Following a consultation with practitioners across the financial services industry, the British Virgin Islands (BVI) has approved amendments to its company legislative framework, underlining the appeal of its regime and aligning to international standards.
The recently enacted amendments to the BVI Business Companies Act, and the associated BVI Business Companies Regulations, will come into effect on 1 January 2023.
The revisions include measures to enhance the process for dissolving and restoring companies under BVI law and the continuation of companies outside of the BVI. There are also new requirements being introduced around financial reporting, accounting and record keeping. It is not yet clear what form the annual financial return will take, but further updates will follow.
The amendments are aligned with the BVI’s ongoing commitment to complying with international standards on transparency, as set out by bodies including the OECD and FATF.
The core updates include:
- Voluntary liquidations: the liquidator of a company making a solvent liquidation will be required to be resident in the BVI. Where a company has joint liquidators, only one liquidator is required to be resident
- An annual financial return will need to be filed within nine months of the year end. The exact details of the filing are still to be determined, however it is understood that an annual declaration must be completed and then maintained by the Registered Agent. This is likely to require a balance sheet and profit and loss account. If this is not done, the Registered Agent will be required to notify the registrar, and the company will be deemed to be not in good standing
- “Striking-off” has been a common method of removing companies from the registry due to non-payment of fees. The current striking-off regime will be effectively abolished by the BCA Amendment Act as from 1 January 2023 by dispensing with the seven-year period that the struck off company currently continues to exist within. From 1 January 2023, all newly struck-off companies will therefore be immediately dissolved on the date the Registrar publishes a notice of striking off in the Gazette
- Restrictions on the use of the words ‘charitable’ or ‘non-commercial’ in a company’s name: where a company is being proposed to be incorporated and wishes to use the above listed words in its name, it must apply to the Registrar of Companies for approval
- The prohibition on issuing bearer shares. BVI companies shall no longer be able to issue, convert into or exchange for bearer shares. All existing bearer shares will be deemed converted to registered shares on 1 July 2023
- At present, the names and other details of persons acting as directors of BVI companies, whilst filed with the Registry of Corporate Affairs, are not publicly available. Under the new legislation, the Registrar may, on application, provide a list of the persons recorded as directors of the company (in the registers required to be filed with Registrar under the current law). The personal details of directors will not be made available – it will be their names only. Alternate directors will also need to be filed with the registrar
- A company that continues into the BVI will need to advertise its intention in the Gazette at least 14 days prior to the filing. It must also notify the members and creditors in writing and file with the registrar a notice of such intention
Commenting on the amendments, Steve Bispham, Director at JTC in the BVI, said:
“The BVI has long held a strong reputation for corporate structuring, dissolution and insolvency work, and these latest measures will help to ensure that continues to be the case.
“Companies registered in the BVI should now be looking carefully at the new requirements to ensure they are ready for when they come into force in 2023. The team at JTC remains ready to work with and support companies through that process.”