Latest amendments to the BVI Business Companies Act 2004

In September, the House of Assembly in the BVI passed a set of amendments to the BVI’s Business Companies Act (the principal piece of corporate legislation in the BVI). These amendments are not yet in force as of the time of writing, although are expected to be enacted soon.

The key changes to the law will include the following:

• A company’s register of members will be required to be filed with the Registrar of Corporate Affairs (the Registrar) on a private basis.
• New registration requirements will apply for companies which have “nominee” shareholders and which use licenced professional directors.
• New requirements will apply to continuations out of the jurisdiction aimed at preventing companies from using the migration process to avoid any regulatory action or pending litigation.
• Companies will have an express duty to co-operate with regulators and the Registrar will be granted additional enforcement and information gathering powers.
• Impacted persons will be able to apply for court rectification of a company’s register of directors.

The amendments are being introduced to ensure the BVI keeps pace with international best practices and with international standards established by standard-setting bodies such as the Global Forum on Transparency and Exchange of Information for Tax Purposes and the Financial Action Task Force. In particular, with these amendments the BVI has taken steps to ensure the jurisdiction moves quickly to address the recommendations made in the Mutual Evaluation Report published earlier this year. The BVI remains committed to having a robust, modern corporate and regulatory framework and to fighting financial crime in all its forms.

In this client update, we will use the term Amended Act to refer to the principal legislation as it will be once these amendments are in force.

Companies will now be required to file their register of members with the Registrar on a private basis. This is similar to requirements introduced several years ago for the register of directors. Shareholder information will not be publicly available or searchable.

The Amended Act will allow for a transitional period of six months (which will start from the date the legislation is brought into force) to give existing companies time to come into compliance. Newly incorporated companies will need to comply from the date of incorporation.

There are new registration requirements for companies which have “nominee” shareholders and/or licensed professional directors. This will require companies to file both the names of the relevant directors and nominees but also details of any individuals on whose instructions the professional director or nominee shareholder is acting.

As with the register of members, this information will not be publicly available or searchable. A transitional period will also apply.

Persons who may be aggrieved by an omission or inaccuracy (or a delay to the updating of information) in a company’s register of directors will have a statutory power to apply for court rectification.

This aligns with similar rights already available in relation to a company’s register of members.

On 1 January 2023, amendments were made to the Act to include a framework for the future introduction of a public beneficial ownership register in the BVI which, at that time, was expected to broadly align with the UK’s model.

Given developments in global market practice (including a European Court of Justice decision which emphasised the need to balance transparency with privacy), it is now anticipated that the BVI will have a public beneficial ownership register which is only accessible to those who can show they have a legitimate interest in the information sought. The Amended Act provides some of the framework around that register, including critical exemptions for public companies and funds.

However, much of the detail, including the crucial question of how “legitimate interest” will be defined and measured, will be in supplementary legislation which is yet to be made public. We are aware of the interest from many clients on this point and will bring further updates as soon as we have them.

Companies wishing to continue their corporate existence outside the BVI will need to confirm to the Registrar that there are no pending proceedings, outstanding regulatory requests, or receivers appointed over the company or its assets. The changes supplement the additional protections for creditors and members introduced in 2023. We have not seen wide use of the continuation process by entities in litigation or under investigation and we expect this will impact few entities, although clients who are currently contemplating a continuation to another jurisdiction should factor in the possibility of some changes to the documentation needed and the process.

Minor changes have been made to the provisions regarding the restoration of dissolved companies to give companies a 14 day window from the date of restoration to comply with the record keeping obligations on all BVI companies. This applies to both court ordered restorations and those using the administrative restoration regime introduced in 2023.

A focus of the legislation is ensuring the BVI’s regulators have the right tools, and quick access to the information they need, to discharge their functions. The Amended Act introduces an express duty on companies to co-operate with competent authorities and BVI law enforcement agencies. The Registrar also has a new power to require a company to provide a “return” on its business and affairs.

There is no need for entities to take immediate action at this stage. Although additional information will need to be provided to the Registrar (once the legislation is in force), the majority of this information should already be in the hands of their registered agent and if their records are up to date the administrative burden on clients should be limited.

Harneys will be providing further updates on the legislation, as market practice develops, and regulatory guidance becomes available, and we will be providing greater detail on some of these topics in due course.

Any clients who have particular concerns should feel free to contact the authors or their usual Harneys contacts.