The BVI government announced on 12 August 2022 that the BVI Business Companies (Amendment) Act, 2022 ("the Amendment Act") and the BVI Business Companies (Amendment) Regulations, 2022 ("the Regulations") will come into force on 1 January 2023.
The amendments are to strengthen the BVI's legal and regulatory regime and allow for continued compliance with new and emerging international standards.
The amendments include provisions addressing various parts of the BVI Business Companies Act. The key amendments are set out below.
Abolition of Bearer Shares
With the new amendments, the bearer shares regime is now completely abolished. By 1 January 2023, all existing bearer shares which have not been redeemed or converted into registered shares will be deemed converted to registered shares.
Striking-Off and Dissolution of Companies
Currently, the BVI Business Companies Act provides that where a company has been struck off the Register of companies (usually because of failing to pay the annual fees), after a period of seven years, it is deemed dissolved.
With effect from 1 January 2023, a company that is struck off the Register will be deemed dissolved on the date that the Registrar of Corporate Affairs (the "Registrar") publishes a striking off notice in the Gazette.
Restoration of Struck-off and Dissolved Companies
As of 1 January 2023, existing struck-off companies, which had seven years to apply to the Registrar to be restored to the Register, will now have a maximum of 6 months (to 30 June 2023) to apply for restoration to the Register.
However, if the period within which an existing struck-off company may be restored to the Register falls anywhere between 1 January and 30 June 2023, it is that period that will apply.
If an existing struck-off company fails to apply within the specified period to be restored to the Register, it is deemed to be dissolved on the day following the end of the specified period.
Where a company has been struck off the Register and dissolved, the Registrar may, subject to receipt of an application in the approved form and upon being satisfied that certain specified conditions have been met, restore the company to the Register.
The application to restore a company to the Register shall be made within five years of the date of the striking-off notice published in the Gazette.
New Financial Reporting Rules
Companies will be required to file an annual return which is due nine months after the end of the year to which the annual return relates. The annual return is to be filed with the company's registered agent.
The requirement for filing an annual return applies to all BVI companies, with the exception of:
- listed companies;
- companies regulated under a financial services legislation requiring the reporting of financial statements; and
- companies that file their annual tax returns and financial statements with the BVI Government's Inland Revenue Department.
Failure to file the annual return constitutes an offence and may result in prosecution or a fine against the company.
Restrictions in relation to the conduct of Commercial and Charitable or Non-Commercial Business
For incorporation of BVI companies that will engage in both commercial and charitable or non-commercial activities, people must first submit an application to the Registrar for approval.
The purpose and structure of the company's charitable or non-commercial purposes must be clearly defined and set out in the company's memorandum.
Refining of BVI Company Continuation Regime
Refinements to the BVI company continuation regime include provisions for companies wishing to continue outside the Virgin Islands to provide advance notice of such intention to its members and creditors.
Besides, a notice of intention to continue outside the Virgin Islands should be published in the Gazette and on the company's website and must include an indication of the jurisdiction to which the company wishes to continue.
Access to List of Directors
The company's list of directors will be accessible by making an application to the Registrar. Additional costs are expected for the application.
The list will relate to current directors on the company's Register of directors. The information made available will not include dates of birth, addresses or the names of former directors.
BVI Residency Requirement for a liquidator
The Amendment Act introduces a new residency requirement for a person who can be appointed as a voluntary liquidator.
A liquidator is considered to be resident in the Virgin Islands if, prior to his or her appointment as voluntary liquidator, he or she has been living physically in the Virgin Islands for a period of not less than 180 days, whether continuously or in aggregate.
Where joint liquidators are appointed, at least one of the joint liquidators shall be a person who satisfies the requirement.
Register of persons with significant control
The Amended Act introduces the framework by which the BVI government might, in the future, introduce a public register of persons with significant control. It is important to note that no changes are expected to come into force on 1 January 2023.
The BVI government previously made a commitment to introduce such a register by 2023, subject to certain caveats and qualifications.
The Amended Act provides that the Government may, by future regulations, specify the requirements for the format of such registers. It also provides that the regulations may contain exemptions or restrict access to certain person's data.
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