Further to amendments to the BVI Business Companies Act, BVI Business Companies will need to submit an Annual Financial Return (‘Annual Return’) to their Registered Agent 9 months after their financial year end starting from Financial Years ending on 31 December 2023. This BVI Annual Return requirement was also enacted during March 2023 through the BVI Business Companies Financial Return Order which provides details on the form of the Annual Return, examples of the due and filing dates, and details on the filing exemptions all of which we analyze below amongst other details of this new BVI Annual Return Requirement.
What is the BVI Annual Return?
Further to the BVI Business Companies Act amendments 2022, from 1 January 2023 every BVI Company needs to submit an Annual Financial Return to its Registered Agent.
The Annual Return template consists of a simple Income Statement and Balance Sheet and will not need to be audited. In a nutshell the Income Statement provides information about a company’s revenues, expenses, gains, and losses over a specific period. The Balance Sheet shows a company’s assets, liabilities, and shareholders equity.
You can read more about the contents of the BVI Annual Return in our specialized article ‘Understanding The Contents And Form Of The BVI Annual Return Template‘.
What changes from 1 January 2024
1 January 2024 signifies the kick-off date for BVI Annual Return Submissions. Starting from 1 Jan 2024, the first BVI Annual Return submissions can take place for Companies with Financial Year End 31 December 2023.
If therefore the year end of your BVI Company is 31 Dec, we do recommend to start collecting all accounting documentation (invoices, agreements, bank statements, broker statements etc) and you can then have an accounting firm like us (Asterisk BVI) to assist with preparation of the accounting records and annual return so that you do not have to worry about this requirement. Try to avoid leaving this to the last minute, so that to avoid delays and/or unnecessary stress.
Filing Dates
The earliest date an annual return can be submitted (as opposed to when it must be filed) from a company is 1 January 2024. This practically means that if the financial period of your Company is 1 January to 31 December 2023, then the return can be submitted to the Registered Agent of the Company starting from 1 January 2024 (as explained above) with the latest date for submission being 30 September 2024.
Companies with financial year other than the calendar year must file their BVI Annual Return no later than 9 months after their financial year end. For example a Company with financial year end in 31 March, its Annual Return can be submitted starting from 1st April 2024 and has until 31 December 2024 to submit its BVI Annual Return.
How you can submit the BVI Annual Return
After the Return is completed it needs to be sent to the Registered Agent of the Company who has responsibility to collect and inform the BVI Registrar on the entities who did not comply with such submission 1 month after the deadline of the said company lapses.
Financial Year End
We get a lot the question from many clients on what the Financial Year-End period of the Company is and whether they can do a shorter/longer one.
The Financial Year End can be set by a written resolution of the Directors of the Company and needs to be communicated to the Registered Agent of the BVI Company especially in cases where the year end is not 31/12. Legislation does not provide for longer periods (i.e. it is not stated anywhere if your company is incorporated on 1 December 2023 whether the first annual return can be from 1 Dec 2023 to 31 December 2024, therefore no longer period are expected to be allowed currently.
Privacy of Filed Returns
As the annual returns are filed with the registered agent, the details of such remain confidential and within the custody of the agent, who must make the information available whenever requested pursuant to an obligation under an enactment. For example, the BVI Financial Service Commission may request the information in accordance with the powers granted to it under the Financial Services Commission Act, 2001; such would also be the case with regard to a request by the International Tax Authority under the Mutual Legal Assistance (Tax Matters) Act, 2003, the Financial Investigation Agency under the Financial Investigation Agency Act, 2003 and the Attorney General under the Criminal Justice (International Co-operation) Act, 1993.
Penalties
Based on the amendment the Registered Agent will have an obligation to inform the BVI Financial Services Commission, 1 month after the due date, on the Companies which did not fulfil this requirement. Failure by a company to file its annual return constitutes an offence and may result in fines and the Company not be deemed as in good standing or even result in the name of the Company been struck-off the Register by the Registrar.
Which BVI Companies are exempted from preparing an Annual Return?
The companies exempted from filing an Annual Return under section 98A(5) of the Act are the following:
- a listed company, meaning a company that is listed on a stock exchange;
- a company that is regulated under a financial services legislation and provides financial statements to the Commission in accordance with the requirements of that financial services legislation;
- a company that files its annual tax return to the BVI Inland Revenue Department accompanied by the company’s financial statements; and
- a company in liquidation, except that this exemption does not apply if the company’s annual return becomes due prior to the commencement of the liquidation.
Companies in liquidation
For companies already in liquidation, annual returns are not required to be prepared for any financial periods in which the company is in liquidation. Returns must however be filed in respect of all financial years prior to the commencement of the liquidation.
Currencies which can be used for the completion of the Return
Any currency can be used in which a Company prepares its financial statements. The reference in USD$ shown in the Annual Return Template can be substituted.
Accounting Standards which can be used in preparing the Return
Currently the BVI Business Companies Act does not prescribe specific Accounting Standards for the preparation of the Annual Return. We (Asterisk BVI) do prepare our accounting records and annual returns in accordance with the International Financial Reporting Standards (IFRS), as they are widely known and used, and also accepted in the BVI.
Does the Annual Return need to be audited?
No, the BVI Business Companies Act 2022 Amendment and the Financial Return Order do not prescribe that the Annual Return needs to be audited.
How you can prepare
As the BVI Annual Return will need to be completed in relation to the 2023 Financial Records and Activities of your BVI Company, we highly recommend you start collecting such documentation as it incurs, as well as engage with a professional from now if you will require any assistance.
Copy of the Return:
You can find a copy of the return in pdf format here.
How Asterisk BVI can help
We at Asterisk BVI specialize in the preparation of BVI Annual Returns, Accounting Records and Financial Statements and can assist with Accounting & Annual Return preparation in an efficient & cost effective manner.
We have also created the website https://annualreturn.vg where you can find a wealth of information on the Annual Return requirement and get assistance with preparation and completion of Annual Return for your Company.
You can contact us on how we can better assist you in the completion and submission of the return.
Summary of important things to know:
- You will need to submit an Annual Return (income statement and balance sheet) to your BVI Registered Agent;
- There will be exemptions to this requirement but limited (see above);
- If your company’s financial year is the calendar year, then your first submission will need to be done until 30 September 2024;
- No audit is required;
- You can use the currency in which your company prepares its financial statements;
- There will be penalties for late submission.
More material from BVIAccountants (AsteriskBVI) on Annual Returns:
- BVI Annual Return Submissions Commence: January 1, 2024 Kickoff
- A copy of the actual return template to be submitted
- Understanding the contents and form of the BVI Annual Return Template
- 6 Reasons why the BVI Annual Return requirement shouldn’t stress you out
- BVI Annual Returns: Exemptions and Privacy
- BVI Annual Return Unveiled: Your Comprehensive Q&A Guide
Disclaimer
Please note that the above article is for informational purposes only and does not constitute any form of advise.
Further clarifications
You can email us at contact@bviaccountants.com for more information, clarifications and how we can assist.
