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Changes to the BVI Business Companies Act coming in 2023.

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On 12 August 2022, the British Virgin Islands (BVI) government passed amendments to the BVI Business Companies Act (BVIBC Act), which will come into force on 1 January 2023.

A number of significant amendments are being enacted and introduced to the current BVI company regulations to ensure compliance with international standards on transparency and facilitate international cooperation in combatting money laundering and other criminal activities.

The following are brief descriptions of the major amendments:

1. Annual financial returns filing requirement

Companies will be required to provide certain financial information to their registered agents in the form of an annual return. The annual return must be filed within nine months of the financial year end date or the calendar year. This requirement applies to the 2023 financial year, and the first return is expected to be made by the end of September 2024.

Registered agents are required to notify the Financial Services Commission (FSC) within 30 days of not receiving the annual return on time. When a company fails to submit its annual return to the registered agent, the Certificate of Good Standings will not be released/secured.

The information filed with the registered agent will not be made public, and the financial information in the annual return is not required to be audited.

Exemptions of this requirement apply to listed company companies, companies that file tax returns in the BVI and certain BVI-regulated entities.

2. List of directors made available to the public

Under the current Act, the details of the company directors are not made available to the public and can only be obtained through a court order or a competent regulatory authority. However, in the amendments to the BVIBC Act, the names of the directors will be available on request to registered users of the VIRRGIN system.

Information such as addresses, date of birth, nationality and names of former directors will remain private.

3. Register of Persons with significant control

The amendments establish a framework that will require the Registrar to maintain a register of persons with significant control of BVI companies, which further details will be outlined in regulations. It also provides that the regulations may contain exemptions or restrict access to certain individuals’ data.

4. Bearer shares abolished

Bearer shares will be abolished in the amendment of the Act. BVI companies will no longer be able to issue bearer shares, and existing bearer shares will be converted or redeemed into registered shares on 1 July 2023.

5. Changes to the strike-off regime

The seven-year period between being stuck off the Register and being dissolved will be abolished under the amended Act. Struck-off companies will be dissolved automatically after the Registrar publishes a struck-off notice.

The amended Act includes transitional provisions that will apply to companies that have been struck off before 1 January 2023.

6. Restoration of dissolved companies

The amendment introduces a new process for the restoration of dissolved companies. The company will be able to submit an application to the Registrar within five years of the date of dissolution to be restored if the following conditions are met:

  • The company was conducting business or in operation at the date of dissolution.
  • A licensed person has agreed to act as the registered agent of the company and confirmed that the company’s records had been updated in compliance with the anti-money laundering obligations.
  • The company pays a restoration fee and outstanding fees or penalties.
  • The Registrar is confident that restoring the company would be fair and reasonable.

Notice of the application to be restored must also be given to the Crown if any of the company’s assets were vested in the Crown upon dissolution. The company can still also be restored by court order in the following situations:

  • The company was dissolved following the completion of its liquidation.
  • On the date of dissolution, the company was not carrying on business or in operation.
  • The purpose of restoration is to initiate, continue or discontinue legal proceedings in the name of or to apply for property that has vested in the Crown to be returned to the company.
  • In any other circumstance where the court considers that it is just and fair to restore the company.

7. Voluntary liquidators to be qualified and residing in BVI

Voluntary liquidators appointed after 1 January 2023 must be BVI residents. An individual must have physically resided in the BVI for at least 180 days prior to the appointment.

To qualify as a voluntary liquidator, the individual must have the following qualifications:

  • At least two years of liquidation experience
  • Professional competence in liquidating the company
  • An appropriate professional qualification or hold an insolvency practitioner’s license issued by the BVI FSC

Voluntary liquidators will also be required to collect records kept and maintained by the company in accordance with the Act and send copies of the records to the company’s former BVI registered agent at the end of the liquidation.

8. Charitable or non-commercial business

The new Act will include separate provisions for the incorporation of a BVI company for charitable or non-commercial purposes outside of the BVI.

Additional information, such as how the company will separate its charitable or non-commercial activities from its other businesses and the region in which they will be conducted. The company must also file its audited annual financial statements with the Registrar.

Final thoughts

The BVI is one of the leading international financial centres, and the amendments made to the current BVIBC Act are intended to combat the use of financial services for money laundering and show the BVI’s dedication to meeting and exceeding international standards. For further information, feel free to contact Acclime.

About Acclime.

We are a premier provider of professional formation, accounting, tax, HR & advisory services in Hong Kong, focusing on providing high-quality outsourcing and consulting services to our international clients in Hong Kong and throughout the region.

Changes to the BVI Business Companies Act coming in 2023