimed and paid by the employees or deemed employees. Class 1 employers are those meeting the following conditions:

  • Payroll during the financial year that does not exceed US$150,000
  • Annual turnover that does not exceed US$300,000
  • A total of seven or less employees and deemed employees

All employers not falling within the Class 1 category are deemed to be Class 2 employers.

The first US$10,000 of actual remuneration paid to an employee, deemed employee or self-employed person is exempt from tax.

Nature of fees and duties


Annual license fees

Business Companies incorporated under the BVI BC Act, with authorized share capital of

Up to US$50,000 or foreign-currency equivalent or authorized to issue up to 50,000 shares


Exceeding US$50,000 or foreign-currency equivalent or authorized to issue more than 50,000 shares


Restricted Purpose Company


General banking license


Restricted Class I banking license


Restricted Class II banking license


Insurance company license

Up to US$10,000

Class I trust license

US $8,000

Class II trust license

US $7,000

Class III trust license

US $6,000

Restricted trust license

US $500

Stamp duties, on various instruments and transfers of ownership

Real estate, on higher of consideration or market value

Sales to belongers (individuals born in the BVI or those granted BVI status and BVI companies

that are at least 67% owned by such persons and do not have any non-belongers as directors)


Sales to nonbelongers


Other instruments and transfers

0.2% to 5%


Double tax treaties

The BVI is a typical non-treaty offshore jurisdiction with zero corporation and income taxes, so there is not much amounts to reduce and consequently less interest to other countries to conclude a double tax avoidance treaty. It can be assumed that the concept of double taxation does not apply in the BVI because of total exemption from taxes. However, BVI is a party to two very old double tax agreements with Japan and Switzerland, which were applied to the BVI through the provisions of two UK treaties. These UK treaties have already been superseded but the old agreements technically remain in force. Actually, these treaties are not used.

However, the BVI has entered into tax information exchange agreements with the United States and with 22 European countries including France, Ireland, Italy, the Netherlands and the United Kingdom.

The jurisdiction was placed on the OECD's 'white list' in July, 2009.

Legal system

The BVI has an independent legal and judicial system based on English Common Law, with a right of final appeal to the Privy Council in London. While the legal system is primarily based on that of the Great Britain, all domestic matters are legislated locally, by the Legislative Council. This includes taxation, company laws, banking, insurance and commercial regulations, etc. Laws and regulations are often developed in consultation with the private sector.


BVI has a strong and dynamic banking sector, with modern international banking services available. The most prominent commercial banks operating in the British Virgin Islands are the First Caribbean International Bank, FirstBank BVI and VP Bank (BVI). The First Caribbean International Bank is particularly specialised in international banking and offshore banking services for International Business Companies. The FCIB, in particular, also offers internet banking facilities and international credit cards among other standard banking services.

April 2012 saw the introduction of the International Bank Account Numbers (IBAN), unique codes assigned to bank accounts to standardise and simplify the international money transfer process. 

Banks are regulated under the Banks and Trust Companies Act 1990, and supervised by the Banking and Fiduciary Division of the Financial Services Commission. 

Types of companies

British Virgin Islands Company Limited by Guarantee

British Virgin Islands Hybrid 'Cap 285' Company

British Virgin Islands Public Company

British Virgin Islands International Business Company

British Virgin Islands Limited Partnership

British Virgin Islands Trusts 

Changes to the tax laws and other applicable rules in various countries covered by this publication may be proposed. Therefore, readers should contact local specialized firms to obtain further information.