BVI COMPANIES TO FACE NEW FINANCIAL REPORTING AND LEGAL REQUIREMENTS
Companies in the British Virgin Islands will be subject to tighter financial and legal regulations as of January 1st 2023 due to recently announced changes to the BVI Business Companies Act 2004.
The changes being introduced through the new BVI Business Companies (Amendment) Act 2022 and the associated BVI Business Companies (Amendment) Regulations, 2022 (together “BCA Amendments”), are part of the government’s efforts to align the BVI closer with international transparency standards and best practices on information sharing between authorities.
What are the new financial reporting requirements?
Among the key changes coming into force in three months’ time is a new set of financial reporting requirements, that will include the need for BVI entities to file an annual return with a Registered Agent, like Amicorp. Listed companies, companies which pay tax in the BVI and certain BVI regulated entities will be exempt from that rule.
The exact format of the annual return is still being finalized, but it is likely that the required information will take the form of a simple balance sheet and a profit and loss statement. That annual return will not need to be audited, but importantly, it must be filed by the BVI entity with a Registered Agent within nine months of financial year ends. If the company fails to do so within 30 days of that due date, the Registered Agent is legally obliged to inform the BVI Financial Services Commission (‘BVI FSC’), or else both parties face potentially significant consequences.
The information of the annual return filed with the Registered Agent will not be made publicly available, nor is the Registered Agent obliged to file that information with any regulator or BVI government authority, unless requested to do so as part of a court order.
How can Amicorp help with these changes?
As a Registered Agent in the BVI, the Amicorp team supports many BVI businesses by ensuring they remain compliant with these new regulations, as well as help them manage their wider corporate affairs. We can help:
- Prepare the book of accounts needed for the annual return
- Add additional support services to help maintain financial records
- Provide support, explanations and evidence of transactions when dealing with government agencies
- Provide reliable and safe storage of critical financial documents
- And for new clients, we can act as a Registered Agent
What other changes have been announced in the BCA Amendments?
Among the other legislative amendments announced by the BVI FSC are:
- The existing regime that allows a struck-off company to continue to exist in a suspended state for seven years, where it (or its directors, members, and any liquidator or receiver) may not take any actions unless it is to bring it back into good standing, in which case it can be restored, will be abolished. As of 1st January 2023, any struck-off entity will be dissolved immediately. Brief transitional arrangements will apply to companies which are currently in a struck off or dissolved state.
- For companies that are in a dissolved state, the restoration process will be made simpler by allowing them to apply to the Registrar of Corporate Affairs without the need for a court order. This is providing the company submits that within five years of the date of dissolution, and a Registered Agent has agreed to act for the company and declared the information it holds for the company, its directors and owners, is current and in line with BVI regulations. There are a few circumstances however, where a company may still only be restored by a court order. When a company is restored, under either method, it is deemed never to have been struck off/dissolved.
- A residency requirement has been added to persons being appointed to act as a liquidator of BVI companies on a solvent basis. Any such individual must have physically lived in the BVI for at least 180 days, either continuously or in aggregate, prior to their appointment. However, in recognition that some companies’ main operations may be a long distance away from the BVI, the appointment of joint liquidators will be allowed, where only one liquidator meets the residency test. Liquidators will now be required to take steps to obtain accounting records before a liquidation can commence.
- Under current legislations, the names of any directors of BVI companies are filed with the Registry of Corporate Affairs, but those names are not publicly available. Although still to be formally announced, that is set to change under the BCA Amendments, with the names of current directors of BVI companies to be made available to registered users of the online VIRRGIN system. Any directors’ names though will only be revealed by searching for a particular company; it will not be possible to search against the names of individuals to verify if that person is a director of a particular company. There are expected to be additional costs to undertake these searches and the information made available will not include dates of birth, or addresses. The names of former directors will not be made available.
- The BVI already has a register for Beneficial Owners, whereby all companies and limited partnerships registered in the BVI are required to report information regarding their beneficial owners. The information is then loaded by their Registered Agent onto a central database, the Beneficial Ownership Secure Search System (BOSS), which is only accessible by regulatory authorities. The BCA Amendments provide a framework by which the BVI might introduce a public register of Persons with Significant Control at some point in the future. It follows previous commitments made by the BVI government to introduce a register by 2023, subject to certain caveats, including such registers becoming an international standard.
We will be sharing further updates once more details have been published on the financial reporting requirements. In the meantime, if you would like to find out more about the new BCA Amendments or how Amicorp can support your business with these changes, please get in touch with the team here.