International Business Companies Act - Repeal

Repeal

In 1999, a series of international initiatives were commenced against tax havens by supra-national bodies such as the OECD, including an initiative against what was termed "unfair tax competition". One of the concerns of the OECD was that jurisdictions such as the British Virgin Islands had a "ring fenced" tax regime, whereby companies could be incorporated under the International Business Companies Act which could not actually trade in the Territory, but would also be exempt from most British Virgin Islands taxes. After a series of discussions, the British Virgin Islands government agreed to repeal the ring-fencing provisions in its tax legislation.

Because of the sheer volume of companies involved, the transition to a new legislative framework was accomplished over a two year transition period. To protect the offshore business, the British Virgin Islands abolished both income tax and stamp duty on all transactions except those relating to land in the Territory. Then the government enacted the BVI Business Companies Act (No 16 of 2004). The slightly cumbersome name was designed to slightly reflect the name of the earlier statute and cash-in on the "IBC brand" which had grown under the former legislation. From 1 January 2005 to 31 December 2005 the two Acts ran in parallel, and it was possible to incorporate a company under either form of legislation. from 1 January 2006 until 31 December 2006, one could no longer incorporate a company under the International Business Companies Act, and all new incorporations had to be conducted under the BVI Business Companies Act. During 2006 detailed transitional provisions were enacted to allow companies formed under the old legislation to adapt to the new legislation without having to significantly amend their constitutional documents.

The International Business Companies Act was then finally repealed in full on 31 December 2006.

A special arrangement between the BVI government and one of the key trust companies in the Territory meant that the last company incorporated under the Act was named "The Last IBC Limited". It was company number 690583.