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Understanding the Latest Changes to the BVI Business Companies Act

Understanding the Latest Changes to the BVI Business Companies Act

The British Virgin Islands (BVI) remains a choice destination for entrepreneurs worldwide when it comes to setting up an offshore company. In recent years, the jurisdiction has seen an increase in new company registrations due to its favorable tax regime, political stability, and business-friendly laws. 

However, to stay competitive and attractive to investors, and adhere to its promise to keep the jurisdiction in line with international standards for financial reporting and transparency, the BVI government made some significant changes to its core legislation, the Business Companies Act (BCA).

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In this blog, we look at the various changes to the Act, and how they might affect your offshore company in the BVI.


What is the BVI Business Companies Act 2004?

The BVI Business Companies Act is a legal framework governing the formation, management, and operation of business companies in the British Virgin Islands (BVI)

Enacted in 2004, this Act is one of the most popular corporate laws in the world, especially for offshore companies, due to its flexibility, privacy, and favorable tax environment. It replaced the International Business Companies Act and introduced modern regulations to accommodate the evolving needs of international businesses.


Newest Changes to the BVI Business Companies Act

The latest amendments to the BVI’s Business Act were effected on 1 January 2023. Some of the changes include revised mechanisms for the dissolution and reinstatement of entities that have been struck off the BVI Register of Companies, as well as added regulatory reporting requirements.

New Regulatory Reporting Requirements

Here are the new obligations to take note of:

Maintaining Records

Companies must maintain records that sufficiently show their transactions and give a precise representation of their finances at any point in time. Although the records need not be audited or filed with any BVI regulatory authority, they must still be maintained for 5 years.

Filing of Annual Returns

BVI-registered companies must prepare an annual return that must be submitted to a company’s registered agent within 9 months after the company’s fiscal year-end. For example, a company with a financial year (FY) from 1 January 2023 to 31 December 2023 must submit its annual return by 30 September 2024.

The public cannot access the annual returns and the company’s registered agent does not need to submit the returns to any BVI regulatory authority unless specifically requested. Some BVI-registered companies are exempt from filing an annual return if they meet any of these conditions:

  • Listed on a stock exchange
  • Regulated under a BVI financial services legislation and provides financial statements to the BVI Financial Services Commission (FSC) as per the requirements of that financial services legislation
  • Submits financial statements and annual tax return to the BVI Inland Revenue Department
  • Undergoing liquidation with the provision that the exemption does not apply if the annual return is due before the liquidation process starts

Making Director Names Public

The names of company directors are now publicly available and can be searched within the BVI. However, any searches must be run against a company name instead of the name of a specific director. The personal information of directors, such as addresses, and the names of former directors, will stay private.

Beneficial Ownership Provision

The BVI government continues to consider the possible need to list the details of BVI company beneficial owners publicly. The amendments include consideration of introducing a publicly available “Register of Persons with Significant Control”, or PSC Registry.

New Company Strike-off, Dissolution, and Reinstatement Requirements

Companies can be struck off from the BVI Register of Companies for some offences, which most commonly include the failure to pay annual corporate licence fees. These are some of the prior and existing processes:

Prior Process Current Process
In the past, companies struck off would continue existing in a suspended state for 7 years. They were unable to carry on business or defend actions against them but were able to incur further liabilities.

At any time during those years, a company can be reinstated by resolving outstanding licence fees and any related penalties.

Now, companies struck off will be automatically dissolved after 90 days’ notice from the BVI Company Registry. 

However, for 5 years after the dissolution, a company that can show it was actively operating at the point of dissolution can apply for a “Fast Track” restoration process to make amends and be restored to the BVI Register.

If the restoration application is rejected, usually because the company was not considered active during dissolution, it may still be reinstated within the 5-year period via BVI court order, which is a considerably complicated and costly process.

If a company was struck off from the Register before 1 January 2023 but had not yet been dissolved, it would have been dissolved as of 1 July 2023 and been unable to qualify for the Fast Track application process.

It must, instead, apply for a court order resolution and pay any related penalties. A company facing this situation should immediately restore itself to good standing by paying off licence fees and related penalties owed.

Any assets maintained during dissolution would risk being transferred to the Crown authority, the BVI State, if they were not distributed before the dissolution took effect. Returning such assets to the company or relevant beneficiaries would require a BVI court order that can be a costly action depending on the nature of the assets and circumstances.

New Requirements for Liquidators

Company-appointed liquidators have a residency requirement where they must have lived physically in the BVI for 180 days before their appointment.

However, if a company appoints more than 1 liquidator, only one has to meet the residency requirement. This new rule only applies to liquidators appointed after 1 January 2023.

Abolishment of Bearer Shares

The recent amendments completely eliminate the issuance and maintenance of bearer shares. On July 1, 2023, any existing bearer shares were automatically converted into registered shares. These changes had minimal impact, as the use of bearer shares had already declined significantly over the years due to high maintenance costs and negative perceptions.


Let InCorp Help With Your BVI Compliance Needs

Let InCorp take care of your BVI compliance needs with ease and expertise. Our team of professionals is well-versed in the complexities of the BVI Business Companies Act, ensuring that your company remains compliant with all legal requirements. 

From annual filings to maintaining privacy and confidentiality, we have your needs covered so you can focus on growing your business. Trust InCorp to handle your BVI corporate compliance efficiently and reliably. Talk to us today to find out more!

FAQs about BVI Business Companies Act

  • The BVI Business Companies Act of the British Virgin Islands is the primary legislation that governs the incorporation, management, and operations of companies in the BVI.
  • Many companies are registered in the British Virgin Islands (BVI) due to the jurisdiction's favorable business environment, which offers a range of advantages for international businesses and investors.
  • Yes, there is. Information on companies formed in the British Virgin Islands can be obtained from the BVI Commercial Registry.

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About the Author

Alton Neo

Alton has deep technical expertise in the Singapore Financial Reporting Standards as well as hands-on experience in accounting for publicly-listed entities and growing enterprises in Singapore. Beyond that, Alton also provides expertise to fund managers and family offices on structuring.

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