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There have been certain significant amendments introduced to British Virgin Island (BVI) Business Companies Act. The amendments will come into force on 1 January 2023. The key changes relate to abolishing the use of bearer shares, disclosure of director information, filing of financial returns, striking off and dissolution of companies, restoration of struck off and dissolved companies, new qualification and residency requirements for liquidators and insolvent liquidations.
In this legal alert, we consider the amendments which are likely to immediately impact the owners or controllers of BVI companies, namely: (a) disclosure of director information to the public; (b) filing of annual financial returns, and (c) persons with significant control.
Disclosure of Director Information
BVI Companies are required to maintain an up-to-date register of directors (including details of alternate directors) and file the register of directors with the Registrar of Corporate Affairs. The names of directors of BVI companies will be publicly available on VIRRGIN (an online platform created by the BVI Financial Services Commissions (FSC)). The platform will allow any registered user to obtain information on the directors of a company (including information on alternate directors) by running a search on the company as opposed to the name of a director. However, information will be available only on current directors and information on former directors will not be disclosed. Companies who fail to file a copy of their register of directors will be subject to a minimum penalty of USD 100 and a maximum penalty of USD 5,000.
Filing of Annual Financial Returns
BVI companies will be required to disclose financial information by filing an annual financial return form with its Registered Agent (RA). As the form of the financial return is still being developed, we do not currently know the information which will need to be included. However, if the annual return is not filed within the prescribed time periods, then the RA is obligated to provide the Registrar of Corporate Affairs with details of each company which has failed to file the annual financial return. Failure to file returns within this period will be subject to a USD 300 fine and for each month that the failure continues the penalty will range from USD 200 up to USD 5000. Further, the Registrar of Corporate Affairs can strike off the company.
Persons with Significant Control
The amendments introduce the concept of “persons with significant control”. However, these recent amendments do not create any obligation to maintain a register of “persons with significant control” or to file such a register with any authorities in the BVI. Considering the global movement towards transparency, it is likely that the requirement to maintain and file the register of “persons with significant control” will be introduced by the BVI in the near future by way of supplementary legislation.
Considering the significant amendments referred to above, the owners and controllers of BVI companies should carefully consider the impact of these amendments.
Should you have any questions about this legal alert, please do not hesitate to contact Devvrat Periwal or Deepa Kokkandathil.