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In this article, we will provide you with an in-depth understanding of the BVI’s Beneficial Ownership Legislation, exploring its important features and offering comprehensive information. Let’s explore further!
Background of the BVI BOSS Act
The BOSS Act was enacted by the BVI government on 30 June 2017 as part of its commitment to international standards on combating money laundering, terrorist financing, and tax evasion.
Under the BOSS Act, BVI companies are required to collect and keep up-to-date information about their beneficial owners. This information includes their full name, address, date of birth, nationality, and details of their involvement with the company.
The collected information must be submitted to a centralized database called the Beneficial Ownership Secure Search System (BOSS). This database is managed by the BVI Financial Investigation Agency (FIA) and can only be disclosed to authorized entities for specified purposes in accordance with the law.
Some authorities in the BVI can offer a request for searching for information via the BOSS System are:
- The Financial Investigation Agency;
- The Financial Services Commission;
- The International Tax Authority; and
- The Attorney General’s Chambers.
Amendments to the BOSS Act
Amendments have been made to the BOSS Act in response to international standards and requirements. These amendments include economic substance information reporting, which is part of the broader BVI Economic Substance Act 2018.
Under these amendments, BVI companies and limited partnerships engaged in relevant activities are required to provide information related to their economic substance. This includes details of their activities, employees, expenditure, and physical presence in the BVI.
To assess whether your BVI company is subject to these criteria, you can utilize our BVI Economic Substance Self-Assessment Tool.
Who is subject to the BOSS Act?
The BOSS Act applies to all legal entities that are registered in the British Virgin Islands.
A legal entity refers to all companies registered in the British Virgin Islands under the BVI Companies Act, 2004, as well as any limited partnership that has legal personality within the BVI.
Legal entities under provision of the Act are required to provide information to the BOSS system. This information is typically submitted through a Registered Agent (RA), who acts as an intermediary between the entity and the system.
The information that legal entities are required to provide includes:
- Details about beneficial owners, such as their full name, address, date of birth, nationality, and information about their involvement with the entity;
- Information about any registrable legal entities that hold an interest in the entity, including their name and the jurisdiction in which they are registered; and
- Information about the parent company of the registrable legal entity (if applicable).
What is a beneficial owner?
A beneficial owner is an individual who has ultimate ownership or control over a legal entity, either directly or indirectly.
In accordance with the BOSS Act, the definition of a beneficial owner includes the following:
- A natural person who directly or indirectly owns or controls 25% or more of the shares or voting rights in the legal entity, except for corporate entities and legal entities with securities listed on the stock exchange;
- A natural person who exercises control over the management of the legal entity, if it is a legal person;
- A partner who controls a partnership, a trustee, a settlor, or any individual performing similar functions in controlling or establishing a legal arrangement, if it is a legal arrangement;
- A natural person designated as the liquidator, administrator, or administrative receiver of the entity, if it is a corporate or legal entity undergoing insolvent liquidation, administration, or administrative receivership as per the BVI Insolvency Act, 2003;
- A creditor who appoints a receiver holding at least 25% of the shares or voting rights in the corporate or legal entity;
- A natural person who is an executor or representative of a deceased shareholder’s estate, if the deceased would otherwise qualify as a beneficial owner;
- A joint owner in corporate or legal entities where multiple individuals have joint qualifying interests.
What is a registrable legal entity?
As defined by the BOSS Act, a registrable legal entity is an entity that meets one of the following criteria:
- It would be a beneficial owner of the entity if it were an individual;
- It is an exempt company;
- It is a company with its securities listed on a recognized stock exchange;
- It is a sovereign state or a subsidiary wholly owned by a sovereign state;
- It is a licensee or a foreign-regulated individual or entity as specified in the BVI Anti-Money Laundering Regulations 2008.
What are the requirements under the BVI BOSS Act?
If your company is a legal entity falling under the provision of the Act, you must fulfill the following obligations:
- Notify the Registered Agent (RA) about beneficial ownership: You must inform your RA and disclose information about your beneficial owners and registrable legal entities, also known as the “prescribed information”.
- Submit information to the BOSS System: The “prescribed information” must be submitted to the BOSS system within 15 days of the entity’s incorporation or registration. The RA is responsible for collecting and submitting this information on behalf of the entity.
- Maintain records and report changes: You must maintain accurate and up-to-date records of your beneficial ownership information for a minimum of five years. Additionally, any changes to the beneficial ownership must be reported to the authorities within 15 days of the change occurring.
Failure to comply with the requirements of the BOSS Act can lead to penalties and sanctions, including fines and potential criminal liability for both the entity and the individuals responsible.
What information to submit?
Under the BVI BOSS Act, you are required to provide the “prescribed information” as follow:
For beneficial owner
- The full legal name of each beneficial owner, including their first name and last name;
- The date of birth of each beneficial owner;
- Proof of nationality or citizenship of each beneficial owner;
- The residential address of each beneficial owner. This includes the street address, city, state/province, and country.
- A description of the nature and extent of the beneficial owner’s interest in the legal entity. This may include the percentage of shares or voting rights they hold, or any other relevant information that demonstrates their ownership or control.
For registrable legal entity
For each registrable legal entity, the following information are required:
- Company particulars include the full legal name of the entity, incorporation number, date of incorporation, status, registered address, and information about the company’s stock exchange listing if applicable;
- The jurisdiction where the entity is incorporated or formed;
- Proof of entity’s registrable legal entity status (e.g., certificate of incorporation);
- Indication of whether the entity in question is a foreign regulated person or a sovereign state;
- Confirmation of whether the company is engaged in a relevant activity; and
- Additional supporting information may be required to demonstrate the entity’s tax residency status.
Further details on what you must file regarding relevant activities under the BVI Economic Substance Act can be found in Section 7 (c) of the BVI BOSS (Amendment) Act, 2019 (No. 8 of 2019).
For parent company of the registrable legal entity
When a registrable legal entity has a parent company, the Act may require the disclosure of information related to the parent company.
- The full legal name of the parent company;
- The jurisdiction where the parent company is incorporated or formed;
- Information about the ownership structure of the parent company, such as the percentage of ownership held by other entities or individuals;
- If the parent company itself has beneficial owners, you may need to provide the relevant details, such as the full name, residential address, date of birth, nationality, and nature and extent of the beneficial interest held by each beneficial owner; and
- Information on the relationship between the parent company and the registrable legal entity, such as the role of the parent company in the governance or control of the entity.
Exempt persons are not subject to the provisions of the BOSS Act, 2017. This category includes the following types of entities:
- Entities recognized, registered, or approved as mutual funds under the BVI Securities and Investment Business Act, 2010. This includes approved, incubator, public, private, or professional funds;
- Entities with securities listed on a recognized stock exchange;
- Entities that are subsidiaries of other entities falling under the two exemptions mentioned above;
- Entities holding a BVI licensee status under the Regulatory Code, 2009.
Entities classified as “exempt persons” do not need to submit the information of beneficial owners. However, they are still obligated to report relevant activities under the economic substance rules.
In the future, there may be a heightened regulatory emphasis on beneficial ownership reporting. This is because the BVI has committed to collaborating with the UK government to create a publicly accessible register of beneficial ownership for companies.
It is strongly recommended that you familiarize yourself with this development or seek professional assistance to ensure compliance.
If you have any further questions regarding the BVI BOSS Act, don’t hesitate to drop us a message via firstname.lastname@example.org or chat with our support team for prompt assistance.
Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.
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