BVI Companies Face New Annual Return Requirements

The British Virgin Islands (BVI) authorities have made significant changes to the primary companies legislation, the BVI Business Companies Act, which came into effect on January 1, 2023. As part of these amendments, all BVI-registered companies, with some exceptions, are now required to submit an annual financial return to their registered agent within nine months following the conclusion of each financial year.

Companies Must File Annual Returns or Face Penalties

The new requirement aims to enhance transparency and accountability in the BVI business environment. Failure to submit an annual return on time may result in financial penalties for non-compliance, which can escalate to dissolution by the BVI Registrar of Companies if persistent.

Exceptions to the Rule

Not all BVI-registered companies are required to file an annual return. The following entities are exempt:

• Listed companies on a stock exchange
• Regulated companies under BVI financial services legislation that submit financial statements to the Financial Services Commission (FSC)
• Companies submitting financial statements and annual tax returns to the Inland Revenue Department
• Companies undergoing liquidation, unless the annual return is due before the liquidation process commences

Format and Filing Requirements

The BVI FSC has established a standardized format for the annual return, which must be used by all exempt companies. The return consists of a simple balance sheet and a profit-and-loss statement. While auditing is not mandatory, registered agents are required to inform the BVI Registry of Corporate Affairs about non-compliant entities within 30 days after the filing deadline.

Filing Deadlines

BVI-registered companies must submit their annual returns to their registered agent within nine months following the conclusion of each financial year. The deadline varies depending on the company’s fiscal year-end, but generally falls between January and September of the following year.

Filing Compliance

Companies performing due diligence on registered agents should inquire about their filing processes, as each agent may have its own procedures in place. For example, Vistra uses a proprietary portal called MyFormations to facilitate online data collection and submission of annual returns.

In conclusion, BVI-registered companies must be aware of the new annual return requirements to avoid non-compliance penalties and dissolution. Companies should consult with their registered agents or third-party experts to determine if they are exempt from filing an annual return and to ensure compliance with the revised regulations.