CONTENTS
Anti-money Laundering Acts [read]
Beneficial Ownership [read]
BVI Business Companies Act [read]
Economic Substance Requirement [read]
Transfer Pricing Documentation & CbC Reporting [read]
To see the legal texts here [read]
The BVI Business Companies Act 2004 [read]
BEPS-Related Legal Requirements
Anti-Money Laundering Rules [read]
The BVI Business Companies Act
Documents to be kept at the registered agent's office
Register of directors and change in the register
Shares and beneficial ownership (the BOSSs Act, effective from 30 Jun 2017)
Financial records and underlying documents
Legal Texts
The BVI Business Companies Act
The BVI Business Companies Act (No 16 of 2004) is the principal statute of the British Virgin Islands relating to BVI company law, regulating both offshore companies and local companies. It replaced the International Business Companies Act and came into force on 1 January 2005. The Act has been amended several times since 2005.
Documents to be kept at the office of Registered Agent
Under subsection (1) of section 96, A Company shall keep the following documents at the office of the registered agent:
Under subsection (2) of section 96, a company shall
(a) notify the registered agent within 15 days of any change in the register.
(b) provide the registered agent with a written record of the physical address of the places at which the original register of members or the original register of directors is kept.
Under subsection (3) of section 96, where the place at which the original register of members or the original register of directors is changed, the company shall provide the registered agent with the physical address of the new location of the records within 14 days of the change of the location.
Non-compliance
As per subsection (5) of section 96, a company that contravenes subsection (1), (2), or (3) commits an offence and is liable on summary conviction to a fine of $10,000.
Register of Directors and change of the register
Section 118B of the BVI Business Companies Act provides that
Appointment of directors - Section 113
Registered agent to appoint first director(s) - subsection (1)
The registered agent of a company shall, within 6 months of the date of incorporation of the company, appoint one ore more persons as the first directors of the company.
Subsequent appointment - subsection (3)
Subsequent directors may be appointed
(a) unless the memorandum or articles provide otherwise, by the members; or
(b) where permitted by the memorandum or articles, by the directors.
Vacancy on the board of directors - subsection (4)
Unless the memorandum or articles of a company provide otherwise, the directors of a company may appoint one ore more directors to fill a vacancy on the board.
Reserve director - subsection (7)
Where a company has only one individual member who is also the sole director, notwithstanding anything in the memorandum or articles, that sole member/director may appoint a person as reserve director of the company to act in the place of the sole director in the event of his death.
Removal of directors - Section 114
Subsection (1) - Subject to the memorandum or articles of a company, a director of the company may be removed from office by resolution of the members of the company, either passed in a meeting of members or in writing.
Subsection (2) - Subject to the memorandum and articles, a resolution under subsection (1) may only be passed
(a) at the meeting of the members called for the purpose of removing the director or for purposes including the removal of director; or
(b) by a written resolution passed by at least seventy five percent of the votes of the members of the company entitled to vote.
Subsection (3) - The notice of a meeting called under subsection 2(a) above, shall state that the purpose of the meeting is, or the purposes of the meeting include, the removal of a director.
Subsection (4) - Where permitted by the memorandum or articles of a company, a director of the company ay be removed from office by a resolution of the directors.
Subsection (5) - Subject to memorandum and articles, subsections (2) and (3) apply to resolution of directors passed under subsection (4) with the substitution, in subsection (3), of "directors" for "members".
Certificate of Incumbency
The registered agent can give certification on the information of directors and members at a particular date. Such information is given in a Certificate of Incumbency （在任董事及股东证明）.
An agent fee is payable for the issue of Certificate of Incumbency.
Certificate of Good Standing
If required, the BVI government authority can issue a Certificate of Good Standing to show that the following information at a given date:
A fee is payable for the issue of a Certificate of Good Standing.
Shares and beneficial ownership
Transfer of shares
The change of shares can be effected by the transferor and transferee signing an Instrument of Transfer, with or without an agreement for purchase and sale of shares. No stamp duty is payable for the share transfer.
Beneficial ownership
Effective from 30th June 2017, a BVI company has the legal obligation to identify the beneficial owners, keep a register of members (beneficial owners), and notify the Registered Agent of any changes in shareholders within 15 days from the date such change took place. Non-compliance will result in heavy penalties. See details. [here]
Financial records and information
The Business Companies Act (the Act) requires that a company should keep records that sufficiently show and explain the company's transaction, and will enable the financial position of the company to be determined with reasonable accuracy.
The Act also requires that the company must file a notice to the registered agent of the place where the accounting records are kept. However, there is no requirement for audits.
"Records and underlying documentation" includes accounts and records (such as invoices, contracts and similar documents) in relation to -
(i) all sums of money received and expended by the company and the matters in respect of which the receipt and expenditure takes place;
(ii) all sales and purchases of goods by the company; and
(iii) the assets and liabilities of the company.
As per section 98(8) of the Act, a company that contravenes this commits an offence and is liable on summary conviction to a fine of USD50,000 (as amended 2015).
Dissolution
A BVI Company can be dissolved / closed in two ways: striking off or liquidation.
The BVI Business Companies (Amendment) Act, 2015 [read]
The BVI Business Companies (Amendment) Act, 2016
The 2016 Amendment Act was passed into law, retroactive to 15 January, 2016, which makes some additional changes to the director requirements. The details of the change are as follows:
Legal texts of the Companies Act and Amendments
Section 118B - Registration of Register of Directors
Subsection (1)
A BVI company shall file for registration by the Registrar (the Registrar of Corporate Affairs) a copy of its register of directors.
Subsection (2)
Subject to subsection (6), the initial copy of a company's register of directors shall be filed for registration by the Registrar of the BVI within 21 days of the appointment of the first directors under section 113.
Subsection (3)
A company that has filed for registration by the Registrar a copy of its register of directors shall, within 30 days of any changes occurring, file the changes in the register by filing copy of the register containing the changes.
Subsection (6)
Subject to subsection (8), an existing company has until 31st March 2017 to comply with the requirement of subsection (1).
Subsection (8)
Where an existing company is unable to comply with the requirement in subsection (1) within the period specified in subsection (6), the Registrar may, upon written application received from the company and after being satisfied that
The Registrar may grant the existing company an extension of up to 6 months to comply with subsection (1).
Subsection (9)
Where an existing company fails to comply with subsection (1) or (2), where it has been granted an extension under subsection (8), it fails to comply with the period of an extension, the existing company shall be liable to the applicable penalty specified in Part II of Schedule I.
Schedule 1
Part I - Government registration fee
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118B(1) |
For the initial registration by the Registrar of a copy of a register of directors |
$50 |
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118B(3) |
For the registration of a change in a register of directors |
$50 |
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118B(6)(a) |
For the registration by the Registrar on or before 30th September 2016 of a copy of a register of directors of an existing company, including a struck-off company that is restored to the register within that period |
$0 |
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118B(6)(b) |
For the registration by the Registrar on or before 31st March 2017, or if an extension is granted, on or before the end of the period of extension, of a copy of a register of directors of an existing company, including a struck-off company that is restored to the register within that period |
$25 |
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118B(6)(c) |
For the registration by the Registrar after 31st March 2017, of a copy of a register of directors of an existing company, including a struck-off company that is restored to the register within that period |
$50 |
Part II –
Penalty for failure to file the copy of register of directors
2A (1) where a company fails to comply with section 118B, the following penalties shall apply –
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2A (1)(a) |
For failure to file a copy of a register of directors within the specified period, the penalty payable shall be $100; |
$100 |
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2A (1)(b) |
For failure to file changes in particulars in a register of directors within the specified period, the penalty payable shall be |
$100 |
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2A (1)(c) |
Where an existing company fails to file a copy of its register of directors on or before 31st March 2017, or if an extension has been granted, on or before the end of the period of extension, the following penalties shall apply: |
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2A (1)(c) |
(i) |
For the first month or part thereof after 31st March 2017 or extension |
$300 |
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(ii) |
For the next 3 months or part thereof after the period specified in subparagraph (i) or extension |
$500 |
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(iii) |
For the next 3 months or part thereof after the period specified in subparagraph (ii) or extension |
$750 |
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(iv) |
After the end of the period specified in sub-paragraph (iii) or extension, for each month or a part thereof that the failure continues (i.e. beginning from 1st Nov 2017 if there is no extension granted) |
$1,000 |
Section 118A -
Particulars of Directors to be Registered
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(1) |
A company' s register of directors shall contain the following particulars - |
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(a) |
In the case of an individual director, the individual's - |
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(i) |
Full name; |
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(ii) |
Former name, if any, unless the former name was changed by deed poll or other legal means or disused for more than 10 years; |
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(iii) |
Date of appointment as director or nomination as reserve director; |
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(iv) |
Date of cessation as a director or reserve director; |
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(v) |
Address for the service of documents; |
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(vi) |
Usual residential address, unless that address is the same as the individual’s address for the service of documents; |
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(vii) |
Date and place of birth; and |
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(viii) |
Nationality; and |
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(b) |
In the case of a corporate director, the corporate director's - |
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(i) |
Corporate name; |
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(ii) |
Corporate or registration number, if any; |
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(iii) |
Registered office or principal office; |
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(iv) |
Address, but if the corporate director is incorporated or registered in the Virgin Islands, its corporate or registration number only; |
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(v) |
Date of appointment as corporate director; |
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(vi) |
Date of cessation as corporate director; and |
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(vii) |
Place of incorporation or registration and date of such incorporation or registration; |
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(c) |
Such other information as may be prescribed. |
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(2) |
Where a person is or was formerly known by more than one name, each name must be stated. |
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BVI Business Companies Act
The BVI Business Companies Act are available with the BVI Registry of Corporate Affairs on the website. [Read]
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