This is a guest article by our associated specialized accounting firm Asterisk BVI operating annualreturn.vg. Annualreturn.vg is a specialized BVI website solely focused around the BVI Annual Return requirement and how to assist BVI Companies to comply with this new requirement fast and without overpaying.
BVI Annual Returns are here to stay. Firstly introduced via an order from the BVI Financial Services Commission (FSC) on the 1st of January 2023 requiring all BVI Companies (limited exceptions apply) to prepare and submit an Annual Financial Return with a deadline up to 9 months after the end of the financial year of the BVI Company.
The BVI Annual Return template as released by the authorities consists basically of a simple income statement and balance sheet. Nothing to stress you about, but basic accounting knowledge is required to correctly complete it. The Annual Return does not need to be audited and it can be prepared under any recognised reporting currency your company uses for its operations (not crypto), and in any of the recognised accounting principles (IFRS, UK GAAP, US GAAP etc).
In addition, penalties will apply for late or no submission. Firstly the Company will be deemed as non-compliant therefore you will not be able to obtain a certificate of good standing, as well as penalties will apply.
To continue with, a hot topic of discussion and one we receive many questions for is whether dormant companies are exempted? The answer is No, and this is because even if dormant the FSC still requires the submission of the Return.
Exempted are only listed companies in recognised stock exchanges worldwide, companies which entered liquidation prior to the end of their financial year end, regulated companies which submit financial statements to the FSC (i.e. Approved Manager entities that are not exempted), as well as companies which file their annual tax return to the BVI Inland Revenue Department accompanied by the company’s financial statements.
Another hot question is whether nil submissions are accepted. The answer in most instances is no (depends on the Registered Agent though), because most companies have share capital and at least Registered Agent and Annual Government fees expenses per year. These will need to be disclosed on the Annual Return.
In terms of Financial Year Ends and deadlines the most commonly used is 31 December in which case the deadline for submission is 30 September 2024. This is the most frequently used financial year end and the most recommended. If however for example the financial year end of your BVI Company is 30 June, then the first financial year runs from 1 July 2023 to 30 June 2024 and the Company has 9 months thereafter to make the submission. Its better to inform the BVI Registered Agent of the Company for any different financial year ends.
Finally, for your ease of reference you can see a copy of the return below. This is the official template as released by the BVI Authorities, only with Asterisk branding:
Summary of important things to know by Asterisk BVI:
- 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;
- You can use the currency in which your company prepares its financial statements;
- There will be penalties for late submission.
