Get To Know BVI Beneficial Ownership Legislation (BOSS Act)

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 in combating money laundering, terrorist financing, and tax evasion.

Key provisions

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:

• 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.

30 June 2017 – Enactment of the BOSS Act

• The BOSS Act was introduced to align with global anti-money laundering (AML) and tax transparency initiatives.
• Required BVI companies and limited partnerships to collect and maintain beneficial ownership information.
• Established the Beneficial Ownership Secure Search System (BOSS) as a central database for storing this information.
• Access to the database was restricted to authorized BVI authorities.

1 January 2019 – Economic Substance (ES) Act Integration

• The BVI Economic Substance (Companies and Limited Partnerships) Act, 2018 came into effect.
• Required BVI entities conducting relevant activities (e.g., banking, insurance, fund management, headquarters, shipping) to report their economic substance details.
• The BOSS System was expanded to include economic substance data.
• 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, expenditures, and physical presence in the BVI.

1 July 2021 – BOSS (Amendment) Act, 2021

• Strengthened compliance requirements for beneficial ownership reporting.
• Introduced stricter penalties for non-compliance with reporting obligations.
• Enhanced data-sharing mechanisms between BVI authorities and international regulators.

1 January 2022 – Public Access Discussions Begin

• Following global pressure (EU, OECD, FATF), the BVI government explored making certain beneficial ownership information public.
• Discussions centered around transparency while balancing data privacy.

2023 – Court Ruling on Public Access to Beneficial Ownership Data

• The EU Court of Justice (ECJ) ruled that public access to beneficial ownership registries was a violation of privacy rights.
• BVI and other offshore jurisdictions delayed full public disclosure, pending further legal reviews.

1 January 2024 – BOSS (Amendment) Act, 2024

• Major amendments were made to the BOSS Act to enhance regulatory compliance and enforcement.
• Introduced key changes to Sections 2, 10, and 13.
• Section 10 changes (related to enforcement and access controls) will come into effect on 1 January 2025.

2 January 2025 – Implementation of Section 10 Amendments

• The amendments to Section 10 will officially take effect.
• Expected to enhance enforcement mechanisms, including increased access control, penalties, and regulatory oversight of beneficial ownership data.

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 the 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 (BO) is an individual who has ultimate ownership or control over a legal entity, either directly or indirectly.

The BO of a BVI company is defined as a person or entity that meets one or more of the following conditions:

• Directly or indirectly holds a minimum of 10% of shares or voting rights.
• Has the ability to appoint or remove the majority of the board members.
• Exercises substantial control or influence over the company’s operations.

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 (companies exempt from certain reporting requirements under specific conditions);
• 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

Existing and new companies must identify the registrable beneficial owners within the companies and inform your RA about your beneficial owners and registrable legal entities, referred to as the “prescribed information.”

Existing companies formed before 2 January 2025 must submit these documents before 30 June 2025:

• Register of Beneficial Owners (new form);
• Register of Members and Share Ledger (updated information on nominators);
• Resolution of Directors approving the update and filing of Registers by the Registered Agent (new form)

New companies incorporated from 2 January 2025 onwards must submit the paperwork below simultaneously with the incorporation documents:

• BVI Instruction Sheet (new form);
• Beneficial Owner Declaration (new form).

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. Any changes to the beneficial ownership must be reported to the authorities within 15 days of the change occurring.

If you fail to comply with the requirements of the BOSS Act, you might be subject to penalties and sanctions, with the fine amount now reaching up to US$75,000 for non-compliance 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 follows:

For beneficial owners

• The full legal name (first and last name);
• Date of birth;
• Proof of nationality or citizenship;
• Residential address, including street address, city, state/province, and country;
• A description of the nature and extent of the beneficial owner’s interest in the legal entity, which includes the percentage of shares or voting rights they hold or any other relevant information that demonstrates their ownership or control.

For registrable legal entities

For each registrable legal entity, the following information is required:

• Company particulars: Full legal name, incorporation number, date of incorporation, current status, registered address, and details about the company’s stock exchange listing (if applicable)
• Jurisdiction where the entity is incorporated or formed;
• Proof of the entity’s registrable legal entity status (e.g., certificate of incorporation);
• Regulated status: Indication of whether the entity is a foreign-regulated person or a sovereign state;
• Confirmation of whether the company is engaged in a relevant activity (for the purposes of the BVI Economic Substance Act);
• Additional supporting information regarding the entity’s tax residency status may also be required.

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 the 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;
• Jurisdiction where the parent company is incorporated or formed;
• Information about the ownership structure of the parent company (including the percentage of ownership held by other entities or individuals);
• If the parent company has beneficial owners, their full name, residential address, date of birth, nationality, and nature and extent of their beneficial interest must be disclosed;
• Information on the relationship between the parent company and the registrable legal entity, including the role of the parent in governance or control of the entity.

Exempt person

Exempt persons are not subject to the provisions of the BOSS Act, 2017. This category includes the following types of entities:

• Mutual Funds: 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;
• Publicly Listed Companies: Entities with securities listed on a recognized stock exchange, provided they meet specific criteria (such as being engaged in non-relevant activities within the BVI);
• Subsidiaries: Entities that are subsidiaries of other entities falling under the two exemptions mentioned above;
• BVI Licensees: Entities holding a BVI licensee status under the Regulatory Code, 2009.

Entities classified as exempt persons do not need to submit information about beneficial owners. However, they are still obligated to report relevant activities under the BVI Economic Substance rules if applicable.

Final thoughts

The BVI BOSS Act continues to evolve, especially with the 2024 amendments, which tighten compliance and enhance enforcement. The push for a public register of beneficial owners remains a future consideration, as international standards evolve.

It’s crucial for companies operating in the BVI to stay informed and ensure compliance with these requirements. If in doubt, seeking professional assistance can help you navigate these complex regulations.

For any further questions regarding the BVI BOSS Act, don’t hesitate to drop us a message via service@bbcincorp.com or chat with our support team for prompt assistance.

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