1.BVI company is on the first floor.
The first layer BVI company is usually located between the shareholders of listed companies and Cayman companies. Shareholders hold 65,438+000% of the shares of Cayman Company with their own BVI company, rather than individuals directly holding the shares of Cayman Company. Its main functions are as follows:
1)BVI company is a "limited liability company". By holding the equity of the entity operating company through BVI company, the investment risk of natural person shareholders in the entity operating company in different judicial environments can be avoided. It will not say that investors need to bear unlimited responsibilities, and try to avoid investors themselves being involved in various judicial environments.
2)BVI protects the privacy of the company, does not disclose the identity of shareholders, and keeps the information of directors absolutely confidential. Therefore, due to political, public opinion and other non-commercial factors, some "mysterious" shareholders can buy shares of listed entities or withdraw from listed entities through BVI company, which is not bound by the laws and regulations of the place where they are listed. Usually, companies listed on the US stock market will set a lock-up period of six months. When shareholders want to reduce or transfer the shareholders' rights and interests of listed entities, they can transfer their rights and interests through BVI company, thus avoiding the SEC's restriction on the lock-up period of shareholders of listed companies. In addition, even after the lock-up period, according to the relevant provisions of the SEC, the information disclosure related to the increase or decrease of shareholders holding more than 5% shares of listed companies is more stringent and subject to more supervision and restrictions. If the shares are transferred through BVI, it will be more hidden and convenient.
3)BVI does not collect income tax on the income from commercial activities outside the island, but only collects annual management fees. Therefore, major shareholders do not need to pay capital gains tax when transferring shares of listed entities in BVI, which can help major shareholders avoid immediate capital gains tax. You don't have to pay taxes in BVI. Is it necessary to pay taxes in China if it is a China Stock Exchange? At present, it is more and more difficult to jointly carry out anti-tax avoidance at home and abroad. This part is more complicated, and I will write an article to discuss it later.
4) In addition, BVI company has some conventional advantages: ①BVI company's registered capital does not need to be paid in, but can be subscribed; 2 whether there is income, there is no need to do accounting and tax returns. If it is a Hong Kong company, it is necessary to do accounting and tax returns if it has income; ③ Enterprises on the island can open bank accounts all over the world.
2.BVI company is on the second floor.
The second-tier BVI company is usually located between Cayman Company and Hong Kong Company, and Cayman Company holds 0/00% equity of BVI Company/KLOC. Its main functions are as follows:
1) It is convenient for different businesses of listed companies to be independent of each other, and it is convenient for future management and split listing. Take Alibaba's acquisition of Youku as an example. Because Youku is different from Alibaba Group's previous business, it controls Youku's domestic operating entities by setting up AlibabaInvestmentLimited(BVI) separately.
2) Stamp duty related to equity transfer can be reduced or exempted. According to the provisions of Hong Kong tax law, when an overseas company transfers Hong Kong stocks, both buyers and sellers are required to pay stamp duty of 0. 1% of the company's net assets involved in the share transfer. Adding a layer of BVI company between Hong Kong company and Cayman company can directly transfer the equity of BVI company if it is necessary to dispose of domestic related business in the future, thus avoiding the stamp duty stipulated in Hong Kong tax law. For large companies, the tax burden of 0. 1% is quite serious.