Effective from January 1, 2023, the British Virgin Islands (BVI) Business Companies Act underwent revisions. One of the notable changes is the introduction of a new annual return requirement for BVI companies. These companies are now obligated to submit an annual return to their registered agent, outlining specific financial details, unless they qualify for exemptions. The annual return must be filed within nine months of the calendar year's end or at the close of the company's financial year, if different. The initial return is mandated for the 2023 financial year, with the deadline for submissions set by the end of September 2024 for companies following a calendar year cycle.
New Annual Return Form
The annual return must encompass the data specified in the BVI Business Companies (Financial Return) Order (As Revised), which includes a template for the annual return. This template consists of a straightforward balance sheet/statement of financial position and an income statement. Notably, there is no requirement for the annual return to undergo auditing or adhere to a specific accounting standard. Companies can present the return in US dollars or any other currency used for their financial statements. In cases where a company is part of a group that prepares and maintains consolidated accounts, the company can submit the group's consolidated accounts if they include the company's accounts. Additionally, if there are multiple BVI companies within a group, a single filing that presents the annual returns for each BVI company is permissible.
The annual return will be retained at the registered agent's offices, but it will not be submitted to the BVI Registrar of Corporate Affairs or made publicly accessible.
Penalties for not Filing Annual Return
If a company does not file its annual return on time, the registered agent has to notify the Registrar within 30 days of the date the annual return was due.
Failure to file the annual return on time is an offence and may result in prosecution or a fine against the company up to a maximum aggregate penalty of US$5,000. Where a company is liable to the maximum penalty, the Registrar may also strike the defaulting company off the register. Non-compliance will be reflected on a company's certificate of good standing.
Exemptions
Under s98A(5) of the BC Act, the following companies are exempt from having to file an annual return:
A listed company, being a company any securities of which are approved for listing on a recognised exchange;
A company regulated under BVI financial services legislation that provides financial statements to the Commission in accordance with the requirements of that financial services legislation. This includes regulated mutual funds, private investment funds and approved managers;
A company that files annual tax returns (with its financial statements) with the BVI Inland Revenue;
A company in liquidation, except where the company's annual return becomes due before the commencement of the liquidation, in which case the company's liquidation is not complete until the company files the annual return.
The annual return requirement only applies to BVI companies, not also BVI limited partnerships.
Contacts
If you require assistance in relation to the above and/or would like to discuss anything further, please do not hesitate to contact info@act.london or your usual A.C.T. contact.