A very warm welcome to our latest Quarterly Corporate Update covering recent legal developments in the British Virgin Islands.
In our last newsletter, we highlighted a number of company law changes made by the new Business Companies (Amendment) Act, 2022. These changes are now in effect. By way of reminder, the four key changes are: (1) a new requirement to prepare an annual financial return; (2) the names of directors are now publicly accessible; (3) non-payment of government fees will now lead to automatic dissolution; and (4) there are new requirements for voluntary liquidators. Partner Anton Goldstein explains the changes in this client briefing.
If you've not already done so, we hope you will join us in our ongoing webinar series exploring topics of interest in BVI law. In the fourth session, held on 16 January, Rachael Pape discussed the use of BVI entities in cross-border finance transactions, including registration of security, guarantees, conditions precedent and other key considerations applicable to BVI entities. In February we will consider the advantages of BVI Funds, and in March we conclude the series with an overview of BVI Companies and M&A. If you missed earlier sessions of interest, you can also view the recordings for these on our Events page.
There has been much discussion in the BVI of the recent Court of Justice of the European Union (CJEU) ruling on public access to national beneficial ownership registers. In a judgment on 22 November 2022, the CJEU held that, the European Union legal requirement that beneficial ownership of legal entities be accessible to any member of the general public is invalid and disproportionate in its interference with a right to a private life. The full judgment of the Court can be found here. In response to the judgment, the EU Council of Finance Ministers on 8 December 2022 stated that the registers should be open to anyone who can demonstrate a 'legitimate interest' in the personal data they contain and that this should include journalists and civil society organisations that are 'connected with' the prevention and combating of money laundering. This judgment clearly has implications for whether the BVI will ever adopt a publicly accessible register of beneficial owners (something the BVI has committed to introduce once it becomes an international standard) and we will be sure to bring you further updates as they arise.
The Virtual Assets Service Providers Act 2022 (the "VASP Act") was gazetted on 29 December 2022 and will likely come into force in early 2023. It was introduced to implement certain recommendations of the Financial Action Task Force and to demonstrate the BVI's continued commitment and responsiveness in meeting rapidly-changing international standards and best industry practice as they relate to cryptocurrencies and digital assets businesses. The VASP Act will make provision for the registration and supervision of virtual assets service providers in relation to transactions involving virtual assets; the approval of provision of virtual assets custody service; and the approval of virtual assets exchanges; and to provide for other matters connected therewith. It will include a transitional grace period of 6 months for an existing VASP to get duly registered by the BVI Financial Services Commission. Further information on the VASP Act can be found in this client briefing.
Our attorneys have also produced a number of other articles covering a range of subjects impacting offshore entities and the BVI. These include articles on recent regulatory developments affecting BVI funds, BVI directors' duties during or at the onset of insolvency, funding African investments using BVI funds, structuring for the Digital Asset Industry in the Cayman Islands, Bermuda and the British Virgin Islands and good alternatives for a crypto fund in the Cayman Islands and British Virgin Islands.
To help provide an overview of the BVI market, every quarter we provide information on the numbers of new BVI incorporations, total active BVI entities and registered investment funds. We hope they help provide a snapshot of the BVI market.
Source: Statistical Bulletin of BVI FSC.
*Figures for 2022 are as at 30 September 2022
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