A summary of changes to the BVI Business Companies Act

The amendments went into effect 1 January 2023. They include additional regulatory reporting requirements, as well as revised mechanisms for the dissolution and reinstatement of entities which have been struck off the BVI Register of Companies.

New reporting requirements

Perhaps the most significant amendments relate to corporate reporting requirements. Here is a summary of important new obligations.

• Filing of annual returns. All BVI registered companies must now prepare an annual return. The return must be submitted to a company’s registered agent within nine months following the company’s fiscal year-end. The annual returns will not be available for public consumption, nor will the company’s registered agent be required to submit the returns to any BVI regulatory authority unless specifically requested. Certain BVI-registered companies, including those listed on a stock exchange, are exempt from filing an annual return. (A detailed summary of the new annual return requirements, including exemptions, timelines and filing format, is available here.)
• Maintaining records. Companies must maintain records that adequately show their transactions and provide an accurate representation of their finances at any given time. While the records do not need to be audited or filed with any BVI regulatory authority, they must be maintained for five years.
• Director names to be made public. The names of company directors will be made publicly available and searchable within the BVI. Any searches, however, will need to be run against a company name rather than the name of a specific director. Directors’ personal information (such as birth dates and addresses), as well as the names of former directors, will remain private.
• Beneficial ownership provision in flux. The BVI government continues to consider the potential requirement to publicly list details of BVI company beneficial owners. The current amendments consider introducing a publicly available “Register of Persons with Significant Control,” or PSC Registry. The position is expected to change following the judgement of the European Court of Justice affirming privacy and data protection as fundamental human rights which must be respected and appropriately weighed when providing such access. As a result, the proposed PSC Registry may not be introduced, and PSC information may not be made available to the public, but rather only to certain interested parties.

New procedures for strike-off, dissolution and reinstatement

Companies may be struck from the Register for certain offences, most commonly for non-payment of annual corporate license fees. Here are summaries of the prior and current processes.

• Prior process. Previously, struck companies would continue to exist in a suspended state for seven years, unable to conduct business or defend any actions against them, but capable of incurring further liabilities. Any time during those years, a company could be reinstated by settling all outstanding license fees and any associated penalties.
• Current process. Not anymore. Going forward, a struck company will be automatically dissolved after 90 days’ notice from the BVI Corporate Registry. However, for a period of five years following a dissolution, a company that can demonstrate it was actively operating at the time of its dissolution may apply for a “Fast Track” restoration process to make amends and be restored to the Register. In the event that the Fast Track restoration application is rejected — generally because the company was not deemed to be “active” at the time of its dissolution — it may still be reinstated within the five-year period through a BVI court order, which is a relatively complicated and expensive process.

Important note for firms previously struck from the Register. If a company was struck from the Register prior to 1 January 2023, but had not been dissolved, it was dissolved as of 1 July 2023 and is now not be eligible to use the Fast Track application process. Instead, it must apply for a court order restoration (described above) and pay any associated penalties. A company in this position should take immediate action to restore itself to good standing by paying all outstanding license fees and related penalties.

Importantly, any assets which a dissolved company maintained at the time of dissolution are at risk of being transferred to the Crown authority (i.e. the BVI State) if they were not distributed prior to the dissolution taking effect. Return of such assets to the company and/or relevant beneficiaries will involve a BVI court order. Depending on the nature of the assets and circumstances, this can be a costly exercise.

New requirements for liquidators

Company-appointed liquidators now have a residency requirement: They must have physically lived in the BVI for 180 days before their appointment. However, if more than one liquidator is appointed, only one must satisfy the residency requirement. Liquidators appointed before 1 January 2023 are also unaffected by the new rule.

No more bearer shares

The new amendments abolish the issue or maintenance of bearer shares in their entirety. Any existing bearer shares were automatically converted into registered shares on 1 July 2023. These changes had little effect since the use of bearer shares had decreased significantly, almost entirely, over the years given prohibitive maintenance costs and negative perceptions.

It’s important to keep in mind that this article is a broad summary of the key changes to the BVI Business Companies Act. Companies incorporated in the BVI should review their operations in light of the amendments and keep abreast of any future official guidance related to annual reports and beneficial ownership reporting.