The British Virgin Islands (BVI) Business Companies (Amendment) Act 2024 received assent and was gazetted. It is to be brought into force at a future date.
The Act formed part of a legislative package of seven bills to address recommendations from February’s Mutual Evaluation Report by the Caribbean Financial Action Task Force (CFATF). The other Bills comprised the Banks & Trust Companies (Amendment) Bill, the Insolvency (Amendment) Bill, the Insurance (Amendment) Bill, the Trust (Amendment) Bill and the Proliferation Financing Prohibition (Amendment) Bill.
The Business Companies (Amendment) Act was designed specifically to address the CFATF evaluation report, which found the BVI only partially compliant on Recommendation 24 (Transparency and beneficial ownership of legal entities), Recommendation 26 (Regulation of financial institutions) and Recommendation 28 (Regulation of non-financial businesses and professions).
The key changes under the Amendment Act are as follows:
· Register of directors – the register of directors of a company, including licensed professional directors, is filed with the BVI Registrar of Companies within a reduced time period of 15 days of a company’s incorporation or its continuation into the BVI.
This will not be made publicly available at present but access to the register of directors will be expanded to include the company, the company’s registered agent, a competent authority and
a law enforcement agency.
Existing companies and companies continuing into the jurisdiction before the Act comes into force will have a six months’ grace period. Failure to comply will result in a penalty of USD600 for the first three months and USD800 for the following three months, after which the company will be struck off.
The first registered agent of a company is required to appoint one or more persons as the first director of the company within a reduced period of 15 days of the date of incorporation of the company.
· Register of members – the register of members of a company, including information relating to nominee shareholders, must be filed with the BVI Registrar of Companies within 30 days of incorporation or continuation, or of any changes occurring. This will not be made publicly available at present.
The Amendment Act also places an obligation on the Registered Agent of a company to take reasonable measures to verify the beneficial ownership information before it is filed.
The Amendment Act clarifies that beneficial ownership includes consideration of both ownership and control:
o Beneficial owner of a company is defined as a natural person who ultimately owns or controls, directly or indirectly, 10% or more of the shares or voting rights in the legal person or 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).
o Beneficial owner of a limited partnership is defined as 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)
o Beneficial owner of a trust is deemed to be the trustee, the settlor, the protector (if any) and the beneficiaries or class of beneficiaries, whether or not trust property or income has been distributed (any other natural person exercising ultimate effective control over the trust, including through a chain of control or ownership).
· Certain companies are exempt from the filing requirement, including companies listed on recognised exchanges and BVI funds – private, professional, public, private investment, incubator and approved funds.
· Continuation or discontinuation – A company applying to continue into the BVI is required to submit the list of members at the date of the application and file any information to bring it in line with the new requirements under the Amendment Act.
A company applying to continue out of the BVI will be required to confirm that it is not subject to any regulatory action or pending litigation.
· Companies will be required to submit a ‘return’ on their affairs and an express duty on companies to cooperate with authorities and law enforcement agencies will be introduced