Originally published in IFC Caribbean Review 2012, pages 34-35.
ACCORDING TO THE LATEST STATISTICS released by the BVI Financial Services Commission, incorporation levels for BVI companies are now back to the levels seen before the global financial crisis. Perhaps unsurprisingly, volumes continue to be driven in large part by the BRIC economies, with Russia and CIS-based clients being a key reason for this success.
Historically, the popularity of the BVI with Russian clients was due to the double taxation treaties in place between Cyprus and many of the ex-Soviet states (Russia and Ukraine being the most prominent), where BVI companies formed part of so-called ‘sandwich structures’ (with the Russian asset at the bottom, which asset is wholly owned by a Cypriot holding company, which, in turn, is wholly owned by a BVI business company). Regular exposure to BVI companies as a result of these structures has also seen clients in Russia using BVI companies independently of Cypriot vehicles, often where taxation benefits are not the primary objective and where, for example, they wish to take advantage of the more straightforward company law regime in place in the BVI, as well as the additional layers of confidentiality in place for BVI companies (where the registers of directors and shareholders are not in the public domain, whereas they are in Cyprus).
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