Effective January 1, 2023, BVI corporations are now obligated to provide a balance sheet and income statement in the form of a BVI Annual Return to their Resident Agents. In the ever-evolving landscape of corporate compliance, staying on top of financial record keeping is paramount, and this is particularly true for BVI corporations given the recent significant change in their obligations. In this overview, we’ll delve into the details of this requirement, its implications, and the exemptions that apply.
Financial records and accounts
In addition to their existing record keeping obligations, BVI corporations are required to provide a balance sheet and income statement, in the form of an annual return, to their Resident Agents, effective January 1, 2023. The requirement was introduced as an amendment to the BVI Business Companies Act, 2004 (“The Act”).
BVI Annual Return
The BVI Annual Return is required in the form of a balance sheet and income statement. While it is mandatory, corporations have the flexibility to prepare their Annual Returns in an abbreviated format and are free to use any currency.
Filing An Annual Return: A Timely Obligation
BVI corporations must file their Annual Return with their Resident Agent (which is not accessible to the public) within nine months after the end of the year. This year can be a calendar year, a fiscal year, or a financial year, depending on the corporation’s specific accounting practices. It’s crucial for corporations to determine the applicable year correctly to avoid any compliance issues.
Exemptions from Annual Return Requirement
While the Annual Return is mandatory for most BVI corporations, there are exemptions in place for certain entities. These exemptions include:
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- Corporations Listed on a Stock Exchange: Publicly traded companies in the BVI are exempt from the Annual Return requirement.
- BVI Regulated Corporations: Companies regulated by the BVI Financial Services Commission that already provide financial statements are also exempt.
- Corporations Filing Tax Returns: Corporations that regularly file annual tax returns with the BVI Inland Revenue Department are not required to submit an Annual Return.
- Corporations in Liquidation: If a corporation enters the liquidation process, it is exempt from the Annual Return requirement unless its Annual Return becomes due before the commencement of liquidation.
Failure to file the BVI Annual Return
Where a corporation fails to file its Annual Return, its Resident Agent must, no later than 30 days after the Annual Return is due, notify the BVI Registrar of Corporate Affairs. The corporation is liable to penalties from $300 up to a maximum of $5,000. Until such time as the delinquent Annual Return is filed, the corporation will not be authorized to make filings with the BVI Registrar of Corporate Affairs or obtain a Certificate of Good Standing until.
In conclusion, the introduction of the BVI Annual Return requirement is a significant development for BVI corporations, and compliance is crucial. Corporations must be aware of their specific obligations, exemptions, and the potential penalties for non-compliance. Staying informed and proactive in meeting these obligations will help ensure a smooth and compliant operation for BVI corporations under the BVI Annual Return framework.
