What this is: Incorporating a business in the US Virgin Islands (USVI) offers several benefits, such as lower taxes and a favorable business environment. In order to incorporate in the USVI, there are a few steps that need to be taken.
What this means: We’ll help explain some basic things you should know, including how to register as a foreign corporation and annual franchise tax and reporting requirements.
So, you’ve consulted with your attorney and/or tax advisor and decided that it’s in your best interest to do business in the USVI. What’s next?
While the USVI are a US territory, the requirements for domestic incorporation or foreign corporation registration in the USVI are somewhat different than in a US state. It’s wise to get a handle on these distinctions – as well as annual reporting or franchise tax responsibilities – in advance of a move to the USVI.
First, you’ll have to decide (again, with your legal and/or tax professional) which of the three types of corporations that can be formed in the USVI best meet the needs of your business:
To form one of these types of USVI corporations, articles of incorporation must be drafted and filed through Catalyst, an online business platform managed by the Office of the Lieutenant Governor, which serves as the corporate registry for the USVI. (Note that there is not a standardized form for incorporation.) As part of the incorporation process, a corporation must appoint a USVI registered agent to accept any process served on the corporation in the USVI.
Unlike most US states, the USVI requires corporations to have a minimum of three directors, three officers, a president, treasurer and secretary. Corporate directors are not allowed. Stock must also be registered and there is a minimum capital requirement of $1,000.
Once formed, corporations that plan to do business in the USVI must obtain and regularly renew a business license. Corporations wishing to obtain a business license must complete the proper applications in addition to keeping certain documents on file with the Department of Licensing and Consumer Affairs.
If your legal/tax professional recommends not incorporating in the USVI, you can still do business if you register as a foreign corporation. Once again, this must be completed through their online portal.
To do so, you must file a Certificate of Appointment of Process Agent and Sworn Statement with the Office of the Lieutenant Governor. The certificate must be accompanied by a copy of the company’s Certificate of Incorporation and any amendments, a Certificate of Good Standing from its domestic jurisdiction, a signed consent of the registered agent agreeing to act in that capacity and a simple statement of the foreign corporation’s assets, liabilities and capital stock.
Like USVI domestic corporations, foreign corporations are required to get a USVI business license.
All corporations conducting business in the USVI must submit their corporate annual reports and franchise tax annual reports online. Supporting financial statements, which include a general balance sheet and profit and loss statement, must also be provided. These reports are due annually and must be filed on or before June 30, including the year of formation or registration.
This content is provided for informational purposes only and should not be considered, or relied upon, as legal advice.