Changes to BVI Business Companies Act Mooted

In last week's Speech from the Throne https://bvi.gov.vg/media-centre/speech-throne-2022 (signalling the opening of a new session of the House of Assembly), Governor John Rankin set out some of the legislative priorities for the House of Assembly this year. Of particular note to those in our sector is the following:

The BVI Business Companies (Amendment) Act, 2022 will mainly address issues surrounding struck-off companies, abolition of bearer shares, and record-keeping measures. The reforms will also include amendments to require persons wishing to act as voluntary liquidators of BVI business companies to be either licensed insolvency practitioners or persons resident in the Virgin Islands and holding specific qualifications and skills. Amendments will also be effected to Schedule 1 of the Act by reviewing and, as necessary, enhancing the registry fees regime. The Order effecting such amendments will be laid before the Honourable House in accordance with the requirements of the Act.

The BVI was an early adopter of provisions to control and regulate bearer shares and it has not been permissible to issue bearer shares in BVI companies since January 2010. Additionally, any bearer shares that were not lodged with an authorised custodian by that date were automatically disabled.  However, under the current provisions it is still possible for bearer shares to be redeemed or converted to registered shares, and we could well see an increase in applications before the scheme is finally abolished.

The proposed change to voluntary liquidations will come as welcome news to the island's insolvency practitioners, as well as the territory generally from a financial and regulatory point of view. The change should bring an increased level of confidence that liquidations will be overseen by properly qualified insolvency practitioners.

These proposed changes will bring the BVI more in line with other major financial jurisdictions, which will enhance the BVI's reputation as a premier financial centre.