The British Virgin Islands passes new legislation restricting Bearer Shares in Offshore Companies

In response to increased pressure from OECD (Organisation for Economic Co-Operation and Development) and, in particular, its FATF (Financial Action Task Force), the British Virgin Islands has passed new legislation which places new limits on the use of bearer shares and the identity of Directors in the countries popular offshore vehicle – the International Business Company (IBC.)

For immediate release

Tappan, New York, May 9, 2003 – Perhaps the most common offshore vehicle in the world, IBCs formed in the BVI are not required to file any annual accounting nor pay any tax other than the annual registration fee (normally $300 USD.) Of course, the owners of the company may be required to pay tax to their home jurisdiction, such as US taxpayers under the Controlled Foreign Corporation provisions of the US Internal Revenue Code.

All offshore jurisdictions were subject to increasing scrutiny by the OECD Member Countries prior to and intensifying in the wake of 9/11. Confidentiality provisions, particularly the use of bearer shares, were strongly criticized as enabling money laundering and tax evasion.

The recent changes require all new or existing IBCs with bearer shares to amend their formation documents to eliminate bearer shares or to Immobilise" their bearer shares by requiring their deposit (and disclosure of the identities of the owners) with specific institutions such as certain banks and Trust companies. Companies still permitting bearer shares will also face increased annual fee (to $1,000 USD.)

IBCs will also be required to maintain a Register of Directors at the registered office although not subject to inspection by the public. The effective dates of the legislation have not yet been determined.

About International Business Company Formation, Inc.
International Business Company Formation, Inc. (IBCF) is a New York-based corporate services company which assists legal professionals in forming companies and providing registered agent and other corporate services in the US and throughout the world. For more information on forming companies in the British Virgin Islands or elsewhere, see www.ibcf.com.

Media Contacts:
Adam Cannizzaro
1.888.664.6263; 845.398.0900
adam@ibcf.com