Media & Resources
The British Virgin Islands are creating a regulatory framework for further disclosure of information about beneficiaries
DATE: November 18, 2022 | AUTHOR: AT
On August 10, 2022, the British Virgin Islands (hereinafter referred to as “BVI”) adopted amendments to the BVI Business Companies Act (2022). The amendments enter into force on January 1, 2023.
The amendments provide that the Government of the BVI may at any time adopt Regulations according to which the information contained in the Register of Controlling Persons will become publicly available.
Previously, the BVI Government made statements that a public register of beneficiaries would be put into effect by 2023. However, there is no information about the exact timing when the Register will be established and made public.
Practical implications for BVI companies beneficiaries
The amendments contain general rules necessary for further adoption of acts of the Government in order to create a public register of beneficiaries. The information from the public registry will be available not only to the tax authorities, but also to the general public. This may affect beneficiaries of BVI companies who may have escaped CRS information exchange by closing bank accounts (e.g. for holding BVI companies) or by providing to financial institutions information on their tax residency which does not match their actual tax residency. Once the register of beneficiaries is made public, the tax authorities may proactively search for the necessary information.
Other changes
According to other amendments to the BVI Business Companies Act (2022):
- the 7-year period of company being in status “struck-off” is canceled, all companies that will be crossed out of the
Register on January 1, 2023, will be automatically dissolved (that is, cease to exist and get the status “dissolved”)
from the date of official publication about the crossing out of the company from the Register.
Recommendation: BVI companies that are currently struck off the Register, but plan to continue operations or have assets, are recommended to initiate reinstatement to the Register and return to “good standing” status by the end of this year (2022). In case of automatic dissolution of the struck off company, the assets belonging to it will become the property of the state (i.e. the British Crown);
For companies that will be crossed out of the Register, the possibility of quick reinstatement is provided, an application for reinstatement can be submitted to the Register within 5 years from the date of dissolution;
- the liquidator appointed by a company in a voluntary dissolution procedure must now have proven professional qualification and have two or more years of experience in company dissolution; in addition, he or she must actually have lived in the BVI for at least 180 days (continuously or cumulatively) before being appointed as liquidator;
- companies are required to send their registration agent annual financial statements within 9 months after the end of the fiscal year, the details of the annual report will not be public.
Suggested actions
Regardless of no fixed deadline for the register of beneficiaries to come into force, it may be sensible to reassess the corporate structure to ensure that the information on UBOs provided to the registered agent is up to the date and that the beneficiary is in compliance with the CFC rules in the jurisdiction of their tax residence. For redundant structures liquidation of excess companies may be considered, which may be assisted by Russian tax benefits for transfer of assets from CFC or the UBO.
We hope that the information we provide will be helpful. We will keep you informed of further developments!