The BVI Business Companies (Amendment), Act, 2022 (“BCA Amendment Act”) which amends the BVI Business Companies Act, as amended (the “BCA”) was gazetted on 12 August 2022 and comes into force on 1 January 2023. The BCA Amendment Act seeks to strengthen the BVI business companies regime in order to ensure continued alignment with international standards in financial services.
The BCA Amendment Act will mainly update the framework for struck-off companies, abolition of bearer shares, record-keeping measures and BVI residence requirements for voluntary liquidators.
The key changes which are due to come into force on 1 January 2023 include the following:
- Striking off and dissolution – streamlining the existing rules relating to struck off companies and restoration of companies, the company striking off regime will be amended so that a company will be automatically dissolved following the publication of the striking off notice by the Registrar (subject to a 90 days’ notice period to the company to regularise its status). If dissolved (following striking off), the company may apply to the Registrar or the High Court within five years (instead of the current ten years) for restoration to the Register (subject to certain conditions being met). Transitional rules will apply to companies that are struck off on the date the BCA Amendment Act comes into force.
- Filing annual return with registered agents - companies will be required to file an annual financial statement with their registered agent within nine months of the end of the year to which the return relates. Registered agents will be obliged to notify the Registrar of any failure by the company to file its annual return. The details and form of such filing are still be confirmed but we expect a simple balance sheet and profit & loss statement will be required, similar to requirements in other jurisdictions.
- Register of directors – consistent with other jurisdictions, a list of the names of current directors of a company will be made available upon request to the Registrar and payment of a fee.
- Continuation outside of the BVI – companies intending to continue outside of the BVI will be required to provide advance notice of such intention to its members and creditors. In addition, the company will need to file notice of its intention to continue outside of the BVI with the Registrar and publish such notice in the Gazette and on the company’s website (if any) for a period of at least 14 days before the continuation.
- Voluntary liquidators to be persons who live within the BVI. The aim of this amendment is to facilitate the collection and retention of a liquidated company’s records within the BVI. Where joint voluntary liquidators are appointed, at least one of them must live in the BVI.
- Deemed resignation of registered agent - the period of notice registered agents need to give to their clients indicating their intent to resign will be reduced from 90 days to 60 days’ written notice. Resignation will be automatic on expiry of the period, rather than requiring a further filing or notice.
- Elimination of bearer share regime – already largely abolished in practice through previous amendments, the residual bearer share regime will be completely eliminated on 1 January 2023.
- Restrictions in relation to charity or non-commercial business under new section 17A - persons wishing to engage in charitable or non-commercial activity can incorporate a company with a name ending (for example, “Limited”, “Corporation” or “Incorporated”) provided in section 17 (1) of the BCA but they must seek the prior approval of the Registrar. Registrar approval is not required where a company simply engages in charitable or non-commercial activity in addition to its business activities, as part of the company corporate social responsibility.
We will be publishing further detailed guidance in due course. In the meantime, if you need advice regarding how the BCA Amendment Act might apply to your BVI entity, please get in touch with your usual Walkers contact or alternatively contact the authors below directly.
