Winding Up BVI Entities

Early preparations and cost-saving measures

With the 2026 fee deadline approaching, operators of First Half Companies (“FHCs”)—those incorporated between 1 January and 30 June—should now consider the steps required to close down redundant structures before 31 May 2026, when annual government fees fall due.

Early planning can deliver significant savings across regulatory, registered office, director, audit and other annual costs. Under the BVI legislation, a company may only enter voluntary liquidation if it has no liabilities or is solvent on both a cash-flow and balance-sheet basis. Preparing early ensures the company meets this statutory solvency requirement and avoids unnecessary delays.

At JTC, we provide direct access to a team of qualified insolvency professionals who have significant experience in acting as liquidators or as wind-down directors across multiple jurisdictions to ensure the efficient and timely winding up of a structure.

Overview of JTC Special Situations’ wind-down services

We appreciate that the liquidation or wind-down phase of an entity’s life-cycle may not be a primary focus of operators, or an efficient use of their teams’ time. We offer wind-down services to provide operators the opportunity to extract themselves from this part of the life-cycle, in order to focus on their core business and to create long-term cost savings.

JTC Special Situations is equipped to support clients in the critical pre-liquidation phase. We can be appointed in advance of an entity reaching “clean shell” status to provide tailored wind-down services and assisting with comprehensive case management. Our team works closely with stakeholders to efficiently resolve outstanding matters (including litigation), to settle obligations and to bring the entity to a clean shell status in readiness for formal liquidation. This includes preparing the relevant statutory documents which must be approved within strict timeframes prior to the appointment of a voluntary liquidator.

This proactive approach ensures a smooth transition, allows long-term cost savings which maximise value for stakeholders and mitigates potential risks during the wind-down process.

Our experienced team offers a combination of services typically undertaken by a number of service providers, resulting in significant savings and convenience. The following services are regularly provided for liquidation cases:

• Realising assets
• Arranging and managing the sale of illiquid assets on secondary markets
• Resolving remaining liabilities and terminating service providers
• Producing timely NAV estimates and reports to investors at a reduced cost thereby eliminating the need to engage a third-party administrator
• Distributions to investors
• Managing litigation
• Preparing reports used by tax preparers to facilitate the preparation of annual K-1s and PFIC statements often required by investors based in the United States
• Offering registered office services including the submission of annual returns to the Registrar of Companies
• Completing regulatory reporting (FATCA, CRS, Beneficial Ownership, Economic Substance)

By consolidating such areas with one service provider, we are often able to achieve significant cost savings over the remaining life of a structure.

Dealing with illiquid and problematic assets – Asset Resolution Company SPC (“ARC”)

Most liquidations we are appointed over contain some residual problematic asset-related issues. These tend to manifest themselves as assets that are either very illiquid, very hard to value, potentially have no value or are perhaps a combination of all three. These residual assets often make closing redundant entities more onerous than might otherwise be.

ARC is a JTC Special Situations solution for dealing with assets that fall into the above categories. ARC is a Segregated Portfolio Company (“SPC”) that can receive and hold assets, allowing the transferring entity to be closed in a straightforward manner. In recent years, ARC has been used to hold escrow funds, FIN48 reserves, disputed sums, restricted securities, long-dated commercial notes and a variety of illiquid or otherwise hard to value private and publicly traded securities. Assets are typically contributed in-kind, with shares in a dedicated cell distributed to investors.

ARC can provide a cost-effective structure in which illiquid or slow realising assets can be held to maturity. It can also be deployed to dispose of positions with no expected future value in order to facilitate the termination of prime broker and custodian relationships.

BVI Regulated Entities

A BVI-regulated entity such as a mutual fund or registered private fund is required to obtain the prior written consent of the BVI Financial Services Commission (“FSC”) before passing any resolutions to appoint a voluntary liquidator and the FSC must also approve the proposed liquidator. The FSC may impose conditions for the appointment of the liquidator and the conduct of the liquidation.

The deregistering fund must complete and file its final audit before the deregistration process can be completed. It will therefore accrue its full FSC license fee for 2026 if the final audit cannot be completed and filed.

For FSC-regulated mutual or private funds, it is therefore recommended to start the wind-down process well in advance of the target completion date to allow sufficient time for the audited financial statements to be completed or a waiver requested.

FSC audit waivers

An audit waiver is not automatically granted by the FSC for a final stub period audit. This is considered by the FSC under exceptional circumstances such as where a fund is being voluntary liquidated and a third-party liquidator has been appointed under terms that require a review of the period since the last financial year end for which an audit has been filed and a detailed liquidator’s report covering the period submitted to FSC.

As part of the liquidation process, JTC Special Situations can complete the review and prepare the third-party liquidator report for the FSC, request the audit waiver and attend to the deregistration. Where a waiver is granted, the FSC may still require additional reporting or impose conditions under the Companies Act and the Securities and Investment Business Act.

Timing for first half companies – Prevent 2026 fees

For those entities looking to complete their activities within the first half of 2026, time is of the essence. Annual government fees for first half companies (“FHC”) (companies incorporated between 1 January and 30 June) will fall due by 31 May annually; and for second half companies (“SHC”) (companies incorporated between 1 July and 31 December), fees will fall due on 30 November annually. In order to prevent 2026 annual BVI Registrar of Companies fees, a Voluntary Liquidator of an FHC needs to have been appointed and the liquidation completed by 31 May 2026.

We therefore encourage you to get in touch with us in relation to your FHC by 14 March 2026. An early engagement will allow us to assess your specific circumstances, develop a tailored wind-down or liquidation plan, identify if and where cost savings can be achieved and meet all necessary deadlines together.

The voluntary liquidation of an entity with no significant complications, where the liquidator is furnished with all information from the outset, generally takes approximately 2 months to complete. Government fees can generally be eliminated if the appointment of a voluntary liquidator occurs no later than 3 April 2026.

Regardless of whether it is an FHC or an SHC, it is advisable to start this process as soon as practicable if you want the asset to be off your group consolidated accounts for the next accounting period.

Other jurisdictions

We are also pleased to offer our wind-down and liquidation services in other jurisdictions including entities registered in Delaware, Bermuda and Ireland. Our team is experienced in navigating the regulatory framework and practical considerations across various jurisdictions, ensuring a seamless wind-down process.

To discuss wind-down or liquidation solutions, please contact Anna Silver or Bijorn Bullock for further information and tailored assistance.