On 1 January 2023 the British Virgin Islands ("BVI") Business Companies Act (As Revised) ("BC Act") was updated. BVI companies now have to file a new annual return with their registered agent setting out certain financial information, unless they are exempt. The annual return has to be filed within nine months of the calendar year end or at the end of the company's financial year, if different. The first return is required for the 2023 financial year, with filings to be made by the end of September 2024 for companies with a calendar year end.
This update considers the new form for the annual return, exemptions that apply and how Maples Group can help clients prepare their returns.
For further information on the January 2023 amendments to the BC Act, please see our relevant update.
New Annual Return Form
The annual return must contain the information set out in the BVI Business Companies (Financial Return) Order (As Revised) (the "Order"). The Order includes a template for the annual return, being a simple balance sheet / statement of financial position and an income statement. There is no requirement for the annual return to be audited or to use a particular accounting standard. The return can be presented in US dollars or any other currency in which the company prepares its financial statements.
Where a company is part of a group of companies that prepares and maintains consolidated accounts, the company can file the group consolidated accounts if they show the accounts of the company. Where there is more than one BVI company in a group, a single filing showing the annual returns attributable to each BVI company, can also be made.
The annual return will be kept at the offices of the registered agent but will not be filed with the BVI Registrar of Corporate Affairs ("Registrar") or be publicly available. A copy can however be requested by the BVI Financial Services Commission ("Commission") or any other competent authority in the BVI.
Penalties for not Filing Annual Return
If a company does not file its annual return on time, the registered agent has to notify the Registrar within 30 days of the date the annual return was due.
Failure to file the annual return on time is an offence and may result in prosecution or a fine against the company up to a maximum aggregate penalty of US$5,000. Where a company is liable to the maximum penalty, the Registrar may also strike the defaulting company off the register. Non-compliance will be reflected on a company's certificate of good standing.
Under s98A(5) of the BC Act, the following companies are exempt from having to file an annual return:
- A listed company, being a company any securities of which are approved for listing on a recognised exchange;
- A company regulated under BVI financial services legislation that provides financial statements to the Commission in accordance with the requirements of that financial services legislation. This includes regulated mutual funds, private investment funds and approved managers;
- A company that files annual tax returns (with its financial statements) with the BVI Inland Revenue;
- A company in liquidation, except where the company's annual return becomes due before the commencement of the liquidation, in which case the company's liquidation is not complete until the company files the annual return.
The annual return requirement only applies to BVI companies, not also BVI limited partnerships.
How the Maples Group can help
Our team of experienced and qualified accounting professionals can provide clients with the services necessary for preparing an annual return, including ongoing monitoring of the requirements as they develop and working together with our registered agent and legal services teams to ensure our clients are supported throughout.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.