Significant Amendments to the BVI Business Companies Act

As per the latest updates from the British Virgin Islands Authority (BVI), kindly note that they have recently adopted new amendments to the BVI Business Companies Act in order to ensure continued compliance with international standards.

The following legislation was recently enacted and published in the BVI Official Gazette:

• BVI Business Companies (Amendment) Act 2022
• BVI Business Companies (Amendment) Regulations, 2022

The key changes under the new legislation in the BVI are the following:

1. Striking-off and dissolution:
Under current legislation, a BVI company that is struck off by the Register of Companies will not be immediately dissolved; rather it must remain struck off for a continuous period of 7 years before it is dissolved. During this period, the company will retain its legal status, (and can incur liabilities), but is incapacitated for 7 years, unless it is brought back to good standing.

The new legislation is abolishing the 7-year strike-off period. In this regard, if you are planning to restore any companies that are currently struck off, we advise you to take immediate action to bring them back into good standing. For those companies that would like to receive an official certificate of dissolution, they would still have to go through the dissolution procedure as per BVI regulations.

2. New qualification and residency requirements for liquidators in solvent liquidations:
The new legislation will require that the liquidators of BVI companies must have the requisite professional qualifications and liquidation experience to be appointed as voluntary liquidators and must have physically lived in the BVI for at least 180 days, either continuously or in aggregate, prior to their appointment. For any companies where joint liquidators are appointed, at least one of the liquidators must meet the residency requirement.

These resident liquidators will be required to collect the corporate records kept and maintained by the company in liquidation and on completion of the liquidation to provide copies of all records collected by the liquidator to the Registered Agent of the company.

3. Publicly available director names:
In compliance with international standards, under the new legislation, the names of a company’s current directors may be made available publicly on application to the Registrar via the BVI Financial Services Commission’s (“FSC’s”) online filing platform, VIRRGIN. All companies have been required to file their full and up-to-date Register of Directors with the Registrar on a private basis since 2016.

Only registered users of VIRRGIN will be able to make such applications to the Registrar.

4. Financial records and accounts:
In addition to existing record-keeping obligations by the company, the new legislation will require BVI companies to provide certain financial information, in the form of an Annual Return, to their Registered Agent. The form of return has not yet been finalized, but it is expected to consist of a simple balance sheet and profit and loss statement, which will not need to be audited.

An annual return will need to be prepared for each financial year of the company and filed with the Registered Agent within nine months following the end of the financial year to which it relates. The Registered Agent will have an obligation to inform the Registrar if it has not received the annual return within 30 days of the due date. In practice, the first deadline for companies with a year-end of 31 December 2023 for the filing is therefore expected to be 30 September 2024.

The information to be filed with the Registered Agent will not be made public. Listed companies and companies that file tax returns in the BVI and certain BVI regulated entities will not be required to file an annual return.

5. Register of persons with significant control:
The new legislation outlines a brief framework by which the BVI might in the future introduce a public register of persons with significant control. This is in line with the previous commitments by the BVI Government to introduce such a register by 2023, subject to certain caveats and qualifications.

The legislation provides that the BVI Government may, by subsequent regulations, specify the requirements for the format of such registers – and also provides that the regulations may contain exemptions or restrict access to certain persons’ data. The new legislation is expected to come into effect by January 2023.