Montserrat is a British Overseas Territory, a small island whose southern half remains off-limits due to being a danger zone after the Soufrière Hills volcano eruption in 1995. The natural disaster forced many residents to leave the island, and although some later returned, many homes remained abandoned. Since then, the island has rarely been discussed, and company registrations are infrequent.

Despite its tragic history, Montserrat offers favorable conditions for establishing and running a business. Even after amendments effective from January 1, 2019, Montserrat retains attractive features that distinguish it from other island jurisdictions.

Advantages Company Registration in Montserrat

Compared to other offshore territories, company registration in Montserrat offers several distinctive advantages that make the island jurisdiction stand out. The advantages of Montserrat include:

Montserrat is not widely known, which gives it a certain uniqueness;
The island is recognized by the OECD as “partially compliant” with global standards, which is a clear advantage over many other offshore jurisdictions;
Montserrat is a British Overseas Territory, which positively affects the perception of the island by other countries. Moreover, English is the official language;
Company registration is fast and simple. A company can be registered on Montserrat within just 5–7 days;
The possibility of creating an IBC (International Business Company), which is no longer available in jurisdictions such as Saint Vincent and the Grenadines and others. The formation of IBCs is governed by a special law — International Business Companies Act;

Important:

In 2018, amendments to the International Business Companies Act were adopted, introducing several changes (read on for details).

IBC companies benefit from a very low net profit tax rate or no corporate tax at all (the company can choose to pay an annual license fee instead of corporate income tax);
The ability to establish trusts;
High level of confidentiality of information.

Company Forms on Montserrat

Montserrat offers several main company forms available for registration:

International Business Company (IBC)

This is the form ideally suited for non-resident companies. As mentioned, IBC registration is governed by a specific legal act: the International Business Companies Act and its amendments.

An IBC can be established with 100% foreign ownership. This is the ideal option for those who planned to set up an IBC, for example, in Saint Vincent but missed the opportunity.

By law, an IBC is a company that:
1. Does not conduct business with Montserrat residents;
2. Does not own or hold an interest in real estate located in Montserrat;
3. Does not accept banking deposits from persons resident in Montserrat;
4. Does not enter into insurance contracts with persons resident in Montserrat.
Advantages of forming an IBC:
1. Possibility to register a company with 100% foreign ownership. The company structure does not require residents;
2. Ability to operate business outside Montserrat. The company can be established on the island but conduct activities anywhere in the world;
3. An IBC can have just one person who simultaneously acts as shareholder and director;
4. Information about beneficiaries, directors, and shareholders is not public and is not recorded in any public registry;
5. The corporate income tax rate is only 20%. The tax can be waived by paying the license fee instead.

Important:

If a company decides that it is more advantageous to pay corporate income tax, it must submit a notice to the Companies Registry by January 31.

Limited Liability Company (LLC)

LLCs are also regulated by a separate law — Limited Liability Company Act.

An LLC can be established by one or more persons, who are not personally liable for the company’s obligations beyond their contribution.

Limited Partnership

The creation and operation of partnerships are governed by the Limited Partnership Act.

According to the law, a partnership must have at least one general partner and one limited partner. Clause 6, paragraph 4 of the Act states that at least one limited partner must be a resident of Montserrat (if an individual) or registered/established in Montserrat (if a legal entity).

Amendments to the IBC Act: Key Changes

The Amendments to the International Business Companies Act in Montserrat were adopted in 2018 and came into effect on January 1, 2019. According to the Amendments, the following points were removed or revised:

Section 126 on license fees and taxes was supplemented with additional clauses. In addition to stipulating the requirement to pay an annual license fee of $300 for a company with a share capital up to $50,000 and $1,000 for a company with share capital over $50,000, new clauses 3, 4, and 5 were introduced.

A crucial new clause — clause 3 — establishes that IBCs can now be subject to corporate income tax, which refers to another law — the Income and Corporation Tax Act.

Clause 4 is also significant, as it establishes the company’s obligation to submit an income report.

Note:

The Income and Corporation Tax Act, referenced by the new Amendments, contains numerous exemptions applicable to entities that are not subject to corporate income tax.
If you are planning company registration in Montserrat, contact our experts to clarify whether your company will be taxed.