What is the requirement for those who have a BVI registered company?
From 1 January 2023 the BVI Business Companies (Financial Return) Order, 2023 (the "Order") and the BVI Business Companies (Amendment) Act, 2022 (which amended the BVI Business Companies Act, 2004 (as amended)) require BVI registered companies, unless exempt, to prepare and file an annual return. The Order was gazetted on 2 March 2023 and deemed to have come into force on 1 January 2023. It outlines the specific format, due dates and filing dates for each annual return, as well as the entities that are exempt from this requirement.
The annual return must be filed with a company's registered agent. The form of the annual return is set out in the schedule to the Order and must be filed with a basic balance sheet/statement of financial position and income statement.
If a company does not file its annual return, the registered agent must notify the Registrar of Corporate Affairs in the BVI (the "Registrar") within 30 days of the final date on which the annual return should have been filed. Failure to file an annual return can result in fines and a company losing its good standing status.
There are no strict accounting standards required for the annual return. Additionally, there are no audit requirements. However, the financial statements must be presented in the currency used by the company for its own financial records. The financial statements can be consolidated for multiple group entities.
Annual returns will not be publicly available and so, once filed with a company's registered agent, there will be no requirement to file the return with the Registrar. All annual returns will be kept at the offices of the relevant registered agent and can be requested by the BVI Financial Services Commission (the "Commission") in certain circumstances.
If a company repeatedly fails to file its annual return, and accumulates fines amounting to US$5,000, the Registrar has the discretionary power to strike off such a company.
An annual return must be filed within nine months of a company's financial year end on or after the 31 December 2023. Directors have a duty to use reasonable care and to ensure that the financial position of the relevant company can be determined with reasonable accuracy when preparing the annual returns.
The annual returns are to be filed in paper form, but electronic copies are acceptable at the discretion of the registered agent. Therefore, it is advisable for companies to ascertain whether their registered agent will accept electronic copies.
Companies that have a financial year that does not correlate with the calendar year, will have their first annual return due in 2024. The exact month is dependent on which month the commencement of their financial year falls.
If a company has not yet established a financial year, a board resolution will need to be passed to establish a period. The deadlines for common financial year ends are detailed below.
Financial year end
Established annual deadline
31 December 2023
30 September 2024
31 March 2024
31 December 2024
30 June 2024
31 March 2025
Not all BVI registered companies must register an annual return with their registered agent. The following are exempt from the requirements under the Order:
- a listed company, meaning a company that is listed on a stock exchange;
- a company that is regulated under financial services legislation and provides financial statements to the Commission in accordance with the requirements of that financial services legislation;
- a company that files its annual tax return to the Inland Revenue Department accompanied by such company's financial statements; and
- a company in liquidation, except that this exemption does not apply if a company's annual return becomes due prior to the commencement of the liquidation.
The requirement to file an annual return has not been extended to BVI partnerships.
If you would like any further information or advice, please get in touch with your usual Bedell Cristin contact or one of the contacts listed.