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2012.07.28 - BVI: Leader of the offshore market accepted BVI Business Companies (Amendment) Act 2012.


British Virgin Islands: The applicable company law of the British Virgin Islands being the BVI Business Companies Аct 2004 was enacted in 2004. Amendments and supplements thereto were accepted subsequently in 2005, 2006, 2007 and 2009. The current amendments being the BVI Business Companies (Amendment) Act 2012 were adopted by the House of Assembly on 29th June 2012 and officially published on 26th July 2012. There are also additional (subordinated) regulations contained within the BVI Business Companies Regulations 2012.

New amendments to the BVI corporate legislation include 80 updates, supplements and corrections of the current clauses of BVI Business Companies Аct 2004. These are, inter alia:

  1. Section 20 of the Act has been amended regarding the use of foreign characters in the company name. Now the company may be officially registered under a name (Foreign character name) with such characters as Cyrillic or Chinese hieroglyphs. In such cases, the company name in Latin letters shall remain in place, and shall be considered as the main one.
    This section confirms the importance of the BVI as a corporate jurisdiction internationally. It is aimed at making the BVI more popular in the Asian, Middle Eastern, Eastern European and other jurisdictions where the Latin alphabet is not the main one.
    In turn, BVI Business Companies Regulations 2012 determine the use of such special symbols such as ‘!’, ‘?’, ‘+’, ‘%’ in the company name.
  2. Section 24 of the Act has been updated regarding cases where the name previously used in the BVI may be reused. For example, it was not stated earlier that a name may be reused where the relevant company is re-domiciled from the BVI to another jurisdiction but such a situation is now considered. This section is important because the number of companies in the BVI is growing rapidly, and it frequently happens that the preferred name has already been taken.
  3. In case of voluntary liquidation of a BVI company, previously a director could not act as a liquidator. This section has now been updated so that neither an active director, nor any person that has held the position of a director or another officer of the company at any time over the previous two years may act as a liquidator.
  4. Many owners choose not to liquidate BVI companies officially due to the relatively high costs and leave them to be struck off by the Register. A company, after being struck-off, may be restored upon payment of charges due to the Register. The restoration procedure may be initiated by either the owner or other persons such as creditors. After being struck-off, a company shall be considered dissolved after ten years. Under the current amendments, the timeframe between being struck-off and dissolved has been reduced from 10 to 7 years (i.e. Section 216 of BVI Business Companies Аct 2004).

The BVI Business Company (Amendment) Act 2012 takes full effect on 15th October 2012.

International Overseas Services comments:

The applicable BVI corporate legislation being the Business Companies Аct 2004, together with its amendments and supplements, is one of the most detailed and well thought-out pieces of legislation amongst all classical offshore jurisdictions.

The well thought out and precise approach of the British Virgin Islands authorities to their corporate legislation is one of the reasons why the BVI remains the undisputed leader of the offshore sector in terms of the number of companies incorporated there, despite the rather aggressive marketing policies of competitive countries.

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