On 18 January, His Excellency the Governor, Mr. John Rankin, delivered his first Speech from the Throne and the ears of the financial services industry pricked as we heard that:
"The BVI Business Companies (Amendment) Act, 2022 will mainly address issues surrounding struck-off companies, abolition of bearer shares, and record-keeping measures. The reforms will also include amendments to require persons wishing to act as voluntary liquidators of BVI business companies to be either licensed insolvency practitioners or persons resident in the Virgin Islands and holding specific qualifications and skills. Amendments will also be effected to Schedule 1 of the Act by reviewing and, as necessary, enhancing the registry fees regime" (the emphases are mine).
Our clients are now asking what these new measures will look like.
The news in relation to the rather antiquated concept of bearer shares comes as no surprise; BVI companies have been unable to issue them for more than ten years as we all knew it was only a matter of time before they were abolished completely.
What is more interesting is the changes to the strike off regime, record keeping, and voluntary liquidators. While we don't know exactly what the changes will look like, the BVI Financial Services Commission (FSC)'s consultation document gives us a good steer:
- in relation to strike off, it is proposed that companies are dissolved after a period of strike off of 12 months, rather than seven years. Subsequently, court-based restoration will only be possible where:
- it is purely for the purpose of commencing or continuing legal proceedings in relation to the company;
- it is purely for the purpose of defending an action against the company; or
- it is purely for the purpose of distributing outstanding assets or claiming assets that have vested in the Crown bona vacantia;
- in relation to record keeping, where records and underlying documentation are maintained outside the BVI, there is likely to be a requirement that copies of such records and underlying documentation should, at least once a year, be filed by the company with its registered agent and that such copies agent must relate to a company’s financial statements (audited or, if unaudited, the unaudited statements), balance sheet, profit and loss account with relevant schedules and annual reports; and
- going forward, persons wishing to act as voluntary liquidators of BVI business companies will have to be either licensed insolvency practitioners or persons resident in BVI and holding specific qualifications and skills.
We have certainty on fees as the FSC has already made an order relating to continuation fees and fees for foreign registered companies. The details can be consulted here, but the most salient change is that the Registry fee for companies continuing in to the jurisdiction has halved, to $500. It makes perfect commercial sense to incentivise companies looking to avail themselves of the BVI Advantage and we welcome this change.
To discuss any of these issues in more detail, please contact Ellie Crespi, BVI Managing Partner and head of Collas Crill's corporate, finance and funds team on the island.
