Financial Crime World

Virgin Islands, British: New Due Diligence Requirements for Financial Transactions

A recent amendment to the British Virgin Islands (BVI) Business Companies Regulations has introduced significant changes to financial reporting requirements for companies operating in the jurisdiction. The new regulations aim to enhance transparency and accountability in financial reporting practices.

Key Changes to Reporting Requirements

Annual Return Filing

  • All BVI companies must now file an annual return with their registered agent, which includes specific financial information such as a Balance Sheet and Income Statement using a prescribed template.
  • The first annual financial return is due within nine months of the company’s fiscal year-end, giving companies until September 30th, 2024 to comply.

Record Keeping Requirements

  • In addition to filing an annual return, companies are required to maintain records and underlying documents that enable the financial position of the company to be determined.
  • If these records are kept at a location other than the office of the registered agent, the company must provide written details of the location and the person maintaining the records.

Filing and Presentation

  • The annual financial return does not require audit or certification by a public accountant.
  • Companies can present the financial return in US dollars or any other currency used for their financial statements.
  • The financial return will be kept privately at the offices of the registered agent and will not be filed with the Registry of Corporate Affairs or made public, unless requested by competent authorities.

Exemptions

Some companies are exempt from filing an annual financial return, including:

  • Listed companies on recognized exchanges
  • Regulated companies under BVI Financial Services legislation
  • Companies that file annual tax returns with the BVI Tax Authority
  • Companies in liquidation (unless the annual return becomes due before liquidation begins)

Penalties for Non-Compliance

  • Failure to file the annual financial return by September 30th, 2024 will result in penalties.
  • The registered agent must notify the BVI Registrar within 30 days of the due date if the company fails to comply.
  • Fines for late filing range from US$300.00 for the first month or part thereof, up to a maximum of US$5,000.00.

Registered Agent Obligations

Registered agents are also subject to penalties if they fail to report a company to the Financial Services Commission. In such cases, the penalty is US$3,000.00.

Conclusion

The recent amendments to the BVI Business Companies Regulations introduce important changes to financial reporting requirements for BVI companies. It is essential for companies to understand and comply with these regulations to avoid penalties and ensure transparency in their financial operations.