Things are moving fast when it comes to increasing the transparency and effectiveness of company administration in the offshore centres. British Virgin Islands (BVI) legislative council has now passed amendments to the BVI Business Companies Act, 2004 (the Act). The law will go into effect on 1 January 2023.
Annual Financial Returns
All BVI companies will be required to file an annual financial return (AFR) with their registered agent to be retained for record-keeping purposes. AFRs remain private and confidential in the hands of the registered agent, and are not for public inspection. The AFRs are required to be filed within nine months of the end of each financial year.
The first AFR’s to be filed will be for BVI companies with financial year ends on or after 31 December 2023, so no filings are required prior to the end of September 2024.
Striking off and dissolution of companies
Currently, a BVI company, usually for having failed to pay its government fees or other ongoing statutory requirements, loses its good standing and in due course it is struck off the register of companies by the BVI Registrar of Corporate Affairs (the Registrar). The Registrar under the Act allows a grace period before striking off the company of six months from the date on which the company loses its good standing.
The current seven year period between a company being struck off the register of companies and being dissolved, is abolished by the new amendments.
Once the amendments are in effect, when a BVI company is struck off the register of companies it will also be dissolved on the date the Registrar publishes the notice of the striking off in the Gazette.
any company that is currently struck off but has assets or ongoing operations, should take action now to be restored to the register of companies before the amendments come into force
In spite of transitional arrangements, new provisions relating the restoration of a struck off or dissolved company will apply for all companies. This means that any company that is currently struck off but has assets or ongoing operations, should take action now to be restored to the register of companies before the amendments come into force. In future companies should also stay up to date with their filings and fees with the Registrar in order to avoid being unintentionally dissolved.
Transitional arrangements will apply only to companies that are struck off but not yet dissolved when the amendment goes into force. The amendments introduce a new procedure for companies to apply to the Registrar within five years of being dissolved to be restored to the register of companies, upon satisfying certain legislated criteria.
The names of directors become publicly available
After 1 January 2023 (although this date it unlikely to be met technically by the BVI Financial Services Commission (FSC)), upon request and payment of a search fee, the names of a company’s directors (currently filed privately by the registered agent annually), may be made available publicly on application to the Registrar via the BVI FSC’s online platform, VIRRGIN. No other information about the directors (such as address or birth date etc) will be available publicly.
Changes for Voluntary Liquidators
The following changes take place after 1 January 2023 regarding voluntary liquidations.
- A voluntary liquidator appointed by a company after 1 January 2023 must be a resident of the BVI. One BVI resident is required where joint appointments are made, allowing one liquidator to be in the country where the company has business operations. The liquidator must be an individual.
- A voluntary liquidator appointed by a company after 1 January 2023 must be a resident of the BVI. One BVI resident is required Individuals appointed as liquidators must have at least two years’ liquidation experience, professional competence to liquidate the company and an appropriate professional qualification or hold a BVI FSC insolvency practitioner’s licence.
- Voluntary liquidators will be required to collect the records kept and maintained by the company under the Act and send copies of those records to the company’s former registered agent in the BVI at the end of the liquidation.
Clients with BVI companies should note these significant changes, and Marbury will reach out to clients with more information about the requirements for the annual financial return once this becomes available. If you have stuck off companies to restore, please contact us so that this can be arranged before the amendments come into force.
For any queries please contact your usual Marbury advisor, or contact us at info@marburys.com.