What do you need to know about the changes to the BVI companies law?
Important changes have been made to the BVI Business Companies Act, Revised Edition 2020 (the "Companies Act").
The changes have been made by the BVI Business Companies (Amendment) Act, 2024 (the "Amendment Act") which came into force on 2 January 2025.
The changes made by the Amendment Act have been supplemented by:
- the BVI Business Companies and Limited Partnerships (Beneficial Ownership) Regulations, 2024 (the "Regulations") which also came into force on 2 January 2025; and
- guidance issued by the BVI Financial Services Commission (the "FSC") concerning the filing of beneficial ownership information under the Regulations (the "Guidance").
The reason for the changes is to ensure that the BVI stays at the forefront of evolving standards established by bodies such as the Financial Action Task Force and to maintain the reputation of the BVI as a leading offshore finance centre.
While certain of the changes are refinements of existing obligations, this advisory highlights key matters which clients should be aware of.
Register of members – new filing requirements
Under the Companies Act (as amended), subject to certain exemptions, companies are now required to file their register of members on a private basis with the Registrar of Corporate Affairs (the "Registrar"), and to file updates to the register of members on an ongoing basis.
The register of members will not be publicly available unless a company specifically opts to make it so.
Unless a company opts otherwise, the register of members will only be available to the company, its registered agent, competent authorities and law enforcement agencies.
Nominee shareholders and professional directors
Under the Companies Act (as amended), there are additional filing requirements relating to nominee shareholders and professional directors.
A nominee shareholder is a shareholder who "exercises the associated voting rights according to the instructions of a nominator without any discretion or receives dividends on behalf of a nominator". This will capture bare trust arrangements, but overall, the description of a nominee shareholder is fairly narrow in scope.
In respect of a nominee shareholder, the company must file with the Registrar (in addition to other information in the company's register of members):
- the name and address of the nominator;
- the date on which the nominee shareholder ceased to be a member; and
- the date on which a person ceased to be a nominator.
In terms of director information requirements, where a company appoints as a director a person who is licensed in the BVI to provide director services (or where an individual is appointed as a director and such individual works for, or represents, such a licensed entity), this information must also be filed with the Registrar.
A minor additional change in relation to the appointment of directors is a shortening of the initial period within which directors must be appointed following incorporation, which is reduced from six months to 15 days.
Beneficial ownership information
There is an important shift under the Companies Act (as amended) as to who has an obligation to collect beneficial ownership information.
Before 2 January 2025, this was an obligation of the registered agent of the company, who was required to collect beneficial ownership information and upload such information to a secure cloud-based portal.
Under the Companies Act (as amended), a company itself is now under an obligation to collect, keep and maintain adequate, accurate and up to date information on the beneficial owners of the company.
A beneficial owner includes (among others) any natural person who ultimately owns or controls 10% or more of the shares or voting rights in the company.
In addition, unless a company benefits from an exemption (as outlined below), a company is now under an obligation to file the beneficial ownership information with the Registrar. This filing will be made by the company's registered agent on behalf of the company. Before a registered agent makes any such filing, the registered agent is required to verify the beneficial ownership information.
Any changes to the beneficial ownership information must also be filed with the Registrar via the company's registered agent.
While the position continues to evolve and may change in the BVI and other offshore jurisdictions (see the discussion below), it will remain the case for now that the beneficial ownership information will not be accessible by the public (although similar to the previous position, competent authorities and law enforcement agencies may be able to access such information).
The Regulations introduce several new and significant obligations for all BVI companies. These include:
- a duty to take all necessary steps to identify the beneficial owners of the company (by giving notice to each of them to, among other things, confirm, correct and update beneficial ownership information); and
- a duty to maintain a record of actions taken to identify beneficial owners and obtain beneficial ownership information from them.
Exemptions concerning the filing of beneficial ownership information
There are certain exemptions from the requirement to file beneficial ownership information with the Registrar. These are outlined below.
If an exemption applies, this is only an exemption from filing and does not absolve the company from the requirement to collect, keep and maintain adequate, accurate and up to date beneficial ownership information.
Listed companies
The requirement to file beneficial ownership information with the Registrar does not apply to a listed company (being a company whose shares are listed on a recognised exchange which includes the LSE, NYSE, NASDAQ and certain other international exchanges).
The Guidance provides that the listed company must notify the Registrar of this exemption and provide the Registrar with certain information (including the name of the recognised exchange).
Investment funds
Subject to certain conditions (as outlined below), the requirement to file beneficial ownership information does not apply to the following investment funds:
- a company that is a private fund, professional fund, public fund or private investment fund recognised or registered under the Securities and Investment Business Act, Revised Edition 2020 ("SIBA"); and
- a company that is an incubator or approved fund under the Securities and Investment Business (Incubator and Approved Funds) Regulations, Revised Edition 2020.
The conditions referred to above relating to such investment funds are as follows:
- the company’s beneficial ownership information is held by:
(a) a person who holds a Category 6 investment business licence pursuant to SIBA;
(b) the company's authorised representative; or
(c) another person licensed by the FSC that has a physical presence in the BVI; and
- the beneficial ownership information can be provided to the Registrar within 24 hours of request by the person who holds such information.
The investment fund must notify the Registrar of the exemption applying to it.
In addition, under the Companies Act (as amended), where a person holds beneficial ownership information pursuant to the above conditions, the investment fund must file with the Registrar the name and address of such person.
Subsidiaries
A subsidiary of a legal entity (the "parent entity") where the parent entity is itself subject to the Regulations will be exempt from the requirement to file beneficial ownership information.
The Guidance clarifies that this exemption will apply where the parent entity has filed beneficial ownership information under the BVI regime or is exempted from such filing.
In order for the subsidiary exemption to apply, the parent entity must hold, directly or indirectly, 75% or more of the shares or voting rights in the subsidiary.
The Guidance provides that the subsidiary must notify the Registrar of the exemption and provide the Registrar with the name of the parent entity.
Companies subject to equivalent international disclosure or transparency rules
The Regulations do not apply to a company which:
- is subject to disclosure and transparency rules that are contained in international standards; and
- such disclosure and transparency rules are equivalent to those contained in the Companies Act (as amended) relating to listed companies or investment funds.
Therefore, in broad terms, if a listed company or investment fund is subject to an equivalent exemption regime under foreign law, there will be an exemption from filing under BVI law.
The Guidance provides that a company wishing to claim this exemption must file an application with the Registrar and provide certain information as part of that application.
Company whose shares are held by a licensed trustee
A company whose shares are held by a trustee that is licensed under the Banks and Trust Companies Act, Revised Edition 2020 (the "BTCA") is also exempt from filing beneficial ownership information. Instead, the company must file the name of the trustee with the Registrar.
It is a condition of such exemption that beneficial ownership information can be provided to the Registrar within 24 hours of request by such trustee.
Possible future public access
The Companies Act (as amended) envisages that future regulations may be passed to allow beneficial ownership information to be publicly accessible by persons who can demonstrate a legitimate interest (which is to be defined in the future regulations).
Other jurisdictions are also considering allowing public access to those who have a legitimate interest and it is expected that the BVI will have regard to international practices when defining what constitutes a legitimate interest for the purposes of BVI law.
In the event that regulations are passed allowing access by those who can demonstrate a legitimate interest, the Companies Act (as amended) provides that such disclosure will be restricted to beneficial ownership of 25% or more of the shares or voting rights in the company.
Transitional provisions
Existing companies have six months from 2 January 2025 to file their:
- register of members (unless the company has already filed a compliant register of members);
- nominee shareholder information (if applicable);
- beneficial ownership information; and
- information concerning licensed directors (if applicable).
Other changes
The following other changes should also be noted:
- there is a new procedure under which certain persons may apply to court for an order to rectify the register of directors of a company;
- changes have been made to the provisions relating to the restoration of companies which have been struck off the register;
- additional certifications are now required before a company may continue or migrate to an overseas jurisdiction; and
- there are revised provisions concerning the information that must be filed in respect of foreign companies.
Other recent company legislation
BVI Business Companies (Amendment) (No. 2) Act, 2024
With effect from 1 September 2024, the Companies Act has also been amended by the BVI Business Companies (Amendment) (No. 2) Act, 2024.
The amendments made enable the FSC to extend the initial filing period within which a company must file its annual return.
The FSC has now granted such an extension.
As regards any company that was required to make its first (initial) filing of an annual return by 30 September 2024, the FSC has granted a nine-month extension.
The new deadline for such companies to file their first annual returns is now 30 June 2025.
BVI Business Companies (Amendment) Regulations, 2024 (the "BCA Amendment Regulations")
The BCA Amendment Regulations have amended the BVI Business Companies Regulations, Revised Edition 2020.
The amendments include changes to the content of a certificate of good standing that may be issued by the Registrar in relation to a company, and the addition of an expiry date to the certificate.
Further assistance
Given the six-month transitional regime explained above, it is recommended that companies contact us for specific advice on the implications of the legislative changes for existing structures.
Companies should also expect their registered agents to require certain additional information to be given to them during the transitional period (if not already provided).
If you need any assistance with the legislative changes, please speak to your usual Walkers contact or one of the key contacts listed below.
