Maples Group | Annual Financial Returns FAQ

Annual Financial Returns

Frequently Asked Questions

QAm I required to file an annual return?

Following 1 January 2023 changes to the BVI Business Companies Act (As Revised) ("BC Act"), all BVI companies have to file an annual return in respect of each year, unless they are exempt. The first return is required for the 2023 financial year.

The following companies are exempt from having to file an annual return:

(a) A listed company, i.e. a company any securities of which are approved for listing on a recognised exchange 1. This includes companies with listed debt securities;

(b) A company regulated under BVI financial services legislation that provides financial statements to the BVI Financial Services Commission ("Commission") in accordance with the requirements of that financial services legislation. This includes regulated mutual funds (professional, private, public, approved and incubator funds), private investment funds and approved managers;

(c) A company that files annual tax returns (together with its financial statements) with the BVI Inland Revenue;

(d) A company in liquidation, except where the company's annual return becomes due before the commencement of the liquidation, in which case the company's liquidation is not complete until the company files the annual return. A company in liquidation is exempt where the liquidation commenced before the "due date" of the annual return (see below for details).

The annual return requirement currently applies only to BVI companies, not BVI limited partnerships.

1 "Recognised exchange" means a recognised exchange as defined in the Regulatory Code (As Revised) i.e. an exchange that is a member of the World Federation of Exchanges or recognised by the BVI Financial Services Commission under the Regulatory Code (Recognised Exchanges) Notice (As Revised). These are as follows: Regulatory Code (Recognised Exchanges) Notice: American Stock Exchange, Australian Stock Exchange, Bourse de Montreal Inc, Cayman Islands Stock Exchange, Channel Islands Stock Exchange, Chicago Board of Trade, Chicago Stock Exchange, Coffee, Sugar and Cocoa Exchange, Inc, EUREX, ICE Futures Europe, ICE Futures U.S. Inc., ICAP Securities & Derivative Exchange Limited, International Capital Market Association, Kansas City Board of Trade, LIFFE Administration and Management, London Stock Exchange Plc, MidAmerica Commodity Exchange, Minneapolis Grain Exchange, New York Cotton Exchange, New York Futures Exchange, New York Mercantile Exchange Inc., New York Stock Exchange, New Zealand Stock Exchange, Osaka Securities Exchange, Pacific Exchange, Philadelphia Stock Exchange, South African Futures Exchange, The London Metal Exchange Limited, Tokyo International Financial Futures Exchange, Tokyo Stock Exchange, Toronto Stock Exchange. World Federation of Exchanges list of Members: Abu Dhabi Securities Exchange, Amman Stock Exchange, Athens Stock Exchange (ATHEX), Australian Securities Exchange, Bahrain Bourse, BATS Global Markets, Bermuda Stock Exchange, BM&FBOVESPA S.A., BME Spanish Exchanges, Bolsa de Comercio de Buenos Aires, Bolsa de Comercio de Santiago, Bolsa de Valores de Colombia, Bolsa de Valores de Lima, Bolsa Mexicana de Valores, Borsa İstanbul, Bourse de Casablanca, BSE India Limited, Bursa Malaysia, CBOE Holdings, Inc., China Financial Futures Exchange, CME Group, Colombo Stock Exchange, Cyprus Stock Exchange, Dalian Commodity Exchange, Deutsche Börse AG, The Depository Trust & Clearing Corporation, Dubai Financial Market, The Egyptian Stock Exchange, EuroCCP, Euronext, Hochiminh Stock Exchange, Hong Kong Exchanges and Clearing, Indonesia Stock Exchange, Intercontinental Exchange, Inc., Irish Stock Exchange, Japan Exchange Group, Inc., Johannesburg Stock Exchange, Kazakhstan Stock Exchange, Korea Exchange, Luxembourg Stock Exchange, Malta Stock Exchange, Moscow Exchange, Muscat Securities Market, Nasdaq, National Stock Exchange of India Limited, Nigerian Stock Exchange, NZX Limited, The Options Clearing Corporation, Oslo Børs, Palestine Exchange, Philippine Stock Exchange, Qatar Stock Exchange, Saudi Stock Exchange (Tadawul), Shanghai Futures Exchange, Shanghai Stock Exchange, Shenzhen Stock Exchange, Singapore Exchange, SIX Swiss Exchange, Stock Exchange of Mauritius, The Stock Exchange of Thailand, Taipei Exchange, Taiwan Futures Exchange, Taiwan Stock Exchange, Tel-Aviv Stock Exchange, TMX Group Inc. and Zhengzhou Commodity Exchange.

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Will the information in the annual return be made public and who will have access to it?

Annual returns will be kept at the offices of the company's registered agent in BVI but will not be filed with the BVI Registrar of Corporate Affairs ("Registrar") or be publicly available.

The company's registered agent will have access to the annual returns they receive. A copy of an annual return can be requested from the registered agent by the Commission or any other competent authority in the BVI. "Competent authority" includes the BVI Attorney General, Governor of the BVI, Financial Investigation Agency, International Tax Authority and any other authority designated by the Governor.

How long is information in the annual return retained?

The registered agent must keep annual returns filed with them while they act as registered agent for the company and for at least five years from the date they cease to act.

To which period does the information relate?

The information in annual returns relates to each year. The reference to 'year' means a calendar year or, if a company’s fiscal or financial year is not a calendar year, the company’s fiscal or financial year.

Can I change the annual return period?

Yes, a company can change its fiscal or financial year in accordance with its memorandum and articles of association, which will then change the company's 'year' for its annual return.

How long after my financial year end do I have to file the annual return?

The annual return must be filed with the registered agent within nine months after the end of the year to which the annual return relates.

The BVI Business Companies (Financial Return) Order (As Revised) (the "Order") confirms that the 'due date' for the annual return relates to the financial year end or fiscal year end, as determined by the company.

For companies with a calendar year as their financial year, the annual return for the 2023 calendar year will become due from 1 January 2024, i.e. the day after the end of the calendar year to which the annual return relates. The filing deadline will then be within nine months of the due date, i.e. by 30 September 2024.

For companies with a non-calendar financial year, the annual return will become due in 2024, the exact date depending on the month when the company's financial year starts. The annual return will become due from the day after the date that the financial year ends. The filing deadline will then be nine months after the end of the financial year to which the annual return relates.

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When is my annual return due if my financial year started during 2023?

For companies with a calendar year as their financial year, the annual return for the 2023 calendar year will become due from 1 January 2024, i.e. the day after the end of the calendar year. The company then has until 30 September 2024 to file its annual return that became due from 1 January 2024.

For companies with a non-calendar financial year, the annual return will become due in 2024, the exact date depending on the month when the company's financial year starts. The annual return will become due from the day after the date that the financial year ends. The filing deadline will then be within nine months of the end of the financial year to which the annual return relates.

The Order gives some guidance and examples of when the annual return is due and must be filed. If a company has a financial year from March to February, the first annual return will become due from 1 March 2024 and the annual return will have to be filed with the registered agent by 30 November 2024. If a company has a financial year from May to April, its first annual return will become due from 1 May 2024 and the company will have until 31 January 2025 to file the annual return with its registered agent.

Will my financial year automatically commence on the date of incorporation of my new company in the same way as an economic substance financial period?

No, the company's 'year' for its annual return will be either the calendar year or the company’s financial year, if that is different to the calendar year. The 'year' will not automatically start on the date of incorporation of the company.

Can I align my economic substance financial period and annual return financial year?

Yes, provided the necessary company approvals are obtained (e.g. under the memorandum and articles of association if changing the company's financial year for the annual return) and the process for changing the economic substance financial period is followed if that is being changed. We would be pleased to help with preparing these approvals.

I have already submitted similar information under economic substance, do I really need to provide this again?

Yes, the obligation to file the annual return information is separate from economic substance reporting obligations.

Will I have to file an annual return every year?

Yes, unless the company is exempt or becomes exempt in the future.

What are the consequences of failing to file an annual return?

If a company does not file its annual return on time, the registered agent must notify the Registrar through VIRRGIN within 30 days of the filing date.

Failure by a registered agent to notify the Registrar is an offence and the registered agent may be fined US$3,000.

Failure by the company to file the annual return on time is an offence and may result in prosecution or a fine against the company of:

• US$300 for the first month or part month

• US$200 for each month or part month after the first month

• up to a maximum aggregate penalty of US$5,000.

Where a company is liable to the maximum penalty and the company has failed to file its annual return, the Registrar may also strike the defaulting company off the register of companies in the BVI. A certificate of good standing will not be available from the Registrar for a defaulting company.

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If a company files its annual return late, can it get back into good standing with the Registrar?

We understand from the Commission that the updated VIRRGIN system will allow the registered agent to notify the Registrar once a late filing of an annual return has been received. If there are no other outstanding fees / filings with the Registrar, this should then bring the company back into good standing with the Registrar.

The accounts of my company are consolidated within group accounts, can I file the consolidated accounts?

Where a company is part of a group of companies that prepares and maintains consolidated accounts, the company can file the group consolidated accounts if they show the accounts of the company.

The Commission has confirmed that a company may choose whether to file using consolidated data or individual data. Any consolidated accounts must show the accounts of the individual BVI company however and include the prescribed form of annual return from the Order.

In practice, in our view consolidated accounts are rarely likely to show the accounts of an individual company in the prescribed format in the Order and so group consolidated accounts are unlikely to be able to be filed by a company with its registered agent to satisfy the BVI company's annual return obligations.

Where there is more than one BVI company in a group, a single filing showing the annual returns attributable to each BVI company can also be made.

The accounts of my company are audited, can I file the audited accounts?

No, the annual return must be in the form and contain the information specified in the schedule to the Order. The Order includes a template for the annual return, which is a simple balance sheet / statement of financial position and an income statement. The Commission has confirmed that the format is set out in the Order to allow for clear, consistent, uniform data to be collected on each company.

The Commission has also confirmed that receipt by the registered agent of a company's audited financial statements will not satisfy the requirement to file the annual return.

Are there are any audit, currency or accounting standard requirements for preparing the annual return?

There is no requirement for the annual return to be audited or to use a particular accounting standard. The return can be presented in US dollars or any other currency in which the company prepares its financial statements.

The information required under the annual return does not directly match the information as prepared in my accounts, what do I do?

The Commission has confirmed that a company may only deviate from the format in the schedule of the Order where the deviation is not material. 'Not material' is understood to generally mean different terminologies for assets / liabilities etc. that may be used under different (accounting) standards.

Do I still have to file an annual return if the company is in liquidation?

A company in liquidation is exempt from the obligation to file an annual return, except where the company's annual return becomes due before the commencement of the liquidation. In that case, the company's liquidation is not complete until the company files the annual return. A company in liquidation is therefore exempt where the liquidation commenced before the due date of the annual return.

For example, for a company which has the calendar year as its financial year, its annual return becomes due on 1 January of the following year. If the company decides to go into liquidation in June of that following year before it has filed its annual return for the previous year with its registered agent, the company will still be bound to file its annual return for the previous year because its liquidation started after that annual return became due.

If a company has the calendar year as its financial year and in June of a year it goes into liquidation, it will not be required to file an annual return for that calendar year, i.e. the year it decides to go into liquidation.

The same rule applies for non-calendar financial years. For example, if a company's financial year starts on 1 April in a year (the "First Year") and ends in March of the following year (the "Second Year"), the company's annual return for the First Year becomes due on 1 April of the Second Year, and the company has until 31 December of the Second Year to file its annual return. If the company goes into liquidation in May of the Second Year, it is liable to file its annual return for the First Year as that annual return would have become due on 1 April of the Second Year. If the company goes into liquidation in November of the First Year however, it is not liable to file an annual return for that First Year.

Is the Maples Group assisting clients with preparing their annual returns?

Yes, we can provide services necessary for preparing an annual return, please see details here Where companies do not have the Maples Group as registered agent, we can also assist with preparing the information required for the annual return to be filed with the company's registered agent.