British Virgin Islands Legislative Amendments

Following our previous notification dated May 2019, The British Virgin Islands (BVI) has passed legislation requiring certain legal entities carrying on Relevant Activities to demonstrate adequate Economic Substance in the BVI.

Furthermore, each BVI company must now file reports with the International Financial Services Commission regarding the outsourced business activities, if any, including information about the number of employees, office expenditures, and any other information, which the Commission may deem necessary to be submitted.

Bearing in mind all the above amendments, it may be said with certainty that BVI companies will find themselves at a crossroad in 2019.

The Economic Substance Act of 2018 (“ESA”), came into force on January 1st, 2019. To help you comply with this new legislation, we have designed an online interactive portal where you can obtain the necessary information of your company’s activities and therefore, facilitating the company’s self-assessment on any Relevant Activity.

If your company is not carrying on any Relevant Activity and we do not receive notification before the end of its financial period regarding any changes, we will understand that your company has not carried out any Relevant Activity during its financial period.

If your company is carrying on a Relevant Activity, we will be contacting you before the end of its financial period to request the applicable information/documentation requested by law.

As you know, the BVI authorities have introduced massive amendments to their laws as all companies in BVI are in-scope of the EU Substance legislation. The end goal is for BVI Companies to be able to demonstrate their basis for classification, as well as to maintain proper bookkeeping and any other relevant information and/or documentation in the event that authorities request it.

Under the new legislation, any company and/or individual failing to classify shall be subject to significant fines and other penalties, such as the possibility of being struck off, and – in very extreme cases-, imprisonment of non-compliant individuals for up to 5 years.

Having mentioned the above, we strongly advise clients to provide us with instructions for immediate action and in order to classify your BVI Company to ensure the continuity and compliance of your business.

If you have already classified your company, but require further assistance, we need to ensure that this classification has been supported by the required information. This includes the reasoning by which the classification has been reached, with appropriate reference, where necessary, to the relevant BVI Economic Substance guidelines.

Once you have determined whether your classification is ‘in’ or ‘out’ of scope, we advise that you consider a full portfolio review and professional / legal opinion on the basis of substance legislation.

Eurofast is ready to quickly and affordably evaluate the substance adequacy which your entity requires in order to maintain your business in the BVI, perform filing of your entity’s status, as well as the service of re-domiciliation of companies from BVI to Cyprus, Bulgaria, Seychelles, Serbia and other jurisdictions.