Here’s a breakdown of what has changed and its implications.

1. Extension for filing annual financial returns

• Section 98A(2A) now authorises the FSC to grant extensions for filing annual returns
• These extensions:
  • Can apply to individual companies, classes of companies or all companies
  • Cannot exceed a cumulative period of 9 months
• Extensions can be granted either on a written application by a company or at the FSC’s discretion

Updated deadline: On 11 December 2024, the BVI FSC announced an extension for filing annual returns under the BVI Business Companies Act (2020). Companies initially required to submit their first annual returns by 30 September 2024 (ie those whose financial year end was 31 December 2023) now have until 30 June 2025 to comply.

The automatic extension does not apply to entities with other year end dates, so those with year-end dates which fell in the earlier months of 2024 may be in technical breach and should take steps as soon as possible to either provide their annual return or request an extension from the FSC if they cannot.

Failure to meet this new deadline requires registered agents to notify the FSC within 30 days, potentially triggering enforcement actions.

2. Notification adjustments for Registered Agents

Section 98A(4) has been amended to account for scenarios where extensions are granted. Registered agents must notify the Registrar of a company’s failure to file an annual return within 30 days after the extension period ends (instead of the original due date).

3. Support for complex financial situations

The amendment is particularly beneficial for companies in unique financial or operational circumstances, such as those undergoing liquidation or dealing with complex financial reporting. By aligning the regulatory framework with real-world challenges, the FSC ensures compliance without undue penalties or enforcement actions.

Companies that may need more than 9 months to produce complete statements for other reasons (eg, due to audit processes) may also wish to apply for an extension.

The amendments stem from practical challenges identified in the initial rollout of annual return filing obligations. With the first deadline set for 30 September 2024, many companies and their registered agents faced difficulties in meeting the timeline due to:

• Logistical hurdles
• The complexity of finalising the financials within a nine month period, especially for companies under audit
• Global compliance demands and evolving reporting standards

To address these issues, the FSC issued a circular on 26 September 2024, clarifying that no enforcement action would be taken against companies failing to meet the initial deadline (or registered agents for not reporting non-compliance). The amendments codify this leniency and provide a structured mechanism for granting filing extensions.

Previously, Section 98A required companies to file annual returns within 9 months of the end of their financial year. There was no provision for extensions, placing strict obligations on companies and their registered agents.

With the amendments:

• Flexibility is introduced through extensions
• Registered agents’ responsibilities are adjusted to align with the extended deadlines

1. For companies:

• Companies now have a clearer pathway to request extensions, ensuring they can comply without risking penalties
• This is especially helpful for those managing complex or consolidated financial statements or facing difficulties in obtaining financial data

2. For registered agents:

• Registered agents gain additional time to manage and report non-compliance cases, reducing administrative burdens under tight deadlines.

Companies operating within the BVI should take note of these changes, particularly the updated filing deadline of 30 June 2025 for initial annual returns. Registered agents, too, should update their processes to reflect the new obligations.

The BVI Business Companies (Amendment) (No. 2) Act, 2024 can be found here.

BVI FSC’s Industry Circular 44 on the Extension of date for filing of annual returns can be found here.