Introduction
The BVI Business Companies Act (as amended) (the "Act") introduced the requirement for BVI companies to file an annual return (otherwise known as a financial return) with its registered agent, with effect from 1 January 2023. The BVI Government has now published the BVI Business Companies (Financial Return) Order, 2023 (the "Order") which provides a template form of the annual return and some further guidance for the industry.
The annual return takes the form of a simple unaudited balance sheet/statement of financial position and an income statement. Neither the Act or the Order prescribe for any particular accounting standard to be used and therefore companies can continue to apply any accounting standard they have been using to date.
Once completed, the registered agents will hold the annual returns and will only be required to submit a copy upon request by the Financial Services Commission (the "Commission") or a competent authority. The annual returns will not be made publicly available or a matter of public record.
Do all BVI companies have to file an annual return?
No, the requirement to file an annual return does not apply to:
- listed companies (being companies listed on a stock exchange);
- regulated companies – i.e. those regulated under financial services legislation who already provide financial statements to the Commission in accordance with the relevant financial services legislation;
- companies that file annual tax returns to the Inland Revenue Department accompanied by their financial statements; and
- a company in liquidation, so long as the annual return does not become due (see below) prior to the commencement of the liquidation.
Do BVI limited partnerships have to file an annual return?
No, this requirement applies to BVI companies only.
When does the return need to be filed?
A company must file its annual return within nine months of the end of their fiscal or financial year end, which is the date that the annual return becomes due under the Act. For example, if a company has 31 December as their financial year end, the return becomes due on 31 December and then the company has nine months within which to file the return, meaning that the annual return must be filed by 30 September in the following year. The first deadline for filings to be made under the Act will be 30 September 2024 (for companies with a financial year end of 31 December).
If a company has not yet established a financial or fiscal year end we suggest that a simple board resolution is passed to establish a date.
What happens if a company does not comply?
If a company fails to file its annual return, the registered agent is obliged to notify the Registrar of Corporate Affairs (the "Registrar"), in writing, within 30 days after the annual return was due.
Financial penalties will be imposed on the company for failing to file the annual return. The financial penalties are as follows:
a) for the first month or part thereof after the filing of the annual return was due, the penalty shall be US$300; and
b) for each month or part thereof after the first month referred to in (a), the penalty shall be US$200, up to a maximum of US$5,000.
If the company has failed to file the annual return and is liable to the maximum penalty, the Registrar may proceed to strike the name of such company off the Register.
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