Malaysian companies and investors often establish BVI companies to leverage the offshore jurisdiction’s advantageous features. BVI’s legal framework, influenced by English common law, attracts Malaysian investors who are seeking asset protection and financial privacy. Malaysian businesses benefit from the political stability of the BVI as a British Overseas Territory and tax-friendly environment.
In this article, we will dive into the benefits of offshore company incorporation in BVI for Malaysian companies and investors.
Content Outline
Benefits of Company Incorporation in BVI
Tax Neutrality: BVI companies enjoy tax-neutral status. This means that BVI companies are generally not subject to capital, inheritance, corporate income or sales tax.
Confidentiality: From 1 January 2023, the BVI Registrar shall make available upon request public access to information about directors of BVI companies. However, it still preserves director privacy by not revealing DOB, address or former director information. It is not possible to carry out a search against a director’s name and the searches must be done against companies only.
Cost-Effective: Registering a company in the BVI is relatively lower than other offshore jurisdictions. Additionally, maintenance and renewal costs are less expensive.
Flexible Business Regulations: The BVI offers a flexible business regulatory environment. For instance, there’s no requirement for BVI companies to audit their annual returns.
Robust Legal System: The BVI legal system is based on English common law, which is recognized and respected globally.
Global Acceptance: BVI companies are widely recognized and accepted in global trade and finance.
Ease of Operation: BVI companies can be operated from anywhere in the world.
Asset Protection: BVI’s asset protection tools are advantageous for investors and high net worth individuals seeking to protect their assets from potential creditors.
Investment Holding: For Malaysian business owners, a BVI company can act as a holding company for their investments worldwide, offering centralized control and management.
Case Study: A Malaysian Real Estate Investor
Background
Mr. Lim, who is a Malaysian real estate investor, was interested in accelerating his expansion into Europe and North America instead. Meanwhile, he also needs asset protection and business flexibility.
Solution
After consultation, he decided to set up a BVI holding company.
Implementation & Benefits
- Asset Protection: Through the BVI company, Mr. Lim was able to ring-fence his overseas assets, protecting them from potential litigations and creditors in Malaysia.
- Tax Efficiency: His profits from the real estate business in Europe and North America were channeled through the BVI company, ensuring tax neutrality.
- Confidentiality: Mr. Lim values privacy. By using the BVI structure, details about his company’s directors and shareholders remained confidential.
- Ease of Sale: When Mr. Lim decided to sell one of his properties in Europe, the transaction was executed by transferring the shares of the BVI company, making the process quicker and more efficient.
- Centralized Control: All of Mr. Lim’s international investments were held under the BVI holding company, offering him centralized control and management.
Conclusion
Mr Lim’s ability to expand his investments in overseas real estate privately through a BVI company not only protects his assets from potential creditors and lawsuits but also greatly increases the tax effectiveness of his business. He can still fully control the BVI offshore company in Malaysia.
Note: The above is for general information purposes on the topic and shall not be taken as a substitute or intended for professional advice, legal advice, or financial advice. It is important to ensure that any international business arrangements shall comply with local laws including those in Malaysia if you are considering setting up an offshore company in Malaysia.
Consultation with a qualified professional is important before making any decisions about setting up an offshore company structure, including in BVI. Talk to us today to learn more about forming a company in BVI.
