BVI entered 2016 with substantial changes to its legislation with respect to the International Business Companies incorporated there. Through amendments to BVI Anti Money Laundering Regulations, the Code of Practice and the BVI Companies Act a host of changes was introduced. While most are of technical nature, simply tuning the mechanics of company operations or plugging minor gaps in regulations, several changes are of particular importance, namely:
1) Registration of beneficial owners with the Agent in the BVI
2) Tightening record-keeping requirements
3) Maintaining and filing a formal register of directors
Registration of beneficial owners with the Agent in the BVI
Previously, registered Agents in the BVI often relied on their business introducers (subject to certain conditions, such as being regulated in their own jurisdictions or being members in professional associations) to conduct all the relevant due diligence and hold the relevant information about the ultimate beneficial owners, sometimes including even their identity. All introducers had to do was promise to provide them on request. This practice made it difficult for authorities to promptly access such information on demand, leading to criticism from various international sources (such as the Organisation for Economic Co-operation and Development – OECD and The Financial Action Task Force – FATF). Following the amendments, registered Agents in the BVI are obliged to collect and hold the following information on file in the BVI:
While these details do not enter public domain upon being received by the Agent, it is certainly much more accessible to both BVI authorities and possibly other parties (e.g. hackers or unscrupulous employees). It is now therefore more important than ever to be very careful when choosing an Agent in the BVI.
Agents are certain to follow these rules as non-compliance carries fines and penalties for them.
While BVI companies have already had obligations to maintain records that:
1) are sufficient to show and explain the company’s transactions and 2) at any time, enable the financial position of the company to be determined with reasonable accuracy
Following the amendments, the companies will have to keep not only records, but all the underlying documentation (includes invoices, contracts etc.) relating to all payments and sales/purchases as well as assets and liabilities. The records and underlying documents are to be kept for a minimum of 5 years.
Records are still permitted to be kept outside of BVI, however companies must provide a name and address of a person who is responsible for keeping the records and documentation.
Breaching this requirement carries a penalty of USD 50,000 on the company.
Register of Directors
Under old regulations BVI companies had to maintain a basic register of Directors and track all the appointments and resignations. The register was to be filed with the Agent in the BVI. Under new regulations the register of directors is required to contain more of the Directors’ particulars (especially individuals), such as full name (and any former names), postal and residential addresses, date of birth, nationality (all, in case there are multiple) and occupation. Furthermore, registers of directors are to be filed with the Registrar, although they will not be publicly available, unless a company elects it to be.
Thus we recommend clients to hold a review of all relevant BVI directorships to ensure they are still fit for purpose.
Other notable changes include:
- Shortening the grace period during which a struck off company can be restored, from 10 to 7 years. After expiry of 7 years the company will be deemed dissolved.
- Companies are now required to file updated registers of charges with the Agent in the BVI within 14 days of any changes.