October 2022 Edition
Significant Amendments to the BVI Offshore Company Law
A revised version of the current law, the "BVI Business Companies Act (BVI Company Law)", titled "BVI Business Companies (Amendment) Act, 2022 (BVI Business Companies Act (Amendment), 2022 Edition)", has been issued in the BVI Islands. The aim is to follow international standards in terms of financial services.
This revised edition mainly covers automatic liquidation of automatically dissolved corporations, complete abolition of bearer shares, strengthening of accounting document retention, and requirements for liquidators to be local persons in the BVI when liquidating a corporation.
The main changes are as follows:
- Automatic Dissolution and Liquidation Procedures As of January 1, 2023, BVI corporations that have been automatically dissolved due to "neglect" such as unpaid government registration fees will be automatically liquidated in the BVI, timed with the issuance of the official gazette (Gazette) locally (almost simultaneously with January 1). Affected corporations will receive notice from the local authorities 90 days prior, and corporations that have not responded by then will be automatically liquidated. Corporations that have been automatically liquidated can be revived within 5 years. For corporations automatically dissolved within the past 7 years wishing to revive, the revival procedures must be completed by June 30, 2023. In cases of automatically dissolved corporations, especially if corporate assets still exist, please proceed with procedures promptly.
- Annual Report and Accounting Document Submission Obligations Filing of annual reports and submission of accompanying financial statements will become mandatory. It is not yet determined what accounting documents will be required, but it is expected that submission of Balance Sheets and Profit & Loss Statements will become mandatory.
- Local Registration of Directors Following transparency initiatives for corporate information already underway in other countries, the BVI will also mandate local registration of corporate directors, allowing anyone to view the names of BVI corporate directors upon payment of fees.
- Transfer of Corporate Nationality to Other Countries If a BVI corporation transfers its corporate nationality (changes nationality) to another country, prior notice to the corporation's officers and creditors will be mandatory. Reporting to the local registry, announcement of the transfer in the local official gazette (Gazette), and notification on the company's website (if available) for a minimum of 14 days will be mandatory.
- Liquidators When liquidating a BVI corporation, it is mandatory that the liquidator be selected locally within the BVI. (If there are multiple liquidators, at least "one" must be a local person in the BVI). The aim is to manage information of the liquidated corporation locally.
- Resignation Notice of Local Agents Currently, when a BVI registration agent indicates resignation from agency duties, they are required to notify customers 90 days prior, but this will change to a 60-day prior notice.
- Abolition of Bearer Shares In the BVI, issuance of bearer shares was already largely stopped in 2005, but holding of bearer shares was permitted only for special reasons such as when a bearer share holder passed away or lost capacity to judge. This will be completely abolished in this amendment.
