As you may have read in our previous articles, the British Virgin Islands (BVI) introduced the BVI Annual Return requirement via the amendment of the BVI Business Companies Act. This requirement is applicable from 1 January 2023 and first submissions are due in 2024 for financial years ending in 2023.
This new amendment basically requires BVI Business Companies to submit an Annual Financial Return (BVI Annual Return) to their Registered Agent, 9 months after their Financial Year End. For example, if your company’s financial year end is 31 December 2023 it will have until 30 September 2024 to submit its BVI Annual Return.
This new requirement may come as a surprise and an extra ‘headache’ to a lot of people. New regulations many times can be deemed as complex and open to interpretation making them challenging to ensure full compliance, as well as they can be expensive to implement, require extra resources and disrupt operations. In some instances if companies fail to meet the requirement it may also lead to fines impacting the organizations finances. However, the BVI Annual Return requirement is pretty simple, and a lot of Companies, especially the ones which are simply holding investments should not have a major issue to update their accounting records and complete their Annual Returns. Its also worth mentioning at this point that all BVI Companies had as per the BVI Business Companies Act to keep Financial Records therefore financial information should have already been kept, which will help you even more meet this requirement.
In the instance of BVI Companies, as it is a new requirement to submit an Annual Return many people may see it as an extra burden as they have never prepared accounting records before. However, it shouldn’t be that way, as we do strongly believe that this requirement is easier to ‘satisfy’ as many people may think for reasons explained below:
1. It is a simple income statement and balance sheet
As you can see from the official template release shown below, the BVI Annual Return is a simple Income Statement and Balance Sheet. You will need to show Assets / Liabilities of your Company, such as Cash, Loans and Receivables, Investments, Tangible and Intangible Assets, as well as any Accounts Payable and Long-Term Debts. All these for simple holding companies or for companies who trade in securities (not heavily), can be accounted for without allocating significant resources/time and without costing too much as explained below.
2. Does not need to be audited
Another major simplicity of the return is that it does not need to be audited. The main requirement is to prepare the accounting records – something we can assist with. Not having the return to be audited simplifies significantly the process, as audits require additional resources and time.
3. You have plenty of time to prepare and submit
First Annual Returns are due on 1 January 2024 for financial years ending on 31 December 2023, and you will then have 9 months to submit to your Registered Agent. As you may already know you can choose the financial year end of your Company, therefore in instances where the Company’s year end is 31 March 2023, it will have to submit its annual return for the year end 31 March 2024, therefore having until 31 December 2024 to make the submission. This extra time given (as the return was introduced during 2022), its a good opportunity to give you time to prepare.
4. We can assist at a relatively low cost
5. It can be prepared under any currency
If your Company prepares Accounting records in a different currency than the USD$ no need to worry. There is no limitation on the currency under which the Annual Return is prepared. It can be prepared under the currency under which the entity prepares its financials records.
6. Submission to your Registered Agent shall be simple
Some times regulations can be difficult not only to implement but also to submit. In this instance the BVI Annual Return is to be submitted to the Registered Agent of the Company, which makes the process simpler than to submit to the authorities. Your BVI Register Agents should send you instructions on how the return will be submitted.
What you need to do:
If you are unsure on your next steps you can contact us on how we can assist you with the preparation of accounting records and the return. It is important that you start keeping complete financial records, so that when the financial year ends you have everything required to prepare accounting records in hand, to avoid delays and issues in finding documents.
Official Template to be used:
To give you a better understanding on the full requirement, we present to you below the BVI Annual Return template as released by the authorities (we have just added our branding – this is the official template). You can also download it in pdf format here.
BVI Annual Return Balance Sheet Template:
BVI Annual Return Profit & Loss Template:
We are a specialized Accounting firm who have dedicated a lot of time in studying and understanding this new requirement. We can therefore assist in the preparation of Accounting Records and BVI Annual Returns at a low cost so that to ensure that you comply with this new requirement. We have also prepared a specialized website on this requirement www.annualreturn.vg , which includes a wealth of information and a very comprehensive FAQ in the library section.
You can contact us on email@example.com for more information on the Return and how we can assist you.