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US Virgin Islands Limited Liability Company (LLC)
Located on the Caribbean, the U.S. Virgin Islands are a U.S. Territory consisting of a group of islands and islets. Its capital is Charlotte Amalie on St. Thomas Island. St. Croix Island and its historic towns, Frederiksted and Christiansted are to the south. To the east is St. John Island, most of which comprises Virgin Islands National Park.
In 1672, the Danish established the first settlement on St. Thomas and then in 1694 St. John was added. In 1733, The Danish West India Company added St. Croix.
The United States purchased the islands from Denmark for $25 million in 1917. In 1927, citizenship was granted to Virgin Islanders. The Organic Act of 1936 allowed for the creation of a senate. In 1970, the U.S. Virgin Islands elected its first governor, Melvin H. Evans.
U.S. Virgin Islands LLC’s are regulated by the Limited Liability Company Act. Their LLC’s law was created using laws from two states: Kentucky and Tennessee.
A U.S. Virgin Islands LLC receives many benefits including:
• Tax Advantages: There are many tax advantages available in the US Virgin Islands, which are sanctioned by the U.S. government.
• One Shareholder: Only one shareholder is required to form a LLC.
• Low Minimum Authorized Capital: The minimum authorized capital for corporations in the US Virgin Islands is only $1000 USD.
• No Required Meetings: Meetings of managers and members in the U.S. Virgin Islands is optional.
A U.S. Virgin Islands LLC must pick a unique name that is not similar to already existing corporation or company names.
The name of an LLC must include the words “limited company” or “limited liability company” (abbreviating the word “company” to “co.” or the word “limited” to “ltd.” is acceptable) or the abbreviation “LLC”, “L.L.C”, “LC.” or “L.C.”.
Office Address and Local Agent
A U.S. Virgin Islands LLC must have a local registered agent and a local office address. This address will be used for process service requests and official notices.
A U.S. Virgin Islands LLC is required to have at least one shareholder.
Both private persons and corporate bodies can perform the duties of shareholders.
Directors and Officers
A U.S. Virgin Islands LLC is required to have two directors, or managers.
Private persons and corporate bodies can both act as directors.
A U.S. Virgin Islands LLC is required to have a minimum authorized capital of $1,000 USD.
U.S. Virgin Islands LLCs are not required to pay corporate taxes under the U.S. Internal Revenue “mirror code.” The one exception to this rule is if the corporation decides to be considered, for federal and state tax reasons, as a regular corporation. U.S. Virgin Islands LLCs are required to file yearly tax returns.
The “mirror code” can be defined as the U.S. Internal Revenue Service’s code ensuring that taxes are paid to the U.S. Virgin Islands instead of the U.S. government.
Also, unless a company member is exempt from income taxes, its distributive share of membership income and loss is treated the same to the member and reported on the tax return, regardless of whether or not the member received the income.
If a U.S. Virgin Islands LLC has only one owner, then the owner is considered the same as the entity he or she owns for tax reasons.
In addition, The IRS can exempt a U.S. Virgin Islands LLC under Section 501(c)(3). It needs to elects to be treated as a separate legal entity for tax purposes. Plus, its operating agreement includes the required language while also meeting several requirements. They are largely designed to guard against inurement (giving inordinate proceeds insiders) and private benefit.
A U.S. Virgin Islands LLC annual renewal fee is $300 USD.
While there is no public record keeping expected of U.S. Virgin Islands LLCs, companies are expected to allow access to records they do keep.
Accounting and Audit Requirements
There are no specified recording requirements imposed on U.S. Virgin Islands LLCs by the Virgin Islands Limited Liability Company Act. Still, the company is expected to allow access to records it does keep.
U.S. Virgin Islands LLCs must file annual reports and also pay the annual report fee by June 30th of each year. The annual report fee is equal to 0.15% of the capital used by the LLC in conducting business during the prior calendar year, with a minimum fee of $300.
Annual General Meeting
For U.S. Virgin Islands LLCs, meetings for managers or members are optional.
Time Required for Incorporation
U.S. Virgin Islands LLCs can expect the entire process to take about one week to one month. This completion time depends on the turnaround with the LLC name registration, as well as how accurately the company completes its registration documents.
U.S. Virgin Islands LLCs can purchase shelf companies for faster registration.
A U.S. Virgin Islands LLC receives many benefits including: several tax advantages sanctioned by the IRS, only one shareholder required to form a LLC, low minimum authorized capital, no required meetings, and low annual renewal fees.