Annual Return - Library
Our comprehensive Library Knowledge Base provides you with detailed information and answers a lot of questions on the new regulation requiring Annual Financial Returns for BVI Business Companies. Our BVI Annual Return Library is aimed to help you understand the requirements and prepare your business for compliance with the new regulation. Our team of experts is also always available to answer any questions you may have and assist you in preparation of accounting records and annual returns so that you can stay ahead of the curve.
Annual Return Questions & Answers
Our Knowledge Base Library offers a comprehensive range of information on the Annual Financial Return obligations in the BVI that are essential for you to be aware of.
Further to the BVI Business Companies Act amendments 2022, from 1 January 2023 every BVI Company needs to submit an Annual Financial Return to its Registered Agent.
The Annual Return template consists of a simple Income Statement and Balance Sheet and will not need to be audited. You can see the actual template in our section above.
By virtue of section 98A(7) of the Act, the reference to “year” relates to a company’s fiscal or financial year which may be a calendar year. If a company’s fiscal or financial year does not correspond to a calendar year, the reference to “year” relates to the company’s stated fiscal or financial year. Thus, the requirement to file an annual return relates to the company’s fiscal or financial year, however that is determined and applied by the company.
The earliest date an annual return becomes due (as opposed to when it must be filed) from a company is 1st January 2024, considering that section 98A of the Act and this Order came into effect on 1st January, 2023.
Therefore if a Company has a Financial Year End 31 December then its Annual Return becomes due for submission on 1 January the following year. It then has 9 months (i.e. until 30 September) to submit its Annual Return to its Registered Agent. As an example, a Company with Financial Year end 31 December 2023 has until 30 September 2024 to submit its Annual Return to its Registered Agent.
If a company has a fiscal or financial year that does not correspond to a calendar year, its annual return becomes due in 2024, depending on the month in which the commencement of its financial year falls. However, it may have until any period in 2025 to file its first annual return. For example, Company A’s fiscal or financial year is from March to February. For the purposes of complying with its annual return filing under the Act, Company A’s first annual return becomes due on 1st March 2024, but it has until 30th November 2024 to file the annual return.
If, on the other hand, Company A’s fiscal or financial year is from May to April, its first annual return becomes due on 1st May 2024, but the Company has until 31st January 2025 to file the annual return.
The annual return is to be filed with the company’s registered agent nine months after the end of the year to which the annual return relates. The registered agent will then have an obligation to inform the BVI Financial Services Commission, 1 month after the due date, on the Companies which did not fulfil this requirement.
Failure by a company to file its annual return constitutes an offence and may result in fines and the Company not be deemed as in good standing or even result in the name of the Company been struck-off the Register by the Registrar.
The companies exempted from filing under section 98A(5) of the Act are the following:
- a listed company, meaning a company that is listed on a stock exchange;
- a company that is regulated under a financial services legislation and provides financial statements to the Commission in accordance with the requirements of that financial services legislation;
- a company that files its annual tax return to the Inland Revenue Department accompanied by the company’s financial statements; and
- a company in liquidation, except that this exemption does not apply if the company’s annual return becomes due prior to the commencement of the liquidation.
For companies already in liquidation, annual returns are not required to be prepared for any financial periods in which the company is in liquidation. Returns must however be filed in respect of all financial years prior to the commencement of the liquidation.
As the annual returns are filed with the registered agent, the details of such remain confidential and within the custody of the agent, who must make the information available whenever requested pursuant to an obligation under an enactment. For example, the BVI Financial Service Commission may request the information in accordance with the powers granted to it under the Financial Services Commission Act, 2001; such would also be the case with regard to a request by the International Tax Authority under the Mutual Legal Assistance (Tax Matters) Act, 2003, the Financial Investigation Agency under the Financial Investigation Agency Act, 2003 and the Attorney General under the Criminal Justice (International Co-operation) Act, 1993.
Where a company fails to file its annual return within the nine (9) months allotted, such company will have failed the test of good standing in accordance with section 235 of the Act. The company will also become subject to penalty fees as outlined in Schedule I, Part II of the Act, and risk subsequent striking off the register and dissolution in accordance with section 213 of the Act.
In determining the due date, one should refer to the specific company’s fiscal or financial year-end.
Where a company’s year-end was not previously determined or would be impacted by a desired change to the year-end, such a decision should be recorded by the usual board resolution.
The reference in the Schedule to the denomination “US$” (the USA currency) may be substituted by any other currency in which a company prepares its financial statements.
There is no specific reporting standard prescribed in completing the return.
We at Asterisk BVI prepare our accounting records and annual returns in accordance with the International Financial Reporting Standards (IFRS), as they are widely known and used, and also accepted in the BVI.
No, the BVI Business Companies Act does not prescribe that the Annual Return needs to be audited.
The Annual Return Requirement is governed by Section 98A of the BVI Business Companies Act, 2022 amendments. You can find the full text on the BVI Financial Services Commission here. Please note that this version may have had subsequent revisions, therefore we suggest to check the BVI Financial Services Commission for further updates.
Please see here the official Financial Return Order as released by the BVI Financial Services Commission during March 2023 which includes the Annual Return template on pages 4 and 5.
Where a company fails to file its return on time, the Registered Agent of the said Co has obligation 30 days after the annual return was due to notify the Registrar in writing of that fact by stating:
(a) the name of the company;
(b) the year to which the annual return relates; and
(c) the last time the company filed its annual return.
The BVI Business Companies Act par. 98 states that all BVI Companies need to keep Financial Records and underlying documentation, which can be kept at any place around the world, but the Record-Keeping Address and Record Keeper need to be known by the Registered Agent of the Company. The documents need to be kept for a period of 5 years from the date of the transaction they relate to.
Financial Records can be any document which ‘explains’ the Financial Transactions of the Company. Such records may be but are not limited to Invoices, Bank Statements, Agreements, and any other document of accounting significance.
This requirement is in addition to the Annual Return submission requirement, therefore please bear in mind to keep proper Financial Records for your BVI Company at all times.
A profit and loss (P&L) statement under International Financial Reporting Standards (IFRS) is a financial statement that provides information about a company’s revenues, expenses, gains, and losses over a specific period. It is also known as an income statement or statement of operations. The P&L statement is used to measure a company’s financial performance and to determine its net income or loss for the reporting period. It shows how much revenue a company generated and how much it spent to generate that revenue, providing investors and analysts with important insights into the company’s profitability.
A balance sheet under International Financial Reporting Standards (IFRS) is a financial statement that provides a snapshot of a company’s financial position at a specific point in time. It shows a company’s assets, liabilities, and equity, and provides investors and analysts with important insights into a company’s financial health. The balance sheet follows the fundamental accounting equation, which states that assets must always equal the sum of liabilities and equity. The balance sheet is an essential financial statement for decision-making and is used by investors, creditors, and other stakeholders to evaluate a company’s ability to meet its financial obligations and to assess its long-term financial health.
We have more blog articles and information on our other website – BVIAccountants.com , if you require more reading. We recommend two specific ones:
- BVI Annual Return – Everything You Need To Know
- 6 Reasons Why The BVI Annual Return Requirement Shouldn’t Stress You Out
BVIAccountants is our affiliate website also operated by our specialized Accounting Firm, Asterisk (BVI). If you require more information contact us.