Update on BVI company law and the collection of Beneficial Ownership information

Most of these legislative changes have been anticipated for some time. The principal driver is to ensure the BVI remains at the forefront of international best practice in the battle against financial crime and complies with global standards. More specifically, they swiftly address recommendations made in the Mutual Evaluation Report published by the Caribbean Financial Action Task Force in 2024 and also meet commitments made by all the UK’s Overseas Territories to the United Kingdom.

This update focuses on the amendments to the BVI Business Companies Act (the Act) and Regulations and Statutory Instruments promulgated under that Act, but the festive legislative rush also included important updates for limited partnerships and regulated entities on which Harneys will be providing separate updates soon.

The changes to the Act which were passed earlier in 2024 (see our detailed client alert here) have been brought fully into force with effect from 2 January. Most of the changes are administrative in nature and relate to the record keeping and filing obligations on BVI companies.

Key features of the amendments include:

• Changes to the BVI’s system for maintaining and registering beneficial ownership information (discussed further below).
• A company’s register of members must now be filed with the Registrar of Corporate Affairs (the Registrar), although it will remain private and not publicly searchable. The BVI Government and the FSC have made clear in numerous forums that the BVI will not be implementing a fully public register of beneficial ownership information, but a consultation on allowing some access to those with a legitimate interest in the information is expected to begin soon (as discussed further below).
• New registration requirements apply for companies with “nominee” shareholders or using licenced professional directors – such companies are now required to maintain registers containing certain information and to provide the same to regulators.
• New requirements apply to “continuations out” of the jurisdiction to prevent companies from using that process to try to avoid pending regulatory requests or legal proceedings (including litigation or other civil or criminal proceedings).
• Companies will have an express duty to co-operate with regulators and the Registrar will be granted additional enforcement and information-gathering powers.
• Interested persons are now able to apply for rectification of a company’s register of directors by the court.
• Companies which have been restored are given a 14-day window to conform with certain record-keeping and filing obligations.
• Companies now have an express duty to co-operate with regulators and the regulator has the power to request returns containing certain information

Those companies incorporated before the start of 2025 benefit from a transitional period of at least six months to file their register of members (and, where relevant, details of nominee shareholders and professional directors). That extension will expire on 2 July 2025. The legislation allows for a further six-month extension to be granted, although the Financial Services Commission (FSC) has commented in industry meetings that, given the delay in bringing the legislation into force, it does not expect that extension to be necessary.

New BVI companies established in 2025 will need to comply from incorporation. Equally, companies that have been struck-off and dissolved will need to comply to be restored.

Most of the information required to comply with these requirements should already be held by the BVI registered agent, although they may have some work to do ensuring that records are up-to-date and in the correct format. The administrative burden on end-clients will hopefully be relatively limited. We expect that registered agents will be reaching out to clients to confirm information they hold remains up to date. Some clients may want to take specific advice on their obligations or the requirements – particularly if they are unable to obtain (or have other concerns regarding) the required information.

The amendments to the Act passed in September 2024 created a framework for changes to the way in which BVI Companies are required to collect and file beneficial ownership information. Further details have now been provided in industry updates given by the FSC, and in Regulations and Guidance published in December.

Since 2017, BVI Companies have been required to provide and, via their registered agent, to file beneficial ownership under the Beneficial Ownership Secure Search System Act, using the system known as “BOSS”. BOSS is to be phased out for various reasons but currently remains the portal being used for reporting economic substance information. Our full guides to economic substance compliance and reporting are available here. Further improvements to the economic substance reporting system are expected.

Although the BOSS system was trailblazing when introduced, the BVI will now collect and maintain information via the VIRRGIN system, which is used for the main company registry. For more details on this, particularly for registered agents (on whom the burden will fall more heavily), please see our blog post here. The amendments to the Act allow for this transition, as well as making a number of other technical updates and clarifying the definition of a “beneficial owner”.

Under the new rules, all BVI companies (and limited partnerships) have an express statutory obligation to collect, keep and maintain adequate, accurate and up-to-date information on their beneficial owners. That information will need to be filed with the Registrar either within 30 days of incorporation (for new entities) or by the end of the transition period for grandfathered pre-existing entities. Any future changes will need to be notified to the registered agent and filed within 30 days.

Beneficial owners are defined as natural persons who ultimately own or control 10 per cent or more of the relevant company or limited partnership or exercise control over its management. As the definition encompasses both ownership and control, it captures both legal ownership, economic ownership and voting rights. The 10% threshold reflects the BVI’s longstanding AML threshold, although generally only information on ultimate beneficial owners with a 25 per cent or greater interest (which is the commonly-used global standard) will be shared under international information exchange arrangements.

Almost all the information to be included on the new beneficial ownership register (the BO Register) was already collected via AML requirements or BOSS, with the new data fields being gender and occupation, as well as a new requirement to clarify the capacity in which that person is a beneficial owner.

The controllers and owners of BVI entities should be aware of the need to notify the registered of any changes in their beneficial ownership information and should also look out for communications from their registered agent in the next few months, who we expect will to be reaching out to confirm the information currently held and gather any missing information needed to populate the new data fields ahead of filing.

There are some exceptions to the obligation to identify beneficial owners. Entities whose shares are listed on recognised exchanges (which captures all the world’s leading stock markets, including in the United States, London and Hong Kong) are broadly exempt.

Equally, all the BVI’s regulated fund vehicles (private, professional, public, private investment, incubator and approved fund) are also exempt provided that (i) the information is maintained by a BVI regulated administrator or an authorised representative or other person licenced by the FSC with a physical presence in the BVI and (ii) the information can be provided with 24 hours.

Companies subject to disclosure and transparency rules contained in international standards, equivalent to those for listed companies or specified funds, may also apply for exemptions. Where a company's shares are held by a trustee licensed under the Banks and Trust Companies Act, the company is only required to file the name of the trustee as its beneficial owner.

There is also an exemption for companies which are 75 per cent or more owned by another legal entity that itself complies with the beneficial ownership filing requirements (or is itself exempt). This is intended to prevent duplication where there is a chain of BVI entities.

Broadly, exempt entities are still required to notify the Registrar of and provide certain basic details regarding their exempt status.

The BVI Government and regulators are keenly aware that for much of the industry the question of who will have access to beneficial ownership information and what information they will be able to access is more significant than the questions of on what portal it is held or which regulator has custody.

The BVI Government and the FSC have made clear in numerous forums that the BVI will not be implementing a fully public register of beneficial ownership information until such registers become a global standard (which feels increasingly remote in view of developments elsewhere, notably judicial decisions in the EU and US). The BVI is considering a model which would allow access to certain beneficial interest information to persons who can demonstrate a “legitimate interest” in it (eg, in connection with fighting financial crime). The other UK Overseas Territories, including Bermuda and Cayman have committed to taking similar steps and are at various stages in the legislative process. Although limited details are available at this point, the BVI is broadly expected to be aligned with them.

Although it has not been commenced at the time of writing, we understand that the BVI Government is expecting to launch a consultation in early 2025 on how such legitimate interest access might work including the scope of information that is subject to it, what constitutes a legitimate interest, how to protect vulnerable individuals and how to balance the fundamental desire to prevent financial crime or other misuse with the desire to protect the privacy and other rights of the lawful and legitimate users of BVI companies.

We expect to be able to provide more information on this subject in the very near future and we recognise it is of importance to clients.

At the start of 2023, the BVI introduced a requirement for most BVI companies (subject to certain exemptions) to prepare and file a brief and simple annual return with their registered agent or face penalties. For companies with a 31 December year-end, those returns were due at the end of September 2024 (ie, nine months after the end of the 2023 financial year). As that deadline approached, it became clear that, while most entities had complied, others were struggling with various legitimate practical issues such as audit periods or complex financial positions.

Accordingly, the Act has been amended to allow the FSC to grant both specific and general extensions to the nine-month period. A general extension has been granted to all entities with a 31 December 2023 year end, which now have until 30 June 2025 to provide the return. This supersedes a previous statement by the FSC confirming that it would not take action against companies failing to meet the initial deadline (or registered agents for not reporting non-compliance).

There is no need for those entities which have already provided their annual return to take any action, but those who have not should check whether they are covered by the extension or (if they cannot get themselves into a compliant position very shortly) need to request one.

For more on this change, see our more detailed blog post here.

To obtain a certificate of good standing, a company must have filed its register of directors and register of members and beneficial ownership information with the Registrar and the Registrar must not have received a notification of failure to file the company’s annual return from the registered agent. Certificates of good standing now also bear an expiry date.

Harneys continues to be at the forefront of the legislative development of the BVI and to play an active role in the industry response to changes.

As with any new law, market practice and ultimately jurisprudence will develop over time. These changes will require a number of technical updates to systems and software (for both registered agents and regulators), not all of which are currently live, and so some of the practical aspects will also be fleshed out in the coming weeks and months. We will continue to keep our clients updated.

If you have any questions in relation to these issues feel free to contact the authors or any of your usual Harneys contacts.