During August 2022 amendments to the British Virgin Islands (“BVI”) Business Companies Act (As Revised) and BVI Business Companies Regulations (As Revised) (the “Regulations”) were published by the BVI government and will come into force on 1 January 2023.
In this article we touch upon a major change, which is relevant to the accounting function of BVI International Business Companies, the introduction of Article 98(a) for the preparation and submission of an Annual Financial Return.
Up to 31/12/2022 BVI Business Companies did not need to submit financial statements or perform any other form of submission in the BVI in relation to their Financial Records (unless regulated and in some instances), other than to keep their Financial Records and underlying documentation (bank statements, invoices, agreements etc) which support the transactions of the entity for a period of 5 years from the date of the transaction.
However, with the recent amendments of the BVI Business Companies Act all BVI Companies (certain exemptions apply) will need to prepare and submit to their Registered Agent an Annual Return, which will be due nine months after the end of the year to which the annual return relates. The Annual Return will not need to be audited and it is expected to comprise of a Profit & Loss and Balance Sheet. Exact contents of this Annual Financial Return have not been released yet by the authorities and are expected to be finalized by the end of 2022. However, the first filing of annual financial returns will not be due until 2024 with a due date not going beyond September 2024.
This requirement applies to all BVI Companies except:
- Listed companies;
- Regulated entities which already submit FS to the Financial Services Commission;
- Companies which already submit FS with their Tax Return.
Companies which prepare Consolidated Accounts will be able to submit those, provided that they show the balances of the BVI Company. We expect more clarifications on this topic.
What you need to know: In a nutshell you need to be aware that from 1 January 2023 your BVI Company needs to submit its Annual Return (template not yet available) to its Registered Agent (RA). First submissions are expected to be made in 2024.
It is expected that the annual return will not be filed with the Registrar or be publicly available. Registered agents will have to notify the Registrar however if a company does not file its annual financial return.
What you need to do: In light of the above, we recommend all of our clients to have the contact details of their Registered Agent handy and keep collecting the Financial Records of the BVI Company (invoices, agreements, bank statements etc.) to be available when the time comes for the submission.
How we will assist: Our specialized teams are already in place and are monitoring the developments in the legislation as they unravel. We expect some degree of finetuning and the Annual Return to be released before providing you with more information.
We will be able to assist at all times with the accounting work required and the preparation and submission of the Annual Financial Return to keep your BVI Company compliant at all times.
Feel free to contact us for more information or for any assistance you may need. Please note that the above are for reference only and do not constitute any kind of advise.