From 2 January 2025, several key amendments to the British Virgin Islands (BVI) company law have come into force. Companies already established in the region should be aware of these changes, as some have practical implications for their operations. Here are the main updates and their impacts on BVI companies.
Setting up a BVI International Business Company (IBC) is a popular choice for global entrepreneurs due to its simplicity, speed, and cost-efficiency. The British Virgin Islands (BVI) is also on the OECD white list, reinforcing its reputation as a compliant and reputable offshore jurisdiction.
A BVI IBC offers attractive tax advantages, including:
- 0% corporate tax on annual net profits
- No capital gains, inheritance, or estate taxes
- No withholding tax on dividends, interest, or royalties
Until now, BVI companies were required to submit beneficial ownership data through the Beneficial Ownership Secure Search System (BOSS). As of January 2025, this data must now be filed through the BVI Registry’s VIRRGIN platform. Like BOSS, this new platform will restrict access to specific law enforcement and regulatory bodies only. The information will not be available to the public.
However, companies involved in certain business activities must comply with the BVI’s Economic Substance Requirements (ESRs). These relevant activities include:
- Holding company business
- Banking
- Distribution and service centre activities
- Finance or leasing business
- Fund management
- Headquarters operations
- Insurance
- Intellectual property holding
- Shipping
To meet ESR obligations, companies must either:
- Demonstrate tax residency in another jurisdiction and file an annual declaration with the BVI authorities, or
- Establish tax residency in the BVI, which involves maintaining a physical office and employing qualified staff or active directors on the island.
Requirement to file a register of shareholders
A new legal requirement mandates that all BVI companies file their register of shareholders with the BVI Registry of Corporate Affairs. This register will not be public but will be accessible to authorised regulatory and law enforcement agencies.
Who needs to comply, and when
- For companies incorporated before 2 January 2025, the register must be submitted by 1 July 2025.
- Companies incorporated on or after 2 January 2025 must file the register within 30 days of incorporation.
- Updates to the register must be filed within 30 days of any change.
Historical shareholders who no longer hold shares do not need to be included. Public companies and certain investment funds are exempt from this requirement. If a nominee holds shares, additional information must be filed in the form of the name and address of the actual owner of the shares, known as the nominator.
Filing information on professional directors
BVI companies using BVI-licensed corporate directors must now submit the name of the licensed entity providing director services. If applicable, they must also include the name and address of the individual on whose behalf the director service is being provided. From 2023, the names of the directors will be publicly available (whether they use nominees or the client uses their own). Other personal information and former directors will not be accessible.
Updates to certificates of good standing
Certificates of good standing from the BVI Registry will now include confirmations that the company has met its filing requirements or that the filings are not yet due. These certificates will also include an expiry date from the date they are issued.
Increased penalties and regulatory powers
The amended legislation introduces significantly higher penalties for non-compliance. Failure to file annual returns with the registered agent by the due date can result in a fine of up to US$50,000.
Additionally, failing to collect or update beneficial ownership records accurately may result in a penalty of up to US$75,000. BVI companies now have a legal duty to cooperate with requests from regulators and law enforcement agencies. The Financial Services Commission also has new powers to require information on any aspect of a company’s business or operations.
What’s coming next?
The beneficial ownership data filed in the VIRRGIN system is currently not publicly accessible. However, new legislation is expected within the next three months. It will allow people with a “legitimate interest” to access ownership information. It is still unclear what qualifies as a legitimate interest and how this access will be controlled.
The upcoming regulations may:
- Define who qualifies as having a legitimate interest
- Clarify who does not have a legitimate interest
- Potentially limit access to owners holding 25% or more, even though the filing threshold is 10%.
These updates bring greater transparency and closer alignment with international compliance standards. It is essential to stay informed about your obligations and meet all filing deadlines to avoid penalties.
For any questions or clarifications, reach out to C2Z experts who can help in growing your business in the BVI.
Where an entity claims to be tax-resident outside the BVI, the ITA will send a notification of this claim to the tax authorities of the specified foreign jurisdiction. In addition, if the beneficial owner of the entity is resident in an EU member state, the ITA will notify the competent authority of that EU member state that the entity is claiming tax residency outside of the BVI, and the ITA will provide the competent authority with the name of the jurisdiction in which tax residency is being claimed.
