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Substance requirements for BVI – have time to report before the end of December

Substance requirements for BVI – have time to report before the end of December

21 December 2020

Not only a holiday is approaching, but also a deadline for the owners of companies in the BVI as by December 31, 2020, for each company to fulfill the substance requirements information must be uploaded to the BOSSs (Beneficial Ownership Secure Search system). Failure to comply with this requirement is subject to high fines – up to 20,000 USD.

In this regard, it is necessary to check with the registration agent whether the data has been loaded into the system.

If the data has not been loaded, it is urgent to fulfill this obligation. To fulfill this requirement, the owners of companies in the BVI will need financial statements for 2019, prepared in accordance with IFRS.

Recall that the requirements for a sufficient level of presence (substance) were introduced in the BVI in December 2018. The requirements apply to companies engaged in one of the specific activities (asset management, insurance, financial activities, banking, holding activities, distribution and service provision, activities related to cargo transportation, headquarters, intellectual property management). In this case, the correct interpretation of the type of economic activity is extremely important. For example, the issuance of interest-bearing loans by a company may be considered a financial activity subject to substance requirements.

 According to these requirements, a BVI company must be managed from the BVI territory (that is, meetings of the company’s board and all documents must be kept in the BVI), the company must have an office and an “adequate” number of qualified employees located in the BVI territory, and its expenses must fit the scale of the business.

To confirm compliance, the company provides all the supporting information to its registered agent, who, in turn, uploads it to the BOSSs. The tax office checks the information provided and makes additional requests if necessary.

 Hurry up to meet all the requirements before the end of the year and avoid fines!

 Our partner ALTHAUS PRIVATE TAX is ready to present more information and help:

▪ Prepare documentation – in particular, financial statements in accordance with IFRS;

▪ Take over the coordination of entering all required information.

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