Updates in the BVI Business Companies (Amendment) Act

The BVI Business Companies (Amendment) Act 2024, proposed by the BVI Financial Services Commission, introduces significant updates to the compliance and governance framework for companies incorporated in the British Virgin Islands (“BVI”). These amendments align with evolving international standards to enhance transparency, accountability, and regulatory compliance.

Below is a summary of the key changes and their implications for businesses:

1. Register of Members (“ROM”)

Currently, Companies are required to maintain a ROM with the following details:

• The date each shareholder held or ceased to hold shares.
• The number and class of shares held by each shareholder.
• The shareholder’s name and residential address (for individuals) or name, registration number, and registered office (for corporate entities).
• Voting rights attached to the shares (if not in the company’s Memorandum & Articles of Association).

When the Bill is introduced, the ROM will also have to include the following information with any “nominee shareholder”:

• the name and address of the nominator; and
• the date on which the nominee shareholder ceased to be a member; and
• the date on which a person ceased to be a nominator.

Filing requirements

Currently, there is no requirement to file an ROM with the BVI Registry although a Company can voluntarily elect to do so (this usually occurs when shares are charged, resulting in an annotation being made on the ROM).

When the Bill is enacted, Companies will have to file a copy of their ROM with the BVI Registry. The Registry ROM must be filed:

• within 6 months of the Bill being brought into force;
• within 14 days of any change being made;
• when a foreign company continues into the British Virgin Islands (the “BVI”); and
• within 14 days of a Company’s incorporation – a newly incorporated Company cannot commence business until this filing has been made.

The BVI Registry will not issue a certificate of good standing (see below for further details) to any Company that has not complied with these new filing requirements and a newly incorporated Company cannot commence business until its ROM has been filed with the Registry.

The new ROM filed with the Registry will not be available for public inspection. Access will be limited to:

• the Company;
• its registered agent;
• anyone the Company has authorised (in writing);
• a competent authority, exercising its powers as a regulator of a financial services business, tax administrator, or to deal with a matter for which it has authority under an enactment (a “Competent Authority”); and
• law enforcement agencies.

2. Register of Directors (“ROD”)

Currently, Companies must maintain a ROD that includes:

• the date each director is appointed/ceases to be a director;
• each director’s name, residential address, correspondence address, date of birth, place of birth, and nationalities, if they are a natural person; and
• each director’s name and registration number, registered office, date of incorporation, and place of incorporation if they are a corporate entity.

When the Bill is introduced, any person who is licensed by the BVI Financial Services Commission (“BVI FSC”) to provide director services and acts as a director of a company, the company will be required to indicate the capacity in which the director is acting (whether in a corporate or individual capacity and file this information with the Registry).  The ROD will have to also have to include the following information:

• if a director is acting in their capacity as nominee, the name and address of each nominee director and when they cease to be a director; and
• if any person has nominated a nominee director, the name and address of each nominator and the date they cease to be a nominator.

Filing requirements

Companies are currently required to file a copy of their RODs with the BVI Registry within:

• 30 days of any change being made to it;
• 21 days of a foreign company being continued into the BVI; and
• 21 days of a Company’s first director(s) being appointed, who must be appointed within 6 months of a Company being incorporated.

When the Bill is enacted, the requirements will be as follows:

• within 30 days of any change being made to it;
• as soon as a foreign company continues into the BVI; and
• within 14 days of a Company’s first director(s) being appointed, who must be appointed within 14 days a Company being incorporated.

3. Register of beneficial ownership (“RBO”)

At the moment, every company must keep and maintain information about the beneficial owners of a Company and enter into the Beneficial Ownership Secure Search System (“BOSS”).

The following information about each beneficial owner is currently files into BOSS:

• their name, residential address, date of birth, place of birth, and nationalities, if they are a natural person; and
• their name, registration number, registered office, date of incorporation, and place of incorporation, if they are a corporate entity (e.g. if the Owner is a regulated entity).

When the Bill is enacted, Companies will have to collect, maintain, prepare a register, and file with the Registry the beneficial owner information. These new requirements will be in addition to the existing obligation to file information with BOSS.

Definition of a beneficial owner

A beneficial owner is defined as:

• in the case of a legal person (other than a listed company), a natural person who:
  • ultimately owns or controls, directly or indirectly, 10% or more of the shares or voting rights in the legal person (this was previously 25%);
  • holds, directly or indirectly, the right to appoint or remove a majority of the board of directors of the legal person; or
  • otherwise exercises control over the management of the legal person;
• in the case of a limited partnership, a natural person who:
  • is ultimately entitled to or controls, directly or indirectly, 10% or more share of the capital or profits of the partnership or 10% or more voting rights in the partnership; or
  • otherwise exercises control over the management of the partnership;
• in the case of a trust:
  • the trustee; the settlor or other person by whom the trust is made; the protector (if any); the beneficiaries or class of beneficiaries with a vested interest in the trust at the time of or before distribution of any trust property or income; and any other natural person exercising ultimate effective control over the trust (including through a chain of control or ownership).

Filing requirements

Currently, information filed with BOSS is maintained by the registered agent on a secure database provided by the BVI International Tax Authority, which can only be disclosed to a Competent Authority.

When the Bill is passed, Companies will have to file their RBO with the BVI Registry:

• within 6 months of the Bill being brought into force;
• within 14 days of a Company’s incorporation;
• when a foreign company continues into the BVI; and
• within 30 days of any change being made to it.

Access to the RBO will be limited to:

• the Company;
• its registered agent;
• anyone the Company has authorised (in writing);
• a Competent Authority; and
• law enforcement agencies.

Once the RBO has been filed, the BVI Registry shall adopt such measures as are considered necessary and adequate to verify the Owner’s Information and ensure it is kept up to date, pursuant to the Anti-money Laundering Regulations and Anti-money Laundering and Terrorist Financing Code of Practice (Revised Edition 2020).

When the BVI Registry discharges this verification duty, a Company is bound to provide:

• information that is within its domain;
• documents in its possession or under its control (or the control of its
  subsidiary); and
• any other material that the Company has access to and authority to
  produce.

The filing requirement for beneficial ownership information will not apply to listed companies or funds licensed in the BVI.

4. Certificate of good standing

As we advance, the BVI Registry will only issue a certificate of good standing to a company that has satisfied that:

• the company has filed a copy of its ROM;
• the company has filed a copy of its ROD;
• the company has filed a copy of its RBO; and
• the Registrar has not received any notification that the company has failed to file its annual financial return (“AFR”).

5. Dissolution and Restoration Processes

Dissolution:

When the Act was last amended on 1 January 2023, it made significant changes to how a Company could be struck-off and dissolved (“Dissolved”). There were some practical issues involving the Registry system and the timing of the notices placed in the BVI Gazette and these have been updated and streamlined.

In light of this, the Bill introduces a new dissolution process, whereby the BVI Registry will (unless the Company shows cause to the contrary):

• issue a notice to the Company via its registered agent (the “First Notice”), confirming it will be Dissolved on a specific date (the “Dissolution Date”);
• publish a notice in the BVI Gazette, of its intention to dissolve the Company;
• dissolve the Company on the Dissolution Date; and
• publish a notice of the dissolution in the BVI Gazette.

Under the new dissolution process, a Company will be Dissolved on the Dissolution Date, which will be 90 days from the date of the First Notice.

Importantly, a Company can also be dissolved if it fails to file any information that it is required to be filed under BVI law and/or it fails to pay any penalty imposed on it when it becomes due.

Restoration:

The conditions for the restoration of struck-off and dissolved companies have been amended to make it more efficient to restore such companies to the Register.

As part of the new restoration processes, the Company’s registered agent needs to submit a declaration, confirming that it has received all necessary company records and documents for the Company including a copy of the ROM, ROD, RBO, and updated customer due diligence information.

A Company will also be allowed to be restored if the registered agent provides an undertaking that it will receive all the company records within 14 days of the restoration date. If the undertaking is not satisfied, the Company will be dissolved again.

6. Penalties for Non-Compliance

The new Bill also increases some of the penalties for non-compliance and provides a new consolidated schedule setting out all penalties that can be imposed under the Act.

Why These Changes Are Important

The amendments to the BVI Business Companies Act aim to:

• Improve transparency and compliance across all incorporated entities.
• Align with global regulatory standards to strengthen the BVI’s reputation as a leading offshore jurisdiction.
• Safeguard against misuse of corporate structures for illicit activities.

Companies should proactively review these updates and adjust their compliance frameworks to meet the new requirements.

Conclusion

The BVI Business Companies (Amendment) Act 2024 introduces significant updates that will impact all companies incorporated in the BVI. These changes aim to enhance transparency, improve compliance, and align with evolving international standards. Key amendments include stricter requirements for filing registers of members, directors, and beneficial ownership, as well as streamlined dissolution and restoration processes. It’s critical for companies to review these amendments and update their compliance practices to avoid penalties or disruption to business operations.

Contact Us

If you need guidance on these changes or professional advice on incorporating a company in an onshore or offshore jurisdiction, we’re here to assist. Request a free consultation to learn more about our services. Once we understand your business needs, we’ll create a bespoke proposal outlining how we can help you meet your objectives and ensure compliance with the new regulations.