BVI

British Virgin Islands PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in the British Virgin Islands to companies willing to enter the British Virgin Islands market or hire local/expat employees in this country.

The traditional approach requires establishing a subsidiary in the British Virgin Islands.  However, our solution allows you to start the operations in the British Virgin Islands within days hence save time and money.  WeHG would hire employees on your behalf when you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf.

British Virgin Islands fast facts

Population, million: 32
Land area:  153 km²
Capital: Road‌ ‌Town
Local currency: United States dollar (US$) (USD)

GDP per capita:$ 34,200
GDP in currency:$ 500 

British Virgin Islands, British overseas territory in the eastern Caribbean Sea. It is part of an island chain collectively known as the Virgin Islands, which makes up the northeastern extremity of the Greater Antilles. Puerto Rico lies to the west. The British territory consists of 4 larger islands (Tortola, Anegada, Virgin Gorda, and Jost Van Dyke) and 32 smaller islands and islets, of which more than 20 are uninhabited; lesser islands include Great Tobago, Salt, Peter, Cooper, Norman, Guana, Beef, Great Thatch, Little Thatch, and Marina Cay. The chief town and port is Road Town on Tortola (21 square miles [54 square km]), the largest of the islands. The total area of the colony is 59 square miles (153 square km). Pop. (2010) 28,054.

Hiring, Negotiating and Doing Business in British Virgin Islands

Necessity of written employment contract

The employment contract determines the relationship between the employer and the employee. However, whether there is an employment contract or a contract for services (i.e., with an independent contractor) depends on several factors, which include the degree of control that would be exercised over the worker. The employment contract need not be in writing and may be oral, but this is subject to any specific requirement of any other law, for example, the employment of a merchant seaman must be in writing, and also an employment contract for an apprentice must at common law be in writing.

Different forms of engagement: employment, contracting, work with private entrepreneur

Companies are incorporated in the British Virgin Islands (BVI) under the BVI Business Companies Act, 2004 (the Act) by the filing of Memorandum and Articles of Association with the Registrar of Corporate Affairs. This filing is made by the first registered agent of the Company (the Registered Agent) which each BVI company must have and who must be located in the BVI.

The incorporation is effective from the date of filing the Memorandum and Articles of Association with the Registrar of Corporate Affairs. It generally then takes the Registrar of Corporate Affairs between three to five days to allocate a company number to the company, issue a Certificate of Incorporation and return stamped Memorandum and Articles of Association via its electronic filing system, VIRRGIN.

There is no BVI law concept of subscriber shares and as such, unlike the position under English law, at the time of incorporation of the company by the Registered Agent there will be no subscriber shares in issue. Similarly, unlike the position under the English law, a BVI company on incorporation does not have any first directors.

The Registered Agent will appoint the company’s first director(s) and company secretary, if one is required, although there is no legal requirement for a BVI company to have a company secretary. A BVI company must have at least one director at all times following the appointment of its first director(s), and it can have either individual or corporate directors. There is also no residency requirement for directors.

Once directors have been appointed, they will be able issue shares to the shareholders.

There is no concept of authorised share capital as a matter of BVI law (the only similar limitation is that the memorandum of the company will provide that it is only authorised to issue a certain number of shares, although this may be an unlimited number), and so there are no minimum share capital requirements. A company can be authorised to issue shares with or without par value. Shares issued with par value can be issued in any currency.

The consideration paid for the shares issued may be in any form, including money, a promissory note, or other written obligation to contribute money or property, real property or personal property, services rendered or a contract for future services. A relevant BVI law consideration for the issue of shares is that where a company is authorised to issue shares with par value, the consideration paid must be at least equal to the par value of the shares. Where a share is issued for consideration with a value less than its par value, the person to whom the share is issued is liable to pay the difference between the issue price and the par value to the company.

British Virgin Islands Employment Contract

Types of employment agreements

An employer and employee may enter into an individual employment contract, either written or oral, which specifies conditions of employment, but any provision which:

  • establishes conditions which fall below the minimum employment standards established by the Code;
  • requires that the employee refrain from associating with other employees or with a trade union for collective bargaining purposes, is void.

Subject to any applicable work permit, where an employment contract for a fixed term is renewed on one or more occasions so that the total period involved is twelve months or more, such contract shall, for the purposes of the Code, be deemed to be for an indefinite period.

Fixed-term employment contract is renewed in such a way as to evade the provisions of the Code, the Tribunal shall subject to any applicable work permit, determine such contract to be for an indefinite period.

It shall be lawful for an employer, or group of employers, to enter into a written collective agreement with two or more employees or their representatives, and the collective agreement shall:

  • be signed by the parties to the agreement
  • be for a period of not less than three years and
    not more than five years.

A copy of a collective agreement reached under subsection shall be lodged in the prescribed manner with the Commissioner within seven days of being signed by the parties, for registration, as a collective agreement, and the collective agreement shall, upon being so registered, be binding on the parties.

British Virgin Islands working hours

The normal work day is eight hours and the standard work week forty hours.  Your employees must be given a lunch break of at least one hour per day and rest periods of at least one full day each week.

Overtime

An employee who works in excess of 40 hours a week may be entitled to overtime.    Overtime should not exceed twelve hours in any one day, or sixty hours in a calendar week. 

In exceptional situations such as where an accident has occurred, special circumstances have arisen, or to prevent loss of perishable goods, the minister may approve excess overtime.   If the urgency of the case makes an advance request impracticable, the employer will not be held to have contravened the requirement for advance approval from the Minister.

Vacation leave in British Virgin Islands

You can determine your employee’s leave benefits but these cannot be less favourable than what is provided in the Labour Code. 

The vacation leave entitlement provided in the Code is based on the individual’s length of employment with the business.  Employees with less than ten years are entitled to at least 12 vacation days a year.  Employees with more than ten but less than 20 years are entitled to at least vacation 15 days and persons employed with the company for over 20 years are entitled to no less than 20 vacation days a year.  

If an employee’s service is terminated he must be paid for any earned but untaken vacation days.

Vacation leave is awarded in addition to public holidays and sick leave.

British Virgin Islands Maternity Leave

A female employee who has been with the company for more than a year is entitled to 13 weeks maternity leave.  Salary while on maternity leave is paid by the Social Security office (provided that she has submitted a claim and has made the required number of contributions to qualify).   The employee cannot be terminated during this period.  Her spouse is entitled to one month paternity leave without pay.

British Virgin Islands Severance Laws

  • Termination Process

The default is 2 months, but can be changed to the employers liking.

  • Notice Period

Employee must provide 15 days written notice.

  • Severance Pay

Severance pay is counted at the rate of one week’s wages for each year the employee has worked for the company. The employee also receives vacation payment which is 30 days for each 11 consecutive months worked. Additionally they receive the 13th month payment.

British Virgin Islands Tax

Individuals in the BVI pay no income tax, land or housing taxes. There is no capital gains tax, wealth tax, inheritance or gift taxes, sales tax or VAT. Stamp duty is payable on some transactions and there is a payroll tax of between 10% and14%, split between employer and employee.

Health Insurance Benefits in British Virgin Islands

Sick leave entitlement is 12 paid days per year for an employee who has been on the job for at least four months.  Sick leave in excess of the 12 days is paid by the Social Security office from accrued benefits (provided that the individual submits a claim, has made the required number of contributions to qualify and the leave is for four or more continuous days).   

An employer does not have to pay for sick leave taken by a person employed for less than four months.   The employee may however be able to claim social security sickness benefits for sick leave for four or more continuous days if he has made sufficient qualifying contributions in previous employment including contributions for at least eight of the thirteen weeks preceding his claim for benefit.

Additional Benefits in British Virgin Islands

Old-age pension: 30% of the insured’s average annual covered earnings plus 1% of average annual covered earnings for every 50-week period of contributions exceeding 500 weeks is paid.

Average annual covered earnings are the sum of the insured’s earnings in the best 11 years in the last 15 years of contributions (or the total years of contributions, if less) before retirement divided by 11.

Retirement is not necessary.

The maximum annual earnings used to calculate benefits are $40,716.00.

The minimum monthly old-age pension is $260.

The maximum annual old-age pension is 60% of the insured’s average annual covered earnings.

The insured may receive the old-age pension and the survivor pension at the same time. The total amount received is 100% of the old-age pension plus 50% of the survivor pension, up to 100% of the insured’s insurable earnings.

Disability pension: 30% of the insured’s average annual covered earnings plus 1% of average annual covered earnings for every 50-week period of contributions exceeding 500 weeks is paid.

Average annual covered earnings are the sum of the insured’s earnings in the best 11 years in the last 15 years of contributions (or the total years of contributions, if less) before retirement divided by 11.

The maximum annual earnings used to calculate benefits are $40,716.00.

The minimum monthly disability pension is $260.

The maximum annual disability pension is 60% of the insured’s average annual covered earnings.

The insured may receive the disability pension and the survivor pension at the same time. The total amount received is 100% of the disability pension plus 50% of the survivor pension, up to 100% of the insured’s insurable earnings.

General market practice benefits/additional allowances

Many of the BVI’s advantages are common to numerous other jurisdictions (English language, absence of currency exchange controls, US dollar as a currency, stable democracy, common law legal system with final appeal to the Privy Council in London), a number of other advantages are not.

Corporate flexibility. Modern, flexible and commercially minded BVI corporate legislation (with certain provisions cherry-picked from Delaware, Ontario, Australia, and English corporate legislation) ensures that corporate transactions proceed with maximised efficiency, consistent with common law legal systems.

Corporate efficiency. BVI Companies ordinarily enjoy broad corporate capacity; they can undertake any lawful act or activity, and there are no restrictions relating to corporate benefit nor are they limited by financial assistance restrictions. Efficient procedures apply for authorisation of corporate activity – the vast majority of corporate activity can be approved by the directors without the need for a shareholders’ resolution.

Minimal capitalisation requirements. BVI Companies are not subject to “thin capitalisation” rules or any capital maintenance requirements. Provided a company maintains cash-flow and balance sheet solvency, the distribution of assets to shareholders or redemption of shares is a straightforward process. A BVI company is expressly empowered to provide financial assistance to a third party for the acquisition of its own shares.

Tax neutrality. The BVI has no income tax, corporation tax, capital gains tax, wealth tax or similar fiscal laws. While trading companies will normally pay taxes in the usual way in countries where they engage in business, using a BVI company as an intermediary holding company can create tax neutral layers in the corporate holding structure.

Low cost. BVI companies are still inexpensive compared to other premium jurisdictions such as Cayman and Bermuda. A vanilla BVI company can normally be incorporated for around US$1,400 inclusive of disbursements and annual government fees are around US$450.

Fast company formation. A BVI company can be formed on a same day basis at a competitive price that is still relatively inexpensive compared to other premium offshore jurisdictions. The BVI’s anti-money laundering (AML) laws do mandate that customer due diligence (in line with the FATF Recommendations) be obtained on directors, shareholders and ultimate beneficial owners of a BVI company; the practical speed of forming a BVI company will mostly be linked to the client’s ability to satisfy customer due diligence requirements.

British Virgin Islands Holidays

The government issues a list of public holidays each year which are observed territory wide.   If your business requires employees to work on a public holiday they must be paid a wage of at least one and one half times their basic rate.  Employees who are not required to work must be paid their ordinary basic wage for that day, provided that he was at work immediately before and after the public holiday and the public holiday did not fall on one of his scheduled workdays.

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.

FAQ BVI

  • Working hours in BVI

    The normal work day is eight hours and the standard work week forty hours.  Your employees must be given a lunch break of at least one hour per day and rest periods of at least one full day each week.

  • What are the main holidays in BVI?

    • New Year’s Day
      Anniversary of the Birth of Hamilton Lavity Stoutt
      Commonwealth Day
      Good Friday
      Easter Monday
      Whit Monday
      Sovereign’s Birthday
      Territory Day
      Festival Monday
      Festival Tuesday
      Festival Wednesday
      St. Ursula’s Day
      Christmas Day
      Boxing Day
  • What are payroll taxes in BVI?

    Individuals in the BVI pay no income tax, land or housing taxes. There is no capital gains tax, wealth tax, inheritance or gift taxes, sales tax or VAT. Stamp duty is payable on some transactions and there is a payroll tax of between 10% and14%, split between employer and employee.

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