British Virgin Islands (BVI) is known to be a great place to do business, as its incorporation is straightforward and cost efficient. However, significant changes have been made to the BVI Business Companies Act, 2004 with the recent passing of amendments that will enter into force on 1 January 2023.
Setting up and operating a company in BVI will not be the same as before; here are some major changes:
New Strike off Regime
A BVI company can be struck off due to not having a registered agent, failure to pay license fees or because of action taken by the Registry of Corporate Affairs. Currently, a company can exist for 7 years in a suspended or limbo state after it is struck off.
During that 7-year strike-off period, a company could easily be restored by paying outstanding government fees and attending to other routine catch-up filings. If a struck-off company had not been restored after the 7-year period, it would be treated as dissolved and would need a court order to restore.
From 1 January 2023, once a company is struck off for any reason, the Registrar of Corporate Affairs will issue a notice to the company giving it up to 90 days to bring itself back to good standing.
If the company takes no action to regularize its status, it will be automatically dissolved at the end of the notice period. A dissolved company can, in the 5-year period post dissolution, apply to the Registrar to be restored to the register if it meets certain criteria.
Annual Financial Return
Currently, a BVI company is only required to maintain records and documentation relating to its financial transactions. With the new requirements, companies will need to file an annual return with their registered agent every year, within 9 months of its financial year-end.
If a company fails to file its annual return, its registered agent will be under an obligation to notify the Registrar and the company will be liable to pay a penalty of US$300 for the first month of non-compliance and US$200 for each month that the company remains in breach of the filing obligation, up to a maximum of US$5,000.
The Registrar may also strike a defaulting company off the register and non-compliance will be reflected on a company’s Certificate of Good Standing.
Access to Directors’ Names
Under the new amendments, from 1 January 2023 names of directors of BVI companies will become publicly available by carrying out a company search at the Companies Registry.
This will likely be carried out using the search function in the registry’s online system (VIRRGIN) or through a direct request for a search made to the registry.
Sensitive personal information on the directors will not be publicly available. Moreover, former directors’ names before the legislation came into force will not be publicly available. Alternate directors will also now be required to be included on the register of directors.
Conclusion
These major changes will have a profound impact on existing BVI companies, as well as new firms planning to set foot in BVI.
There is not much time left till the new requirements kick in. Existing companies need time to adjust, and those who plan to set up companies in BVI need to do further research.
Fortunately, Healy Consultants can help firms navigate the new terrain. We can also guide companies who want to incorporate in the BVI by providing comprehensive and tailored services according to specific needs, while adhering to the latest regulations.
Healy Consultants Group provides a wide range of corporate services across the world. Email or WhatsApp us now to find out more about our services.