The U.S. Virgin Islands provides business owners with some significant tax incentives as a means of boosting its economy and encouraging businesses to open up shop in the Territory. While qualified businesses are able to reduce up to 90 percent of their personal and corporate federal income taxes, and could even receive a full exemption on local taxes such business property, excise and gross receipt taxes, there are a few basic items you should know about registration and incorporation in the U.S. Virgin Islands that all corporations must go through to be legally incorporated in the Territory.
Articles of incorporation
You must file articles of incorporation if you are to officially form a corporation in the U.S. Virgin Islands. Unlike most states, however, there is not a standard form for incorporation—so it is up to the corporations to draft this document themselves.
The three types of corporations that can be formed in the territory are:
- Domestic corporations: These corporations are located in the Territory and do business here. They are eligible for tax incentives if they meet the qualifications put forth by the Economic Development Authority.
- Exempt companies: These companies are not allowed to engage in any active trade in the U.S. Virgin Islands or United States. Residents of the United States or the Territory are not allowed to own 10 percent or more of the company. Such companies are exempt from income, gross receipts, license requirements and withholding taxes in the territory.
Registering as a foreign corporation
Any company that wants to conduct business in the U.S. Virgin Islands, but does not wish to incorporate, is required to file a document known as a Certificate of Appointment of Process Agent and Sworn Statement. This document must be submitted to the Territory’s Office of the Lieutenant Governor.
Additionally, the corporation is required to provide a statement of its liabilities, assets and capital stock to the lieutenant governor. The certificate filed must include a copy of the company’s Certificate of Incorporation and any amendments that have followed, along with a Certificate of Good Standing from its domestic jurisdiction. Signed consent from a registered agent is also required to show the named agent has agreed to serve in that role.
Individuals wishing to start a corporation in the U.S. Virgin Islands have a variety of options at their disposal. For more information on how to get a corporation registered and the types of benefits that are associated with becoming a corporation in the territory, consult an experienced business law attorney.
Tom Bolt is Managing Attorney at BoltNagiPC, a widely respected and well-established corporate law firm serving clients throughout the U.S. Virgin Islands.