The British Virgin Islands (BVI) is considered a tax haven because it has a low-tax environment and strict laws protecting the confidentiality of company ownership and financial information.
One of the main reasons the BVI is considered a tax haven is that it has no income, capital gains, or withholding taxes for companies or individuals. This allows businesses and individuals to minimise their tax burden, making it an attractive destination for those looking to reduce their tax liabilities. In addition to its tax-neutral status, the BVI also offers strict confidentiality laws that protect the identity of company owners and shareholders. This makes it difficult for foreign tax authorities to access information about the ownership and financial activities of BVI-registered companies. It's worth noting that BVI has implemented economic substance requirements for certain types of business entities, including companies and limited partnerships, in order to meet international standards for tax transparency and combat tax evasion. These requirements state that companies conducting certain relevant activities, such as banking, insurance, shipping, intellectual property, and holding company activities, must demonstrate adequate economic substance in the BVI. It's also important to note that while the BVI is a reputable offshore jurisdiction, it has been criticised for its lack of transparency, which may lead to reputational risks for companies registered there. It is also important to ensure that you are in compliance with all relevant laws and regulations, both in the BVI and in your home jurisdiction.