The process does not have to be complicated when preparing for the voluntary liquidation of a British Virgin Islands (BVI) company that is nearing the end, or has reached, the end of its useful life. Where a company is not a regulated entity, has no liabilities, or if it is able to pay its debts as they fall due and the value of its assets equals or exceeds its liabilities, the company may be voluntarily liquidated under Part XII of the BVI Business Companies Act, 2004 (the Act). In the case of a BVI legal entity registered or incorporated later in the given year, an appointed voluntary liquidator must submit a legal entity’s final notice to avoid unnecessary registration fees for the legal entity before 30 November. The procedure for voluntary liquidation under Part XII of the Act is as follows and applies to a BVI company that is not a regulated entity: And within 30 days of commencement of liquidation (being the date of filing his notice of appointment), the liquidator is required to advertise notice of his appointment in at in a newspaper published in the BVI.
The UK Government has now implemented legislation to create full transparency regarding the ownership by non-UK legal entities of title to property in the UK.
Things are moving fast when it comes to increasing the transparency and effectiveness of company administration in the offshore centres. British Virgin Islands legislative council has now passed amendments to the BVI Business Companies Act, 2004.
New obligations on BVI entities holding property or land in the UK are now in force with the introduction of a Register of overseas entities and beneficial owners.
Fund clients are reminded about the 30 June 2022 filing deadline to submit the required information. Please see our overview below. v Jump to the requirements summary table. v Financial statements Pursuant to the Securities and Business Act (Revised) (SIBA), the Mutual Funds Regulations (Revised) and the Private Investment Funds Regulations, 2019, all BVI private, professional, public, and private investment funds (together Funds) and all investment business licence holders (Licensees) are required to have an appointed auditor for the purposes of auditing their financial statements, unless an exemption has been expressly sought and granted. All Funds and Licensees are required to submit a copy of their audited financial statements to the Financial Services Commission (FSC) within six months of the end of each financial year. Thus those with a financial year ending 31 December 2021 are required to submit their audited financial statements for the 2021 financial year to the FSC on or before 30 June 2022. Under SIBA’s ‘light touch’ regimes governing approved funds, incubator funds and approved managers, these are not required to appoint an auditor and are required only to submit a copy of their financial statements to the FSC within six months of the end of each financial year. Accordingly, those with a financial year ending 31 December are required to submit their financial statements for the 2021 financial year on or before 30 June 2022. Fund Types / Fund Managerswith 31 December financial year-end Audited accounts Unaudited accounts Mutual FundAnnual Return Private fund 30 June 2022 / 30 June 2022 Professional fund 30 June 2022 / 30 June 2022 Public fund 30 June 2022 / 30 June 2022 Incubator fund / 30 June 2022 /
The British Virgin Islands has long been a jurisdiction of choice for the establishment of companies for use as asset holding vehicles. The development of the inter-connected global economy has led further to the widespread adoption of BVI companies as private equity or investment funds. Today, the BVI is home to over 2,000 registered and recognised investment funds.
The BVI’s popularity was earned through its effective regulatory platform that is aligned to global regulatory standards, and its immensely flexible funds framework.
Scrutiny faced by directors of companies for possible breaches of their fiduciary duties has been further clarified by the Privy Council in a case involving actions of a director leading up to the insolvency of the company. Key takeaways regarding duties are: Ultimate responsibility for the actions of a company rests with the directors. The Privy Council dealt with the following questions regarding the actions of the director in question, Ms. Ningning Chen (Ms Chen), co-incidentally one of the Peoples’ Republic’s richest women. When does a director’s duties to a company end where insolvency (voluntary or otherwise) is in the mix? In an insolvency scenario, in whose interest should a director be acting? Case facts to give some context to the issues … The matter involved a payment made on a shipping contract referred to as a “freight forwarding agreement” (FFA) entered into by Pioneer Freight Forward Limited (PFF) a BVI company, at a time when PFF was trading insolvent. PFF had, under the FFA, and under the authority of Ms Chen, although not directly by her, paid the amount of USD13m to a creditor. The Privy Council found this payment to have favoured one creditor over another. The Privy Council rationalised that until PFF was formally in liquidation, and thereafter by implication until the authority over the bank accounts had been transferred to the appointed liquidators, Ms Chen had a fiduciary duty to act honestly, in good faith, and in what she believed to be in the best interests of PFF. Specifically, she had a duty to the creditors of PFF given that PFF was trading insolvent and then after being placed in liquidation, was insolvent. A director cannot prefer one creditor over another
Further to the BVI Business Companies (Amendment of Schedule 1) Order, 2021, a fee of USD75 will be introduced for filing of the first register of directors. Please note that a filing fee of USD75 will be added to the incorporation of all BVI companies incorporated on or after 1 Jul 2021.
The Approved Fund Manager regime in the British Virgin Islands has been in force since 2012 and was designed to cater to start-ups, but is equally attractive to established small and medium-sized funds. Until recently we could count the number of AFMs in the structures we administer on one hand. However this has changed rapidly over the last 6 months. Increasingly we find this regime to be of interest to managers of global funds or where managers require an additional leg to their investment advisory function, often for specific investment purposes.
The International Tax Authority has informed all Registered Agents and legal entities with reporting obligations under the Economic Substance (Companies and Limited Partnerships) Act, 2018 and the Beneficial Ownership Secure Search System Act, 2017 that the Economic Substance portal as integrated with the Beneficial Ownership Secure Search system (BOSS(ES)s) went live on 12 June 2020.
FATCA: BVI, Bermuda and Cayman Islands – The IRS has provided for an extension of time for Model 1 IGA jurisdictions to provide their 2019 FATCA data to the United States competent authority. Currently the deadline…
NEW Cayman Islands CRS Compliance Form…
In line with other offshore jurisdictions and in order to comply with commitments to the EU, the BVI has introduced a ‘private investment fund’ regime by enacting the Securities and Investment Business (Amendment) Act, 2019 and the accompanying Private Investment Funds Regulations, 2019.