New Business Companies Act.
A new piece of legislation was enacted on December 21st, 2004 by the legislative Council of the British Virgin Islands, which became effective as of January 1st, 2005 and replaces the Companies Act for resident companies, and the International Business Act (IBC Act) for non resident or offshore companies which will remain in force for a two year transition period in order to provide for a smooth and clear familiarization for the international community with the new Act.
This initiative has introduced a new universal zero tax regime for BVI companies, resolving the ring fencing issues raised by OECD countries, and is in line with the EU Savings Tax Directive and EU Code of Conduct on Business Taxation. The BVI’s have seen an opportunity to modernize its International Business Companies Act (IBC Act), enacted 20 years since its inception.
Transition period.
The new Act has introduced a two-year transition period where existing companies (incorporated prior to January 1, 2005) will be able to continue to be regulated under their original laws of incorporation (IBC Act or Companies Act).
Between January 1st and December 31st 2005 it was possible to incorporate a company under the IBC Act, the Companies Act or the new BVIBC Act.
As of January 1st, 2006 all new companies will have to be incorporated under the new BVIBC Act. On January 1st, 2007 however, every company, regardless of the statute under which it was formed, will be automatically converted to a BVI Business Company under the BVIBC Act.
Resident agent.
As a matter of local company law the company must maintain a registered office address within the BVI’s and must also appoint a BVI resident as registered agent.
In order to comply with modern due diligence requirements in the BVI’s, a due diligence declaration will have to be completed and signed by the ultimate beneficial owner(’s) of an IBC, and the documents mentioned therein will have to be collected and ultimately be available at the IBC’s business address.
Director(s).
A minimum of one director is required and corporate directors are permitted. Details of the directors do not appear on the public file.