BRITISH VIRGIN ISLANDS INTRODUCES BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS

The Beneficial Ownership Secure Search System Act, 2017 (the “BOSS Act”) comes into force in the BVI on 30 June 2017.

The registered agent of an In-Scope Entity in the BVI must maintain a database containing details of beneficial owners of, and registrable legal entities, applicable to BVI companies for which it is registered agent. The database will NOT be public and the information will only be accessible by designated persons specified by BVI competent authorities, principally on proper and lawful requests made by the UK law enforcement agencies.

The Beneficial Ownership Secure Search system is built to ensure that the BVI can efficiently exchange that information in relation to the exchange of notes to assist law enforcement agencies combat tax evasion and money laundering.

Which entities are within scope (“In-Scope Entity”)
Companies incorporated or registered under the BVI Business Companies Act, 2004.

Exemptions
This does not apply directly to foreign companies, or foreign companies that are registered in the BVI as a 'foreign company' pursuant to Part XI of the BVI Business Companies Act, 2004.

It also does not apply to companies that were struck off the register of companies prior to 1 January 2016.

Broadly, companies which are exempted from maintaining the beneficial ownership information are:

Who are beneficial owners?
A ‘beneficial owner’ is defined as a natural person who ultimately owns or controls a legal entity and includes, though is not restricted to:

Where two or more persons hold any qualifying interest jointly, whether as joint tenants or tenants in common, then each joint owner shall be the beneficial owner.

A person shall not be treated as a beneficial owner only by reason of:

Registrable legal entity
A “registrable legal entity” in relation to a company is a legal entity which:

Obligations of an In-Scope Entity
The obligation to provide updated beneficial ownership information rests on the BVI Company. Company failing to comply with this requirement commits an offence and may be subject to a fine up to US$250,000 or to imprisonment for a term not exceeding 5 years, or both.

An entity shall identify any person who is a beneficial owner or registrable legal entity and notify the registered agent of that information within 15 days of identifying such person or entity. The penalties for non-compliance by an entity may reach a fine not exceeding US$250,000, imprisonment for a term not exceeding 5 years or both. In addition, providing false information can lead to a fine of up to US$75,000, up to 5 years’ imprisonment or both.

An entity must within 15 days of becoming aware of a change in any of the prescribed information relating to beneficial owners notify the registered agent of such changes and the dates that they took place. Penalties for a breach can reach US$10,000. In addition, proving false information can lead to a fine of up to US$75,000, up to 5 years’ imprisonment or both.

Information in the BOSS register

It will also contain date on which such individual or registrable legal entity became or ceased to be a beneficial owner of an In-Scope Entity. The information must be held for 5 years by the registered agent from dissolution of the entity or its continuation out of the BVI.



Date: 1 July 2017