BVI Business Companies Act – What You Should Know

For those wishing to do business in the BVI, understanding the BCA is essential. In today’s article, we’ll explore the BCA and its various sections in detail, so that you can make informed decisions for your BVI business. Let’s begin!

Overview of the BVI Business Companies Act

The BCA (Business Companies Act) was introduced in 2004, replacing the International Business Companies (IBC) Act 1984. Each part of this document deals with a particular aspect of business companies, such as formation, directors’ duties, meetings, accounts, and dissolution. The BCA also includes definitions of terms used throughout the legislation.

In addition to the BCA, there are a few other laws that supplement it. These include the BVI Business Companies Regulations, BVI Insolvency Act, BVI Evidence Act, Mutual Legal Assistance (Tax Matters) Act., BVI Arbitration Ordinance, BVI Financial Services Commission Act., and BVI Company Management Act.

The BCA covers a range of topics related to BVI businesses. Some of the key provisions include:

Incorporation

The BCA outlines the requirements for incorporating a BVI business. This includes filing certain forms and documents, paying associated fees, and providing basic information about the company such as its name, purpose, and directors. Additionally, the BCA does not require a company to have a BVI resident director, but they must have a registered agent and registered office in the BVI.

Corporate governance

The BCA sets out a framework for corporate governance and outlines the duties and responsibilities of directors, members, and executive officers.

Shareholder rights

The BCA provides detailed information on shareholder rights and responsibilities. This includes voting rights, receiving dividends or other distributions, inspecting the BVI business documents, and approving certain BVI business resolutions. BVI companies must also make sure that they have accurate records of their shareholders and details of their rights and obligations.

Director responsibilities and liabilities

BVI companies must have at least one director, who can be an individual or a corporate entity, including those related to the management, accounting, and financial reporting of the BVI business. Directors have certain fiduciary duties to act in the best interests of the company and can be held liable for breaches of these duties. BVI companies must also have at least one officer, who is responsible for the day-to-day management of the company.

Meetings and resolutions

The BCA does not mandate an AGM for BVI companies. However, if a company’s Memorandum & Articles of Association (M&AA) require an AGM, the company must comply. If the M&AA is silent, the company is not legally required to hold one.

Administration

Financial reporting requirements

BVI companies are required to maintain financial records that reflect their transactions and financial position, but they are not obligated to prepare or present financial reports at an AGM.

The records do not need to be filed with any BVI authority but must be kept for at least five years and made available upon request by competent authorities.

Annual filing requirements

Most BVI companies must file an annual return with the BVI Registry of Corporate Affairs. However, not all companies are required to file audited accounts. Only certain entities, such as regulated financial institutions or those conducting “relevant activities” under the Economic Substance Act, may be required to submit economic substance filing, financial statements, or audited accounts.

The BCA requires certain entities (e.g., regulated BVI businesses and those under the Economic Substance Act) to file annual returns and other periodic documents with the BVI Registry of Corporate Affairs. This includes financial statements, audited accounts, and reports on any material changes in the BVI business affairs.

Liquidation and dissolution

BVI companies can be voluntarily liquidated or dissolved by their directors and shareholders or may be involuntarily liquidated or struck off by the Registrar if they fail to meet certain compliance requirements. The voluntary liquidation process is initiated when a company is a solvent and its directors declare that it can meet its liabilities. On the other hand, involuntary liquidation typically occurs when a company is insolvent or fails to comply with statutory obligations.

The BCA provides a structured and transparent liquidation and dissolution process, with oversight from the BVI courts when required.

Amendments to the BVI Business Companies Act

What is an amendment?

An amendment is a change or modification made to an existing law, agreement, or other document. The purpose of an amendment is to revise or update the original document to reflect changing circumstances or to address issues that were not adequately addressed in the original version.

Amendments are typically subject to a formal voting process and may require a certain level of approval before they can be added to the original document.

Notable amendments of the BCA so far

Since its enactment in 2004, the BVI Business Companies Act (BCA) has undergone more than 20 amendments to enhance corporate governance, improve transparency, and foster compliance with evolving international regulatory standards.

Some of the most significant amendments to the BCA include:

2005 Amendment: Introduced the concept of a “registered agent” as a key compliance requirement, ensuring that all BVI companies have a designated representative within the jurisdiction.

2009 Amendment: Required BVI companies to maintain registers of directors and file a Register of Members with the Registered Agent. However, the beneficial ownership register was not yet public, and disclosure was limited.

2012 Amendment: Introduced stricter record-keeping obligations. Financial records must be sufficient to explain transactions and accurately reflect a company’s financial position.

2015 Amendment: Allowed for the re-domiciliation (continuation) of foreign companies into and out of the BVI. This provided flexibility for companies seeking to relocate their jurisdiction while maintaining legal continuity. It also clarified directors’ ability to delegate duties.

2018 Amendment: Introduced the register of charges. Charges over company assets could be publicly recorded for better transparency. Additionally, updates were made to mergers and consolidations, streamlining corporate restructuring processes.

2022 Amendment (BVI Business Companies (Amendment) Act, 2022): One of the most significant updates in recent years, this amendment introduced:

• New annual return filing requirements (effective January 1, 2023) to enhance compliance.
• Public access to certain company information, including directors’ details at the BVI Registry.
• Changes to the company strike-off and dissolution process, requiring dissolved companies to be automatically wound up after 5 years.

2023 Amendment: Abolished bearer shares.

BVI Business Companies (Amendment) Act, 2022

On January 1st, 2023, the BVI Business Companies (Amendment) Act, 2022 came into effect. This update serves to reinforce BVI’s commitment to establishing a legally stable corporate atmosphere and introducing key changes related to the following matters:

Assess to director’s names

Previously, the information regarding BVI company directors was not accessible to the public.

As of January 1, 2023, access to the company’s register of directors will be available upon request to the Registrar. Nevertheless, the search will only disclose the names of the directors. All other personal data such as birthdate, nationality, or address shall remain confidential to the public.

Names of former directors who have resigned before January 1, 2023, will not be disclosed publicly.

Register of Persons with Significant Control

The Amendment outlines a basic structure for the development of the Register of Persons with Significant Control, where companies may need to record and present information to the Registrar concerning those who possess significant control over the company.

Strike-off regime

The Amendments put an end to the seven-year strike-off period. Under the new requirements from 1 January 2023, when the Registrar believes that a company should be struck off for a variety of reasons (e.g., failure to pay annual fees or the company has ceased to carry on business), they may issue a notice, stating that the company will be struck off unless it shows cause to the contrary.

The company has 90 days from the date of notice to provide evidence demonstrating why it should not be struck off. If the Registrar is not satisfied with the evidence provided, the strike-off process may be initiated.

The introduction of this new regime poses the danger of companies being struck off, as there is a drastically shortened time frame for struck-off entities to be dissolved.

Restoration regime

Starting 1 January 2023, the Amendment will come into effect and implement a set of restoration processes as follows:

In the five-year period after dissolution, a BVI company can apply to the Registrar for administrative restoration provided they meet certain qualifying criteria.

• The company was actively conducting business operations at the date of its striking-off and dissolution.
• The registered agent has agreed to serve and confirmed that the company’s corporate records and due diligence have been fully updated.
• The company pays all necessary fees and penalties due to the BVI Registry
• The company has requested approval from the Financial Secretary to reclaim any property that has been vested by the Crown.
• The Registrar is satisfied that it would be fair and reasonable for the company to be restored to the Register.

If a BVI company applies for administrative restoration within 12 months of its dissolution date, the administration fee is $700. However, if their application takes longer than one year to file then the fee will be raised to $1,600.

The Amendment also specifies a way to restore through Court Order; further details can be found here.

Bearer shares regime

The Amendment brings an end to the bearer share regime, giving current bearer shareholders until June 30th, 2023 to decide between redeeming their shares or converting them into registered shares.

After July 1st, 2023 any bearer shares that remain will be eliminated and automatically transformed into registered shares.

Record maintenance procedures and annual return filing

The new amendment necessitates that companies must present an annual return to their registered agent within nine months of the company’s fiscal year-end.

Companies that do not submit their annual returns on time will be subject to a penalty of US$300 for the first month and US$200 per month thereafter, up to a maximum sum of US$5,000.

New fee structure applicable to the registration and annual administration of BVI business companies

As of January 1, 2023, the BVI government has raised its charge for company registration and yearly renewal to the following rates:

• For companies authorized to issue up to 50,000 shares: US$550
• For companies authorized to issue more than 50,000 shares: US$1350

The latest update: BVI Business Companies (Amendment) Act, 2024

The BVI Business Companies (Amendment) Act, 2024 (effective 2 January 2025) introduces several significant changes to the BVI Business Companies Act, aimed at enhancing corporate governance, transparency, and compliance. Key amendments include:

Strengthened Beneficial Ownership requirements

Under the new amendments, BVI business companies are now required to verify and file beneficial ownership information within 30 days of any changes. Previously, while companies were expected to maintain beneficial ownership records, this information was not required to be reported in real time.

The 2024 amendment now makes it mandatory for companies to file these details with the appropriate regulatory authorities. Companies that existed before the enactment of this law will have a six-month grace period to comply with these new regulations.

Mandatory filing of register of members

The amendment also requires all BVI business companies to file a register of members with the Registrar within 30 days of incorporation or continuation. Any changes to the register that occur after must be reported within 30 days. However, some exemptions apply, especially for publicly listed companies and investment funds, which already adhere to separate legal requirements.

Appointment and registration of first directors

A newly incorporated BVI company must appoint its first directors within 15 days of incorporation. Once appointed, the company must file the register of directors within 15 days of these appointments. New companies must now promptly establish their governance structures and regulatory authorities will have access to updated information on company leadership. By making this a legal requirement, the BVI strengthens its corporate governance framework and enhances accountability within registered entities.

Extended deadline for annual return filings

The amendments introduce flexibility in the annual return filing process by allowing the Financial Services Commission (FSC) to grant filing extensions of up to nine months in total. Previously, strict deadlines were applied, but this change acknowledges that certain businesses may require additional time to comply.

As an initial measure, the BVI Financial Services Commission announced an extension for filing annual returns in the latest amendment. Companies that were initially required to submit their first annual returns by 30 September 2024 (i.e., those with a financial year-end of 31 December 2023) now have until 30 June 2025 to comply.

Late filing penalties start at $300 for the first month and increase progressively.

Duty to cooperate with authorities

A critical update in the 2024 amendment is the explicit duty of companies to cooperate with the Registrar, inspection bodies, competent authorities, and BVI law enforcement agencies. This provision ensures that companies provide requested information promptly to assist with investigations, regulatory compliance checks, and financial crime prevention. However, an exemption exists for cases where legal professional privilege applies, safeguarding attorney-client confidentiality in legal matters.

Read more about the BVI Business Companies Amendment Act 2024 here.

Conclusion

The BVI Business Companies Act (BCA) continues to evolve, with the 2024 amendment reinforcing transparency, governance, and compliance. Among the changes, key requirements include stricter beneficial ownership reporting, mandatory filings, and enhanced regulatory cooperation, ensuring BVI remains a reputable business hub.

Staying compliant is crucial to avoid penalties and operational disruptions. If you have any questions about this matter, please do not hesitate to contact us via service@bbcincorp.com. Contact us today to keep your BVI business up-to-date and fully compliant.

This article is intended to provide a comprehensive overview of the BVI Business Companies Act and its accompanying Amendments. This information is not intended to replace legal advice and should be used with caution.

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