Enhanced Record Keeping Requirements for BVI Companies and LPs
Directors of British Virgin Islands (“BVI”) companies and general partners of BVI limited partnerships should be aware of enhanced record keeping requirements that have recently come into force. These requirements are not burdensome but all BVI companies and limited partnerships should review their record/document keeping, retention and destruction policies and practices in light of the new laws, to ensure continuing compliance.
Since 2005, BVI business companies have been required under the BVI Business Companies Act, 2004 (the “Act”) to keep records that are sufficient to show and explain the company’s transactions and that enable the financial position of the company to be determined with reasonable accuracy at any time. These statutory record keeping requirements on companies remain in force and have now been applied to limited partnerships by way of an amendment to the Partnership Act which came into force in November 2012. BVI companies and partnerships remain entitled to adopt accounting standards appropriate to them in the jurisdictions in which they operate, provided the minimum transparency standard above is met.
The records and underlying documentation that BVI companies and limited partnerships are required to keep must now be kept for a period of at least five years, following the enactment of the Mutual Legal Assistance (Tax Matters) Act, 2012 which also came into force in November 2012. The five year period starts on the date of completion of the transaction to which the records and underlying documentation relate, or the termination of the business relationship to which they relate.
The records and documentation of a company or a limited partnership are not required to be kept in BVI. However, the company or limited partnership must notify its registered agent of the physical location of its records and underlying documentation, and notify the registered agent within fourteen days of any change to that location.
It will be noted that these obligations mirror the existing obligations on companies that maintain their own registers of members and/or directors (or outsource this function outside the BVI), to notify their registered agent of the location of the register(s) and to provide updated copies within fifteen days of any changes.
If you have any queries, or would like our assistance in ensuring your policies are compliant and documented in accordance with the enhanced requirements, please contact your usual Maples contact.