Understanding the Latest Changes to BVI Company’s Financial Reporting

Recent amendments to the British Virgin Islands (BVI) Business Companies Regulations have introduced significant changes to the financial reporting requirements for companies operating in the jurisdiction. These amendments, which came into force on January 1st, 2023, aim to enhance transparency and accountability in financial reporting practices. One of the most crucial requirements is the filing of an annual return containing specific financial information with the company’s registered agent.

Key Requirements

Under the new regulations, all BVI companies must file an annual return with their registered agent. This return must include financial information such as a Balance Sheet and an Income Statement, using a prescribed template. The first annual financial return must be filed within nine (9) months after the end of the company’s financial year ending on or after December 31st, 2023, giving companies until September 30th, 2024, to comply. Companies with a different fiscal year-end should contact their registered agent for guidance.

Record Keeping

In addition to the annual return filing, companies are required to maintain records and underlying documents that enable the financial position of the company to be determined. If these records are kept at a location other than the office of the company’s registered agent, the company must provide written details of the location and the person maintaining the records.

Filing and Presentation

The annual financial return does not need to be audited or certified by a public accountant. Companies can present the financial return in US dollars or any other currency used for their financial statements. The financial return will be kept privately at the offices of the registered agent and will not be filed with the Registry of Corporate Affairs or made public. However, competent authorities may request a copy if necessary.

Exemptions

Some companies are exempt from filing an annual financial return, including listed companies on recognized exchanges, regulated companies under BVI Financial Services legislation, companies that file annual tax returns with the BVI Tax Authority, and companies in liquidation (unless the annual return becomes due before liquidation begins).

Penalties

Failure to file the annual financial return by September 30th, 2024, will result in penalties. The registered agent must notify the BVI Registrar within 30 days of the due date if the company fails to comply. Fines for late filing range from US$300.00 for the first month or part thereof, up to a maximum of US$5,000.00. The Registrar may strike the company off the register if it is liable for the maximum fine and fails to file the annual return.

Registered Agent Obligations

Registered agents are also subject to penalties if they fail to report a company to the Financial Services Commission. In such cases, the penalty is US$3,000.00.

In conclusion, the recent amendments to the BVI Business Companies Regulations introduce important changes to financial reporting requirements for BVI companies. It is essential for companies to understand and comply with these regulations to avoid penalties and ensure transparency in their financial operations.

How Abitos can assist:

AbitOs specializes in the unique tax needs of high net-worth entrepreneurs, including those with international lifestyles, LATAM, Canadian, and other non-US entities doing business in the U.S., as well as U.S. entities doing business in those countries and across the globe. If you would like to benefit from our expertise in these areas or if you have further questions on this Alert, do not hesitate to contact us.