At a recent BVI Finance Breakfast Forum, industry stakeholders were briefed on the major updates to the BVI Business Companies (Amendment) Act, 2022 and the BVI Business Companies (Amendment) Regulations, 2022.
The special breakfast forum, which attracted over 300 stakeholders, was facilitated by BVI Financial Services Commission, including Managing Director/ CEO Mr. Kenneth Baker; Director, Policy Research and Statistics Mr. Cherno Jallow, KC; and Director, Registry of Corporate Affairs Mrs. Myrna Herbert.
In his opening remarks, Mr. Baker stated that 2022 has been a “challenging and busy year for the FSC on the legislative front”, alluding to the legislative changes made thus far. Mr. Baker also indicated that even more legislative reforms were on the horizon for 2023, which would be outlined in the budget address of the Minister of Finance later this year. He called on the industry practitioners to keep attuned to current and emerging reforms and engage with the Commission accordingly.
Mr. Cherno Jallow, KC outlined the changes made to the BVI Business Companies Act and the BVI Business Companies Regulations, and provided further clarification during the forum’s Q&A. The amendments included the abolition of bearer shares; requirements for the appointment of voluntary liquidators; restrictions in relation to companies engaging in both commercial and non-commercial or charitable business; changes in the striking off and dissolution of companies regime and how legacy companies were to be treated; new financial reporting rules for BVI Business Companies (BCs); refining the continuation of BVI BCs outside the Territory; access to the list of directors; and inclusion of alternate directors in the register of directors.
Regarding the amendments, Mr. Jallow, KC indicated that these were the result of discussions and consultations that began two years ago in collaboration with industry stakeholders. The amendments to the Act and Regulations were gazetted on August 12, 2022 and would come into effect on January 1, 2023.
On the Abolition of Bearer Shares, the Policy Director said “of all the comments received, everyone was in agreement” with the proposed measure to abolish the bearer shares regime. By July 1, 2023, all existing bearer shares which would not have been redeemed or converted into registered shares would be deemed converted to registered shares to be held by the company concerned in trust for the person entitled to the shares.
Come January 1, 2023, to be appointed a voluntary liquidator an applicant must be physically resident in the Territory for not less than 180 days prior to appointment, although this requirement would not apply to a non-resident voluntary liquidator in the case of a joint liquidation. Mr. Jallow, KC also shared that the Act further provides a legal framework for establishing necessary qualifications and criteria (specified in the Regulations) for persons who may be qualified to be voluntary liquidators; and establishes requirements for voluntary liquidators to collect and maintain records.
Regarding Charitable or Non-Commercial Business, the company is required to submit to the Registrar its annual audited statements in relation to the company’s charitable or non-commercial business (amongst other obligations). He also gave an overview of the updates surrounding the Dissolution and Striking-Off of Companies. When a company has defaulted, the Registrar is required to provide notice to the company concerned, and is given a period of up to 90 days to be regularised. If the company fails to comply, the Registrar has the legal mandate to strike the company off the Register, and dissolution automatically follows.
In addressing the Filing of Annual Returns, Mr. Jallow, KC noted that amendments were not yet finalised, because the Commission felt that further dialogue on the subject needed to be had with the industry.
With respect to existing companies, a new Part VIIA has been created under Schedule 2 of the Act outlining how such companies would be transitioned into the new reforms outlined under the Act.
In her intervention, Mrs. Herbert gave a brief update on the work being carried out by the Registry of Corporate Affairs to ensure a smooth application of the new reforms when the amendments take effect on 1st January, 2023. She advised that VIRRGIN (the technology used to facilitate business transactions under the Act and the Regulations) was being reformed to accommodate the new requirements brought on by the amendments to the BVI Business Companies regime. She and her team were working ‘round-the-clock’ to ensure that VIRRGIN would be ready to facilitate the new elements contained in the Act and the Regulations.
At the conclusion of the forum, the Commission representatives told participants that there would be further communication on the regulatory updates with a view to compiling FAQs to assist practitioners and their clients to have a better understanding and appreciation of the new aspects of the Act and the Regulations. Any queries can be sent via email to firstname.lastname@example.org.
BVI Finance notes that the reforms to the Act and the Regulations are part of the Territory’s continual assessment of the BVI Business Companies regime in order to better respond to changing global dynamics that relate to or affect the operation of companies as well as to respond to the needs and suggestions of players within the BVI financial services industry.
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Industry stakeholders can read more about the amendments here: https://www.bvifsc.vg/sites/default/files/act_no_6_of_2022-_bvi_business_companies_amendment_act_2022_1.pdf and https://www.bvifsc.vg/sites/default/files/si_no_73_of_2022-bvi_business_companies_amendment_regulations_2022.pdf.