As you may already know, the BVI Business Companies Act has been amended and effective from 1 January 2023, BVI Business Companies will need to submit an Annual Financial Return (‘Annual Return’) to their Registered Agent 9 months after their financial year end. This BVI Annual Return requirement was also enacted during March 2023 through the BVI Business Companies Financial Return Order which provides details on the form of the Annual Return, examples of the due and filing dates, and details on the filing exemptions.
We analyze this and many more details in relation to the BVI Annual Return Requirement in our article below.
What is the BVI Annual Return?
Further to the BVI Business Companies Act amendments 2022, from 1 January 2023 every BVI Company needs to submit an Annual Financial Return to its Registered Agent.
The Annual Return template consists of a simple Income Statement and Balance Sheet and will not need to be audited. In a nutshell the Income Statement provides information about a company’s revenues, expenses, gains, and losses over a specific period. The Balance Sheet shows a company’s assets, liabilities, and shareholders equity.
When you need to submit
The earliest date an annual return becomes can be submitted (as opposed to when it must be filed) from a company is 1 January 2024. This practically means that if the financial period of your Company is 1 January to 31 December 2023, then the return can be submitted to the Registered Agent of the Company starting from 1 January 2024 with the latest date for submission being 30 September 2024.
Companies with financial year other than the calendar year must file their BVI Annual Return no later than 9 months after their financial year end. For example a Company with financial year end in 31 March, its Annual Return can be submitted starting from 1st April 2024 and has until 31 December 2024 to submit its BVI Annual Return.
Where you need to submit
After the Return is completed it needs to be sent to the Registered Agent of the Company who has responsibility to collect and inform the BVI Registrar on the entities who did not comply with such submission.
Which BVI Companies are exempted from preparing an Annual Return?
The companies exempted from filing under section 98A(5) of the Act are the following:
- a listed company, meaning a company that is listed on a stock exchange;
- a company that is regulated under a financial services legislation and provides financial statements to the Commission in accordance with the requirements of that financial services legislation;
- a company that files its annual tax return to the BVI Inland Revenue Department accompanied by the company’s financial statements; and
- a company in liquidation, except that this exemption does not apply if the company’s annual return becomes due for submission prior to the commencement of the liquidation.
Companies in liquidation
For companies already in liquidation, annual returns are not required to be prepared for any financial periods in which the company is in liquidation. Returns must however be filed in respect of all financial years prior to the commencement of the liquidation.
Privacy of Filed Returns
As the annual returns are filed with the registered agent, the details of such remain confidential and within the custody of the agent, who must make the information available whenever requested pursuant to an obligation under an enactment. For example, the BVI Financial Service Commission may request the information in accordance with the powers granted to it under the Financial Services Commission Act, 2001; such would also be the case with regard to a request by the International Tax Authority under the Mutual Legal Assistance (Tax Matters) Act, 2003, the Financial Investigation Agency under the Financial Investigation Agency Act, 2003 and the Attorney General under the Criminal Justice (International Co-operation) Act, 1993.
Penalties
Based on the amendment the Registered Agent will have an obligation to inform the BVI Financial Services Commission, 1 month after the due date, on the Companies which did not fulfil this requirement. Failure by a company to file its annual return constitutes an offence and may result in fines and the Company not be deemed as in good standing or even result in the name of the Company been struck-off the Register by the Registrar.
Currencies which can be used for the completion of the Return
Any currency can be used in which a Company prepares its financial statements. The reference in USD$ shown in the Annual Return Template can be substituted.
Accounting Standards which can be used in preparing the Return
Currently the BVI Business Companies Act does not prescribe specific Accounting Standards for the preparation of the Annual Return. We (Asterisk BVI) do prepare our accounting records and annual returns in accordance with the International Financial Reporting Standards (IFRS), as they are widely known and used, and also accepted in the BVI.
Does the Annual Return need to be audited?
No, the BVI Business Companies Act 2022 Amendment and the Financial Return Order do not prescribe that the Annual Return needs to be audited.
How you can prepare
As the BVI Annual Return will need to be completed in relation to the 2023 Financial Records and Activities of your BVI Company, we highly recommend you start collecting such documentation as it incurs, as well as engage with a professional from now if you will require any assistance.
Copy of the Annual Return Template:
You can find a copy of the return on our BVIAccountants website in pdf format on our BVIAccountants here. You can also find the template in excel format on our Annual Return Website here.
How Asterisk can help
We at Asterisk specialize in the preparation of BVI Annual Returns, Accounting Records and Financial Statements. We have also created the websites BVIAccountants & annualreturn.vg where you can find a wealth of information on the Return and get assistance with the Accounting of your BVI entities. You can contact us on how we can better assist you in the completion and submission of the return.
Summary of important things to know:
- You will need to submit an Annual Return (income statement and balance sheet) to your BVI Registered Agent;
- There will be exemptions to this requirement but limited (see above);
- If your company’s financial year is the calendar year, then your first submission will need to be done until 30 September 2024;
- No audit is required, unless you wish for your own purposes;
- You can use the currency in which your company prepares its financial statements;
- There will be penalties for late submission;
Further clarifications
Please note that more clarifications on the exemptions and other information in relation to the BVI Annual Return may be released by the BVI Financial Services Commission during the year.
Disclaimer
Please note that the above article is for informational purposes only and does not constitute any form of advise. For more information you can contact us.
You can email us at contact@asterisk.cy or contact@bviaccountants.com for more information and clarifications.
