Important changes are being made to the BVI Business Companies Act, Revised Edition 2020 (the "Companies Act").
The BVI Business Companies (Amendment) Act, 2024 (the "Amendment Act") was passed by the BVI House of Assembly in September 2024, and while the changes are not yet effective, we expect that they will be brought into force in the near future (and likely before the end of the calendar year).
The amendments are being made to ensure 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
At present, companies are required to keep a register of members, and where the register of members is not maintained at the office of its registered agent in the BVI, a copy must be provided to the registered agent within 15 days of any change.
Under the Companies Act as amended by the Amendment Act (the "Amended Act"), subject to certain exemptions, companies will be 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 on an ongoing basis.
It is important to note that the register of members will not generally be publicly available or searchable unless a company specifically opts to make it so (as is the case with the current optional ability to file on a public basis). Unless the company opts otherwise, the register will only be available to the company, its registered agent or competent authorities and law enforcement agencies.
Nominee shareholders and professional directors
The Amended Act contains additional filing requirements relating to nominee shareholders and professional directors.
For these purposes, the Amended Act helpfully provides that 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". It would therefore capture bare trust arrangements, but overall this 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):
(a) the name and address of the nominator;
(b) the date on which the nominee shareholder ceased to be a member; and
(c) 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.
As is currently the case, a list of current directors will be publicly accessible on request from the Registrar in respect of any company (upon payment of a fee), but the register of directors itself will not be publicly available.
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 will be reduced from 6 months to 15 days.
Beneficial ownership information
The Amendment Act introduces an important shift in terms of who has an obligation to collect beneficial ownership information. To date, this has been an obligation of the registered agent of the company, who has been required to collect, keep and maintain adequate, accurate and up to date information on the beneficial owners of the company, including (among others) any natural person who ultimately owns or controls 10% or more of the shares or voting rights in the company.
Pursuant to the Amendment Act, the company itself will now be under an obligation to collect and keep the beneficial ownership information. In addition, while registered agents have previously had to upload beneficial ownership information to a secure cloud based portal, the new position will be that unless a company benefits from an exemption (as discussed below), the beneficial ownership information must be filed with the Registrar.
While the position continues to evolve and may change in the BVI and other offshore jurisdictions, It will remain the case for now that the beneficial ownership information will not be accessible by the public (although similarly to the current position, competent authorities and law enforcement agencies may be able to access such information).
Any changes to the beneficial ownership information must also be filed with the Registrar.
Registered agents will continue to be required to take certain steps to verify the beneficial ownership information, and the Registrar is also required to adopt such measures as are considered necessary and adequate (including adopting a risk-based approach) to further verify the information.
Exemptions concerning the filing of beneficial ownership information
The requirement to file beneficial ownership information with the Registrar will not apply to the following:
(a) a company whose shares are listed on a recognised exchange (which includes the LSE, NYSE, NASDAQ and various other international exchanges); or
(b) subject to certain conditions:
(i) 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"); or
(ii) 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 in paragraph (b) above are as follows:
(a) the company’s beneficial ownership information is held by:
(i) a person who holds a Category 6 investment business licence pursuant to SIBA; or
(ii) the company's authorised representative, or other person licensed by the BVI Financial Services Commission that has a physical presence in the BVI; and
(b) the beneficial ownership information can be provided to the Registrar within 24 hours of request by the person who holds such information.
Where a person holds beneficial ownership information pursuant to these conditions, the company must file with the Registrar the name and address of such person.
Possible future public access
The Amendment Act 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 Amendment Act 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 will have 6 months from the Amendment Act coming into force to file the company's:
- 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 Amendment Act has also made other changes, including:
- a new procedure under which certain persons may apply to court for an order to rectify the register of directors of a company;
- changes to the provisions relating to the restoration of companies which have been struck off the register;
- additional certifications which will need to be given before a company may continue or migrate to an overseas jurisdiction; and
- revised provisions concerning the information that will need to be filed in respect of foreign companies.
Further assistance
Given the 6 months transitional regime explained above, it is recommended that companies contact us for specific advice on the implications for existing structures, and otherwise, companies should expect their registered agents to require certain additional information to be given to them either before or during the transitional period after the Amendment Act comes into force.
If you need any assistance with the changes, please speak to your usual Walkers contact or one of the key contacts listed below.
