You have just incorporated your BVI company. The certificate is in hand, the directors and shareholders are in place, and the Registered Agent is appointed. Now what?
Many clients assume that because the BVI does not impose corporate income tax, there is nothing to do on the accounting and compliance side until the company starts trading. This is incorrect — and it is one of the most common mistakes we see with newly formed BVI entities.
This article sets out exactly what a newly incorporated BVI company needs to do in its first year to stay compliant with BVI accounting requirements.
Confirm Your Financial Year-End
One of the first things to address — and one of the most frequently overlooked — is confirming your company’s financial year-end.
Under the BVI Business Companies Act, a company’s financial year defaults to the calendar year (1 January to 31 December) unless the directors formally adopt a different 12-month period by written resolution. If your company’s operations or group structure require a different year-end — for example, 31 March or 30 June — this should be resolved by the directors as early as possible and communicated to the Registered Agent.
Getting this right from the start matters because the financial year-end determines when your first BVI Annual Financial Return becomes due. A calendar year-end means your first return will cover the period from the date of incorporation to 31 December of that year, with a filing deadline of 30 September the following year. A different year-end shifts both the reporting period and the deadline accordingly. We usually recommend to clients to have the financial year-end the same as the calendar year, and this needs to be confirmed with the Registered Agent of the Company.
Start Keeping Financial Records Immediately
Section 98 of the BVI Business Companies Act requires every BVI company to maintain financial records and underlying documentation that are sufficient to show and explain the company’s transactions and to enable the financial position of the company to be determined with reasonable accuracy at any time.
This obligation begins from the date of incorporation — not from the date the company starts trading. Even before a single commercial transaction takes place, the company will incur costs and have financial activity that must be recorded.
In practical terms, this means collecting and retaining all documents of financial significance from day one. These include bank statements (if a bank account has been opened), invoices and receipts for any expenses paid on behalf of the company, the Registered Agent’s invoice for incorporation and annual fees, any shareholder loan agreements or capital contribution records, contracts or agreements the company enters into, and corporate resolutions with financial implications (such as adopting the financial year-end or authorising share issuances).
Records can be kept anywhere in the world — they do not need to be held in the BVI. However, the company must notify its Registered Agent of the physical address where the records are maintained and the name of the person responsible for them. If this address changes, the Registered Agent must be informed within 14 days.
All records must be retained for a minimum of five years from the date of the transaction to which they relate.
Understand the Annual Financial Return
Since 1 January 2023, all BVI Business Companies are required to prepare and submit an Annual Financial Return to their Registered Agent. This is a simplified financial summary — a balance sheet and an income statement — filed in a prescribed template. It does not require an audit, does not need to follow any specific accounting standard, and is not publicly available.
For a newly incorporated company, the key question is: when is my first Annual Financial Return due?
The answer depends on your financial year-end. The return must be filed within nine months of the end of the company’s financial year. For a company incorporated during 2026 with a calendar year-end (31/12), the first return will cover the period from the date of incorporation to 31 December 2026, and must be filed with the Registered Agent by 30 September 2027.
It is important to note that the BVI Business Companies Act does not allow extended first financial periods. A company incorporated on 1 November 2026 cannot extend its first financial year to 31 December 2027. Its first year-end is 31 December 2026, and the return for that short period must be filed by 30 September 2027.
Your First Year Is Not a “Free Pass”
A common misconception is that a company has no accounting obligations in its first year, especially if it has not yet commenced trading. This is not the case. From the moment of incorporation, the company will have financial activity that needs to be captured — even if that activity is limited to the following.
Share capital. The company has issued shares. Whether the authorised share capital is USD 1 or USD 50,000, this appears as equity on the balance sheet when the share capital has par value.
Incorporation costs. The Registered Agent’s fees for incorporating the company, together with the government registration fee, are expenses. If these were paid by a shareholder or a related party on behalf of the company, that creates either a payable or a capital contribution — either way, it must be recorded.
Registered Agent annual fee. This is typically invoiced shortly after incorporation and is a recurring annual expense.
Government annual licence fee. BVI companies must pay an annual licence fee to maintain their registration. The amount depends on the company’s authorised share capital.
Bank account opening costs. If the company has opened a bank account, any related fees or initial deposits are part of the company’s financial records.
All of these items will appear on the company’s first Annual Financial Return. A return showing zeros across the board for a company that has been incorporated and has a Registered Agent is almost certainly incorrect.
Notify Your Registered Agent of the Record-Keeping Address
This is a small but important step that is often missed in the first year. If your company’s financial records are not kept at the office of the Registered Agent — which is the case for most BVI companies — the directors must inform the Registered Agent in writing of the physical address where the records are held and the name of the person maintaining them. Many BVI Registered Agents enquire about this during the incorporation phase as well.
First-Year Checklist
To summarise, here is what every newly incorporated BVI company should do in its first year from an accounting and compliance perspective:
Immediately after incorporation: Confirm the financial year-end and pass a directors’ resolution if adopting a non-calendar year. Notify the Registered Agent of the record-keeping address and the name of the record keeper. Begin collecting and filing all financial documentation from the date of incorporation.
During the first year: Maintain records of all financial transactions, including incorporation costs, agent fees, government fees, bank activity, and any intercompany or shareholder transactions. Keep records organised and accessible — do not leave this to year-end.
After the first year-end: Prepare Accounting Records and the Annual Financial Return based on the company’s financial records. This is a process we can assist with. Then file the return with the Registered Agent within nine months of the financial year-end. Ensure the company’s government licence fee is paid on time to maintain good standing.
How BVI Accountants Can Help
At BVIAccountants (Asterisk BVI), we work with newly incorporated BVI companies from day one. Our team of ACCA-qualified accountants can help you set up a proper record-keeping framework from incorporation, and when time comes help prepare accounting records and first Annual Financial Return of the BVI Company, and advise on financial year-end selection and compliance planning.
Getting the accounting right from the start avoids problems later — particularly when the company needs to open a bank account, file its first Annual Financial Return, or demonstrate good governance to counterparties.
Email us through our website to discuss how we can assist your new BVI company.
