Want to learn how to form an LLC in the U.S. Virgin Islands to take advantage of the low tax rates?
You’re not alone. Regardless of your reason for forming an LLC in the U.S. Virgin Islands, our article will walk you through every step of the process. These include the mandatory steps, such as filing an Article of Organization, and optional ones, like creating an operating agreement.
This article also includes our top recommendations for the best registered agent service providers and LLC formation packages for those needing extra help forming their LLC. Keep reading to learn more!
Choose a Name for Your U.S. Virgin Islands LLC
Choosing a name for your LLC is one of the first steps in forming a business in the U.S. Virgin Islands. How do you pick the perfect name? Start by choosing a name that represents what your business does.
Next, make sure your name complies with the naming guidelines and requirements in the U.S. Virgin Islands.
The first naming guideline you must comply with is choosing an LLC name that is unique and distinguishable from other business names. You can check if your chosen LLC name is available in the U.S. Virgin Islands by doing an LLC name search.
Your chosen name must include a phrase that denotes the business entity, such as “Limited Liability Company,” “LLC,” or “L.L.C.”
In addition, restricted words, such as Bank, Attorney, University, etc., require additional paperwork, such as proof of your expertise. A licensed professional must also be part of your LLC.
If you feel another business entity might acquire your chosen LLC name while you are filing other essential documents, consider reserving your LLC name for up to 120 days. The reservation fee is $30.
Get a Registered Agent
All LLCs in the U.S. Virgin Islands must have a registered agent listed on their formation paperwork to gain approval. A registered agent is an individual or company designated to receive and forward legal paperwork, such as service of process, on behalf of the LLC.
The U.S. Virgin Islands is not strict about the rules for being a registered agent. You can nominate yourself or another LLC member to be your registered agent. However, there are three primary requirements the U.S. Virgin Islands has for every person wishing to act as a registered agent. These include:
- You must be at least 18 years old
- You must have a U.S. Virgin Islands street address (not a P.O. box address).
- You must be available to accept documents during all regular working hours.
Some LLC owners choose to hire a third-party registered agent service provider to handle everything. If you agree that’s a sensible route, then here are the three recommendations for the best registered agent companies in the U.S. Virgin Islands.
Our top recommendation for the best registered agent in the U.S. Virgin Islands is ZenBusiness. It is rated #1 on influential websites, such as MarketWatch. Therefore, you can rest assured knowing your LLC is in great hands.
Over the years, ZenBusiness has helped more than 300K business entities remain compliant, further proving their excellence.
As your LLC’s registered agent, ZenBusiness will give you access to a personalized dashboard, email notifications, fast turnaround, and document scanning. It is also popular for its $5K Grant Program, which funds struggling entrepreneurs to start and grow their businesses.
Their annual fee is $199.
Northwest is among the most popular registered agent service providers in the U.S. Virgin Islands. Combining practicality and affordability, Northwest will help you comply with all requirements at an affordable price.
For an annual fee of $125, you will get access to pre-filled forms, scanned documents, and annual report reminders. This fee will be discounted to $100 if you hire Northwest’s registered agent services in more than four states.
In addition, Northwest is popular for its excellent customer support team, referred to as Corporate Guides. Their experienced experts will help you with any issues about compliance and registered agent services.
Our third recommendation for the best registered agent company in the U.S. Virgin Islands is IncFile. Their registered agent package includes personalized SMS and email alerts, automatic email forwarding, and access to a tailored dashboard.
File an Article of Organization
In the U.S. Virgin Islands, every Limited Liability Company (LLC) is required to file an Article of Organization.
An Article of Organization is a business registration document where you submit essential information about your LLC. These include your business type, location, and purpose, as well as the management structure. You will also be required to provide details about your hired registered agent.
You have two methods for filing your Article of Organization with the state: Online filing or in-person/mail. The easiest and fastest way is to file your Article of Organization online. You only need to visit the Division of Corporations and Trademarks Catalyst system and fill out the Article of Organization form.
Filing an Article of Organization in the U.S. Virgin Islands costs $300.
Draw Up an Operating Agreement
An operating agreement is an internal document that outlines the management structure of your LLC, each member’s ownership percentage, the roles of each member, how profits and losses are split, etc.
Creating an operating agreement for LLCs is not a legal requirement by the U.S. Virgin Islands. However, drafting one can make managing and running your business significantly easier.
For instance, an operating agreement can prevent conflicts and profit-related disputes among members as it outlines the obligations of every LLC member.
Creating your operating agreement in the U.S. Virgin Islands is straightforward. You only need to download and fill out a sample operating agreement template. You can also hire an LLC formation service provider to draft one on your behalf.
Acquire the Necessary Licenses and Permits
Every LLC operating in the U.S. Virgin Islands must acquire a business license from the DLCA (Department of Licensing and Consumer Affairs). Before submitting your business license application in the U.S. Virgin Islands, you must have all the necessary permits, clearance, and certifications. These include the following:
- Tax clearance letter
- A zoning compliance review by the Department of Planning and Natural Resources
- Police record check
- Fire code compliance review by the Fire Service
- Certificate of Trade Name Registration (Article of Organization)
- Board certification, depending on your profession and business type
Depending on your business type, you may also be required to submit a review by the Department of Health. Moreover, certain professions must acquire a license or certification from their respective boards. You only need to check if your profession requires a board certification.
Get a Federal Tax ID
If your LLC is taxed separately and has employees (or more than one member), you must acquire an Employer IIdentification Number (EIN).
You can think of an EIN as a Social Security Number for your business. The IRS uses it to identify your LLC for tax purposes.
If your LLC isn’t required to obtain an EIN, you should consider acquiring it, as it has several benefits. For example, an EIN prevents identity theft and makes opening a business bank and credit account significantly easier. It also makes it easier to file taxes. In addition, it adds credibility to your LLC and can help it establish itself as a separate business entity.
You can acquire your EIN by submitting an online application on the Internal Revenue Service (IRS) website. The application process is straightforward and free of charge.
Open Business Bank Accounts
As an LLC member or owner, you must separate your business and personal funds. If you combine business and personal funds, you risk losing the liability protection offered by the LLC.
Usually called “piercing the corporate veil,” this practice can lead to personal liability, placing personal assets at risk.
Opening a separate business bank account may be the most effective solution for protecting your personal liability. When opening your LLC’s business bank account in the U.S. Virgin Islands, you may be required to provide LLC documentation, including your EIN, Operating Agreement, and Article of Organization.
Purchase U.S. Virgin Islands Business Insurance
Purchasing business insurance is another vital step in forming your Limited Liability Company in the U.S. Virgin Islands. By nature, LLCs offer limited liability protection to their owner’s personal assets in case of a claim or lawsuit.
While LLCs are a much more secure option than partnerships and sole proprietorships, it is still recommended for LLC owners to purchase business insurance. There are various types of business insurance policies you can purchase depending on your business goals.
For example, all LLCs with more than one employee must get a workers’ compensation insurance policy. This insurance coverage pays for medical bills in case of on-the-job injuries or illnesses. Other common insurance policies are general liability insurance, property insurance, health insurance, automotive insurance, etc.
Get a competitive quote for your insurance needs by consulting a comparison site like Insureon.
Speed Up the Process with an LLC Formation Package
The above LLC formation steps can be daunting, time-consuming, and challenging. Fortunately, buying an LLC formation package can streamline and speed up the formation process. There are many companies that offer LLC formation packages.
For example, ZenBusiness provides three LLC formation packages. The cheapest package is the Starter plan, costing $0 plus filing fees. With this package, you can expect your LLC to be formed in two to three weeks. This package only allows you to check your LLC name availability and file the Article of Organization. Most additional perks are available as pricey add-ons, including Federal Tax ID, registered agent, worry-free compliance, operating agreement, etc.
However, you can access some of these add-ons by upgrading to the Pro package for $199 plus the filing fee. These include a guided operating agreement, a fast filing speed of 1-2 working days, and worry-free compliance.
The third LLC formation package is the Premium plan, which costs $299. It includes more add-on features, such as business document templates, a customizable business website, a domain name and email address, etc.
Other LLC companies that offer comprehensive and affordable LLC formation packages include LegalZoom, IncFile, Northwest, etc.
FAQs About Forming an LLC in the U.S. Virgin Islands
How Long Will It Take to Form My LLC in the U.S. Virgin Islands?
The time it takes to form a U.S. Virgin Islands LLC can vary based on various factors, including the completeness of your submission, the workload of the government office processing your Article of Organization application, and any extra step needed by the U.S. Virgin Islands. However, the process usually takes a few weeks.
How Much Does It Cost to Set Up an LLC in the U.S. Virgin Islands?
Forming an LLC in the U.S. Virgin Islands costs $300. This is the filing fee for the Article of Organization. There are also additional fees, such as hiring a registered agent, LLC name reservation fee, etc.
Can I Act as my Own Registered Agent in the U.S. Virgin Islands?
The U.S. Virgin Islands allows you to act as your own registered agent. However, to do this, you must comply with certain requirements. For example, you must be at least 18 years old with a permanent street address in the U.S. Virgin Islands. You must also be available at the same street address during all regular business hours. However, we strongly recommend hiring a third-party registered agent service provider.
Can I Form a Single-Member LLC in the U.S. Virgin Islands?
When it comes to forming a Limited Liability Company in the U.S. Virgin Islands, the single-member LLC is similar to a multi-member LLC. The steps you require to form your single-member LLC in the U.S. Virgin Islands are the same as what is discussed in this article.
We hope this article has given you every information you need to form and operate your Limited Liability Company (LLC) in the U.S. Virgin Islands.
However, if you find the steps time-consuming and complex, we recommend hiring a top LLC company to complete the process on your behalf.