The British Virgin Islands (BVI) has long established itself as one of the most sought-after offshore jurisdictions for company registration. Entrepreneurs can benefit from flexible corporate structures, tax advantages, and a high level of confidentiality. However, before setting up a business in the BVI, it’s worth considering two options: registering a company from scratch or buying a ready-made one. In this article, we’ll discuss the pros and cons of both approaches and explain why buying a ready-made company might be the best choice for some business owners.
Buying a ready-made company in the BVI: key benefits
Purchasing a ready-made company often referred to as a ‘shelf company,’ means acquiring a legal entity that’s already been registered but hasn’t conducted any business yet. This can save you a significant amount of time and bring several advantages.
- One of the main benefits of buying a ready-made company is that you can start business operations immediately. While registering a new company in the BVI is relatively straightforward, it may still take a few days to collect and submit all the necessary documents. With a ready-made company, you skip this step, which allows you to hit the ground running.
- Company history. A ready-made company may have some years behind it, which can lend it extra credibility. For certain business deals or contracts, it is important that a company has been around for a while. Buying a company with a track record can make it easier to secure partnerships and attract investors.
- Easier access to banking services. Some banks require a company to have been in existence for a certain period before they’ll allow you to open a corporate account. A ready-made company that’s been registered for several years may have quicker access to banking services and credit lines.
- Pre-established corporate structure. A ready-made company already comes with a corporate structure, including statutory documents, a charter, and sometimes even appointed directors. This saves you from creating these documents from scratch and allows you to focus on business rather than administrative matters.
- Fewer administrative hurdles. Although registering a new company in the BVI is simple, it can involve certain formalities such as filing applications and paying registration fees. Many of these steps have already been taken care of when you buy a ready-made
Drawbacks of buying a ready-made company in the BVI
Despite all the advantages, buying a ready-made company comes with its own set of potential downsides that you should be aware of.
- Limited customization options. A ready-made company already has a set structure and charter, which might not fully align with your specific needs. Making changes to the company structure may require extra time and resources.
- Uncertainty about the company’s history. Although ready-made companies usually don’t engage in any business activities, there’s always a chance that it may have been involved in deals you’re not aware of. This could pose certain risks.
- Buying a ready-made company may be more expensive than registering a new one from scratch, especially if the company has an established history.
Steps in the process of buying a ready-made company in the BVI
- Choose the company. Find an agency that offers ready-made companies with the structure you need.
- Check the company. Investigate the company’s history to confirm it hasn’t engaged in any operations and it doesn’t have outstanding debts.
- Sign the agreement. Enter into an agreement with the agency to purchase the ready-made company.
- Pay the fees. Cover the agency’s service fees and the cost of the company.
- Update the documents. Make any necessary changes to the board of directors and list of shareholders.
- Update the registry. Confirm that all changes have been entered into the official BVI Companies Registry.
- Start business operations. Once the formalities are completed, you’re ready to start doing business.
Advantages of registering a new company in the BVI
Buying a ready-made company in the BVI is an attractive option in many ways. However, it’s also possible to create a new company by registering it in this jurisdiction. Let’s take a look at the benefits of registering a company from scratch in the BVI.
- Full control over the process. When registering a new company, you have complete control over every aspect of its creation. You can choose the directors, shareholders, draw up the charter, and determine the company’s structure in line with your business goals.
- Guaranteed ‘clean’ history. By creating a new company, you know for sure that it hasn’t had any prior financial or legal obligations. This gives you protection from any potential risks tied to the activities of previous owners.
- Flexibility in choosing the name and corporate structure. Registering a new company allows you to pick a unique name and set up the corporate structure exactly the way you want it. This is especially important if your business requires specific management conditions.
- Lower registration costs. The cost of registering a new company in the BVI is usually lower than purchasing a ready-made one with a history. This option is ideal for those looking to minimize initial expenses.
Disadvantages of registering a new company in the BVI
- While the process of registering a new company in the BVI is relatively quick, it can still take a few days or weeks. For those who want to start operations immediately, this might be an important issue.
- Administrative formalities. Registering a new company requires submitting all the necessary documents, hiring an agent, and paying the initial fees. This adds some administrative work to the process.
Comparing buying a ready-made company and registering a new company in the BVI
| Parameter | Buying a ready-made company | Registering a new company |
| Time to start | Immediate | A few days/weeks |
| Company history | Already has a few years | No history |
| Flexibility of structure | Limited (pre-set structure) | Full flexibility |
| Cost | Can be more expensive | Generally cheaper |
| Risk | Potential obligations | Full control, no history risks |
| Access to banking | Easier for older companies | New companies might face challenges |
Conclusion
Buying a ready-made company in the British Virgin Islands can be a great solution for those looking to start business operations quickly and take advantage of offshore laws. A ready-made company offers several benefits including a track record and easier access to banking services. However, if you’re looking for full control over the process and want to minimize risks, registering a new company might be a better option.
Whichever path you choose, the BVI remains one of the most appealing jurisdictions for international entrepreneurs, as it offers tax benefits, flexible corporate structures, and a high level of confidentiality.