On June 30, 2017, the British Virgin Islands (BVI) beneficial ownership legislation was implemented. It gives effect to agreements established with the United Kingdom (UK) to simplify the sharing of beneficial ownership information and establishes a secure, private search platform named BOSS (Beneficial Ownership Secure Search System).
WHAT IS THE LEGISLATION?
All BVI businesses and legal entities now have easier access to and storage of beneficial ownership data thanks to the Act’s adoption of the Beneficial Ownership Secure Search system.
In reality, it’s a system centrally controlled by the BVI authority that gives access to the required data of pertinent legal organizations kept by registered agents (RA).
The law’s initial goal was to improve the effectiveness of information transfers, including notes between the nation and foreign authorities. A number of changes have been made to the Act to better match it with the requirements for disclosure set out by economic substance legislation.
BOSS ACT AMENDMENTS
The first amendment– made operative on July 1, 2021, included the following:
- As a qualified reporting entity, limited partnerships without legal personality
- It is made clear that the “investment fund industry” is not a meaningful activity requiring economic substance
A limited partnership must be “directed and managed” in the British Virgin Islands and conduct its “main income-generating activities” there if it meets two requirements: (a) to be a resident entity in the BVI and (b) to be involved in an activity that is pertinent.
There will be a 6-month transition time for limited partnerships formed before July 1, 2021, permitting them to be in compliance by January 1, 2022. On the contrary, limited partnerships created on or after July 1st must immediately abide by the new amendment.
The ES “financial periods” (FPs) starting on or after January 1, 2022, are covered by the second amendment made in 2021.
Legal entities are any limited partnership with a legal personality in the BVI as well as any registered BVI company under the BVI Companies Act, 2004, according to the Beneficial Owner Secure Search System Act, 2017.
A beneficial owner is somebody who gains from ownership and “ultimately owns or controls” the legal entity. These individuals must additionally meet requirements in the following circumstances:
- A natural person who owns, manages, or is under the direction of a corporation or other legal organisation, directly or indirectly, and satisfies one or more of the following requirements:
- Possesses a combined 25% or more of the company’s stocks or membership interests
- Controls 25% or more of the voting rights for the corporation together
- A natural person who manages the legal person’s operations in any other way (in the case of a legal person)
- If there is a legal agreement:
- The partner(s) in charge of the partnership
- The trustee or another party in charge of the contractual agreement
- The creator of the agreement or another party by whom it is formed
- If a corporation or other legal organisation is placed under the BVI Insolvency Act, 2003’s provisions for liquidation, administration, or administrative receivership due to insolvency, the natural person designated to fill such roles
- The creditor who appoints the receiver if they own 25% or more of the shares or voting rights of a corporation or other legal organisation
- The natural person serves as the personal representative of the estate of a deceased shareholder who would otherwise be a beneficial owner of the corporate and legal organisation.
Registered Legal Entity
The BOSS Act of 2017 defines a registrable legal entity as an organization that:
- Is the business and juridical entities, beneficial owner
- A firm that is exempt
- Is a business listing its shares on a reputable stock market
- Is either a sovereign state or a fully owned subsidiary of a sovereign state
- Is an authorized user or a foreign-regulated person as defined by the BVI Anti-Money Laundering Regulations of 2008
BVI LEGAL ENTITIES DUTY
The deadlines listed below must be followed for information on registrable legal entities and beneficial owners:
- Within 15 days of discovering any beneficial owners or registrable legal entities, identify them and inform your RA.
- Keep your RA informed of any changes to the information within 15 days of becoming aware of the changes in order to keep it current.
Within six months of your financial year’s end, you must inform your RA of any information regarding pertinent activity.
BVI EXEMPT PERSONS
Exempt persons include the following categories of entities, as indicated in Section 7 of the BOSS Act of 2017:
- Under the Securities and Investment Business Act of 2010, a business or legal organization recognized, registered, or otherwise accepted as a mutual fund, including an authorized fund, an incubation fund, a public fund, a professional fund, and a private fund
- a corporation or other legal organization whose shares are traded on a reputable stock market
- The business that is a subsidiary of another business and fits under one of the two exceptions listed above
- The Regulatory Code of 2009 designates the organisation as a BVI licensee
BVI LEGAL OBLIGATIONS OF A COMPANY
Each BVI business company should take reasonable measures to identify its beneficial owners and registrable legal entities and shall ensure that the CSP has the proper information unless an exemption exists. A change in beneficial ownership must be reported to the registered agent by the BVI business firm within 15 days of becoming aware of it.
Please get in contact with Relin Consultants if you need assistance determining your registrable people or creating any notices to the businesses you oversee.
Keynotes of BVI BOSS System
- It is the responsibility of the registered agent to file information on the beneficial owners of the CLE and to update that data in the RA database linked to the BOSS system.
- The database’s contents are kept private and safe and are not made available to the public.
- The Beneficial Ownership Secure Search System will only be accessible to the people who have been chosen. Before being permitted access to the BOSS system, a chosen individual must pass a security screening exam and take part in the confidentiality promise.
It should be emphasized that any violation of this law’s requirements by authorized people might result in a fine of up to $75,000 USD, up to two years in jail, or both.
Relin Consultants is a professional firm providing BVI Company Incorporation Services and can act as your registered agent. Please contact us if you have any inquiries or need more guidance on the BVI beneficial ownership legislation.
How is the data for my Entity stored?
Information pertaining to entities is kept on a protected, encrypted system and is covered by the BOSS Act procedural measures.
All Entities’ information kept on a RA database must be preserved for five years after the Entity dissolves or otherwise stops being a “corporate and legal entity.”
Who is allowed to use the RA database?
The RA database’s beneficial ownership data is not accessible to the general public and may only be accessed in response to a valid request from one of the four BVI responsible authorities:
- Financial Services Commission
- International Tax Authority
- Financial Investigation Agency
- Attorney General’s Office
What data will be kept about the beneficial owners?
Registered agents will need to keep the following data on file for each beneficial owner to whom the Act applies:
- Home address
- Country of origin
When a search is done, would the beneficial owners be notified?
Whenever a search is conducted using BOSS, the beneficial owners are not notified. This is so that the legislation may help the UK fight against global organised crime, which is one of its purposes. If there were suspicions of illegal behaviour, notifying a beneficial owner that a search has been ordered may effectively tip off a beneficial owner.