BVI Business Companies (Amendment) Act, 2024 keeps BVI at forefront of responsible business practices

17 October 2024

Many countries are adopting new standards to help combat the use of financial services for money-laundering. The latest changes that have been announced to the BVI Business Companies Act, Revised 2020 (the "Act") are no exception, showing that steps are being taken to ensure the jurisdiction moves quickly to address the recommendations made in the Caribbean Financial Action Task Force's Mutual Evaluation Report published earlier this year.

The British Virgin Islands (the "BVI") recently published the BVI Business Companies (Amendment) Act, 2024 (the "Amendment Act"), which introduces changes to the Act and ensures that the BVI keeps pace with international best practices and standards established by standard-setting bodies such as the Global Forum on Transparency and Exchange of Information for Tax Purposes and the Financial Action Task Force.

The Amendment Act was published in the Gazette on 26 September 2024 and, although not yet in force at the time of writing, will result in certain changes to the filing and compliance obligations on BVI companies. Consequently, shareholders, directors, administrators and stakeholders of BVI companies need to be mindful of the incoming changes.

Summary of changes

We will explore in more detail below the key changes, but as a summary:
The register of members of a company will be required to be filed with the BVI Registrar of Companies (the "Registrar") but will not be made publicly available and will need to include information relating to nominee shareholders.
The register of directors of a company will be required to be filed with the Registrar within a shortened time period, but must also show directors who are licensed professionals.
A company applying to continue out of the BVI will be required to confirm that they are not subject to any regulatory action or pending litigation.
A company applying to continue into the BVI will need to submit the list of members at the date of the application and file any information to bring it in line with the new requirements under the Amendment Act.
Companies will be required to submit a 'return' on their affairs and an express duty on companies to cooperate with authorities and law enforcement agencies will be introduced.

Register of members

The Amendment Act clarifies the information that is required to be kept in a company's register of members and introduces a new requirement to include information in relation to any nominee shareholder.

This information will not be made publicly available, save in very limited circumstances (to domestic competent authorities and law enforcement agencies), unless the company chooses to file the register publicly (which is commonly seen where security is taken over the shares of the company). The register of members is required to be filed with the Registrar within 30 days after the incorporation or continuation date of the company. The company will also be required to notify the Registrar of any changes to its members within 30 days.

It is important to note that certain companies are exempt from the filing requirement, including companies listed on recognised exchanges and BVI funds (being private, professional, public, private investment, incubator and approved funds).

The Amendment Act provides for a transitional period, and existing companies must comply with the requirement to file the register of members within six months of the effective date of the Amendment Act.

Beneficial ownership

The Amendment Act also clarifies that beneficial ownership includes consideration of both ownership and control.

This information will not be made publicly available (save to domestic competent authorities and law enforcement agencies), although Regulations may be issued which would permit persons with a legitimate interest (being a shareholding interest over 25%) to acquire the information and we will keep you updated on further developments as soon as we have them. The information should generally be filed with the Registrar within 30 days after the incorporation of the company or its continuation into the BVI. The company will also be required to notify the Registrar of any changes to its members within 30 days.

There are certain exemptions to this filing requirement for listed companies and BVI funds (being private, professional, public, private investment, incubator and approved funds).

However, in the case of BVI funds, the exemption will only apply where the company's beneficial ownership information is held, and can be provided to the Registrar within 24 hours of request, by:

a person who holds a Category 6 investment business licence pursuant to the Securities and Investment Business Act, Revised 2020;
the company's authorised representative; or
another person licensed by the BVI Financial Services Commission (BVI FSC) that has a physical presence in the BVI.

Where the beneficial ownership information of a company is held by a person as detailed above, the company must file the name and address of that person with the Registrar within 30 days of incorporation (or continuation in the BVI, as the case may be).

The Amendment Act also places an obligation on the Registered Agent of a company to take reasonable measures to verify the beneficial ownership information before it is filed.

The Amendment Act provides for a transitional period, and existing companies must comply with the requirement to file beneficial ownership information within six months of the effective date of the Amendment Act.

Register of directors

The Amendment Act makes minor changes to the existing provisions as they relate to directors, including the following:

the time period for the registered agent to appoint the first director of a company has been significantly reduced from six months to 15 days;
the initial copy of the register of directors must now also be filed with the Registrar within a slightly shortened period of 15 days (previously 21 days);
a member, director or any person aggrieved by the omission, may apply to the court for a rectification order where the information contained in the register of directors is incorrect or omits information;
where a person licensed under the Banks and Trust Companies Act, Revised 2020, or the Company Management Act, Revised 2020, provides director services to a company or acts as a director of a company, this must now be made clear and information showing this filed with the Registrar at the same time that the register of directors is filed; and
whilst not publicly available, access to the register of directors will be expanded to include:
- the company;
- the company's registered agent;
- a competent authority; and
- a law enforcement agency.

Continuations and discontinuations

The Amendment Act also brings in new requirements when continuing a company into or out of the BVI.

If a company is intending to discontinue out of the BVI, the following additional declarations will need to be included in the notice of intention to be filed with the Registrar:

that the company does not have any pending request from a competent authority to produce documents or provide information which has not been satisfied;
that a receiver has not been appointed over the company or in relation to any assets of the company; and
that the company is not aware of any legal proceedings pending against the company, or any member, director, officer or agent of the company as it directly pertains to the affairs of the company.

The Registrar will also ensure that the company's information requirements under the Amendment Act are complied with, making the requisite checks for the filing of the new nominee director/shareholder information and beneficial ownership register.

If a company intends to continue into the BVI, the application will now also need to include a full list of the members as at the date of the application and details of its registered office in its country of incorporation.

The Amendment Act also puts additional information obligations on a foreign company continued into the BVI and such companies will now be required to file a notice with the Registrar within 30 days after a change in any of the following:

its corporate name;
the jurisdiction of its domiciliation;
the instrument constituting or defining its constitution;
its directors, or any information filed in respect of them;
its members, or any information filed in respect of them;
the address of its registered officed in its country of incorporation; or
its registered agent.

Duty to cooperate

The Amendment Act puts a real focus on ensuring the BVI regulators have all the information and tools they need to discharge their functions and changes will be brought in so that companies will be required to cooperate (including disclosing information within the company's knowledge and producing documents in the company's possession or under its control) with the Registrar, a person conducting an inspection under the Amendment Act, a competent authority or a law enforcement agency in discharging their functions.

Other implications

Whilst the above changes will prompt the most interest, it is worth noting that these changes will have consequential effects to other parts of the Act, including:

Dissolutions: provisions regarding the striking off of a company will be extended to circumstances where there is a failure to file any information specified under the new requirements.
Restoration: when restoring a company, the new information requirements must be complied with and the registered agent will have 14 days from the restoration date to do so.

Market effect

The effect of the changes will be to codify the rules relating to beneficial ownership and shareholder and director filings, ensuring that the BVI remains at the forefront of responsible business practices and global transparency requirements.

The compliance process is streamlined, and essentially codifies certain anti-money laundering and know-your-customer requirements that are already in place within the BVI, whilst ensuring that information remains private and protected, guaranteeing that legitimate privacy and data protection requirements are supported.

We consider that the amendments will promote investor confidence in the jurisdiction, given that the rules in relation to the ownership and administration of companies are now clear, transparent and codified.