For some time, all BVI companies have been required to maintain records and underlying documents which (a) are sufficient to show and explain the company’s transactions, and (b) are reasonably accurate at all times in determining the company’s financial position. These requirements remain in effect. These records may be kept at the registered office of the company in the BVI, or at such other place as may be notified to the registered agent.
However, subject to limited exceptions, from 1 January 2023 BVI companies are now required to provide certain financial information to their registered agent on an annual basis in the form of a Financial Annual Return (the ‘Return’ or ‘Annual Return’), although, in practice, the first filings will not be due until 2024.
In this article, we examine the rationale behind the implementation of this requirement in the BVI, and provide you with key information in a detailed and summarised format to facilitate your understanding on the requirement and assist you in complying with this new requirement.
As background, the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) requires jurisdictions “to ensure that reliable accounting records are kept for all relevant entities and arrangements.” The copies of accounting records and underlying documentation kept must relate to a company’s financial statements, balance sheet, profit and loss account with relevant schedules and annual reports.
The Global Forum requires that where records and underlying documentation are maintained outside of the jurisdiction, copies of such records and underlying documentation should, at least once a year, be filed by the company with its registered agent.
The BVI has introduced the Annual Return to address this requirement ensuring that competent authorities are able to access the necessary information within expected timeframes for international cooperation, without the need for full accounts to be filed at the Registry of Corporate Affairs.
The form of the Return is a simple Income Statement and Balance Sheet. You can see a copy of the Return here.
The Return does not need to be audited and can be prepared under any of the recognised accounting standards. For our clients we use the International Financial Reporting Standards (IFRS).
The filing of Returns can commence from 1 January 2024 depending on the financial year end of each Company which will have 9 months after the end of its Financial Year to make the relevant submission. Therefore, if your BVI Company has a Financial Year End on 31 December 2023, filing of the return with the Registered Agent will need to take place before 30 September 2024.
Where a company's year-end was not previously determined or the current year end needs to be changed, such a decision should be recorded by the usual board resolution.
As per the BVI Business Companies Act, the Return will need to be submitted with the Registered Agent of the BVI Company in question. Our clients will be able to submit their Return either through the specialised platform we have developed for our clients (Ascentium Client Connect Portal) or through email and spreadsheets for bulk submissions.
The following entities are exempt from annual return filing requirements:
Returns will not be filed at the Registry of Corporate Affairs (Registry) unless requested and details will not be publicly available. The Registered Agent is required to inform the Registry if they have not received the Annual Return within 30 days of the deadline.
Ascentium has a specialised Accounting Services department which is well versed and aware of the new regulation and is ready to assist you by offering:
Contact us today for more information on the Annual Return and how we can assist you.