| On the 20th anniversary of the International
Business Companies Act, the BVI Financial Services Commission has
prepared a new statute, to be called the BVI Business Companies Act,
when enacted on 1 January 2005. The Business Companies Act will
effectively consolidate the provisions of the International Business
Companies Act and the domestic Companies Act, under a single, zero
tax, corporate statute.
Improvements to the Legislation
While the International Business Companies Act has been very
successful with over 600,000 companies incorporated since its
enactment in 1984, it has been evident for some time now that
improvements to the legislation are necessary in order to meet
current international business demands and practices. The Business
Companies Act will provide for the incorporation of five types of
companies, including companies limited by guarantee and hybrid
companies. Investment funds may be established as segregated
portfolio companies (which until now has only been permitted within
captive insurance) and restricted purpose companies may also be
established.
Transition period
To facilitate the introduction of the Business Companies Act, the
Financial Services Commission has proposed a two year transition
period. Existing companies may elect to continue under the
International Business Companies Act until 1 January 2007, or may,
at any time, re-register under the Business Companies Act. During
2005 only, clients may elect to incorporate new companies under
either the Business Companies Act or the International Business
Companies Act. From 1 January 2006 new incorporations will only be
permitted under the Business Companies Act. On 1 January 2007 the
re-registration of existing international business companies under
the Business Companies Act will be automatic (no filings or
amendments to the Memorandum and Articles of Association will be
required), so that all BVI companies will then be registered under
the Business Companies Act.
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