Growth and Opportunities for BVI in Asia

Beneficial Ownership

On 2 January 2025, amendments to the BVI Business Companies Act (as revised) (BC Act) and the BVI Business Companies Regulations (as revised) came into force, along with the new BVI Business Companies and Limited Partnership (Beneficial Ownership) Regulations (beneficial ownership regulations), collectively referred to as the amendments.

The amendments bring the BVI’s beneficial ownership regime within the BC Act and under the supervision of the BVI Registrar of Corporate Affairs, in line with international standards and requirements that beneficial ownership information be held by a public authority.

BVI companies are required to collect, keep and maintain adequate, accurate and up-to-date information on the company’s beneficial owners. Unless an exemption applies, this information must be filed with the registrar. Filings must be made within 30 days of the date of incorporation or continuation of the company into the BVI, and updated within 30 days of the company becoming aware of any changes to the information.

In addition to changes in beneficial ownership, the BVI has recently introduced an annual returns process. The return must contain the information set out in the BVI Business Companies (Financial Return) Order, as revised. The order includes a template for the annual return, which consists of a simple balance sheet or statement of financial position, and an income statement. There is no requirement for the annual return to be audited or to follow a particular accounting standard. The return can be presented in US dollars or any other currency used by the company in its financial statements.

Where a company is part of a group of companies that prepares and maintains consolidated accounts, it can file the group’s consolidated accounts, provided they include the company’s accounts.

Where there is more than one BVI company in a group, a single filing showing the annual returns for each BVI company can also be made. The annual return will be kept at the registered agent’s office and will not be filed with the registrar or made publicly available. A copy can, however, be requested by the BVI Financial Services Commission or any other competent authority in the BVI.

BVI Company Popularity

The BVI BC remains one of the most popular vehicles for cross-border and international business, with more than 7,000 new companies incorporated in the last quarter of 2024. A BVI company offers a range of benefits including flexibility, ease of incorporation and a neutral tax regime. These advantages continue to make a BVI company a preferred choice for businesses and investors seeking to do business in the region.

One of the key factors behind the BVI BC’s continued popularity is its adaptability. The BVI has a well-established legal framework that supports the incorporation of various types of companies, including limited liability companies, segregated portfolio companies, and restricted purpose companies. This flexibility enables businesses to choose the structure that best meets their needs, whether for trading, investment or holding activities.

BVI Fund Opportunities

The BVI has long been a premier jurisdiction for the establishment and management of investment funds. Its regulatory framework is well regarded for being both flexible and efficient, making it an attractive option for fund managers and investors alike.

The BVI offers a range of fund structures that cater to different types of investors. Regulated structures include professional, private and public funds, which accommodate the open-ended side of the market, and the private investment fund for closed-ended, illiquid investment activity. The jurisdiction has become increasingly popular for co-investment funds and single asset “club deals”, as these can often be established and launched rapidly without the need for additional regulation.

The approved manager regime continues to generate interest across Asia and remains available to qualifying BVI managers that act as:

1. Investment managers or investment advisers to private or professional funds recognised under the BVI’s Securities and Investment Business Act (SIBA), feeder funds into such funds and affiliates of those funds, as well as funds from recognised jurisdictions that have equivalent characteristics to BVI private or professional funds, provided the assets under management in such open-ended structures are USD400 million or less;
2. Investment managers or investment advisers to closed-ended funds incorporated, formed or organised under the laws of the BVI or any recognised jurisdiction, and that have the characteristics of a private or professional fund, together with their feeders and affiliates, provided the assets under management, i.e. aggregate capital commitments, in such closed-ended structures are USD1 billion or less; and/or
3. Investment managers or investment advisers to such other person as the Financial Services Commission (FSC) may approve on a case-by-case basis on application. This can include managed accounts.

The application process is straightforward and approved managers are subject to fewer continuing obligations than managers holding a full licence under the SIBA. Notably, where a person is approved as an investment manager or investment adviser under the approved managers regime:

1. The BVI Regulatory Code (as revised) does not apply;
2. There is no requirement for the appointment of an auditor or a compliance officer; and
3. There is no requirement to maintain a compliance procedures manual under the Financial Services Commission Act (as revised) (FSC Act).

Despite these lighter-touch provisions, an approved manager remains subject to the BVI’s anti-money laundering (AML) regime, automatic exchange of information regime and supervision by the FSC.

Virtual Assets Hub

The rise of cryptocurrency and blockchain technology has created new opportunities for jurisdictions willing to embrace innovation and adapt to the changing landscape. Virtual asset businesses, which are typically nimble and jurisdiction-agnostic, have found the BVI a good fit for their business objectives.

A particular niche has emerged in the territory at the intersection of virtual assets and traditional financial services, where the jurisdiction has historically been strong. This has led to innovative products such as tokenised funds being launched from the BVI in recent months.

The BVI has taken a proactive approach to regulating virtual asset businesses. To help market participants understand the jurisdiction’s virtual assets regulatory framework and to facilitate successful registration applications under the BVI’s Virtual Assets Service Providers Act, the FSC has issued guidance on the regulation of digital assets. This guidance covers a range of issues, including the licensing of digital asset businesses, consumer protection measures, and AML and counter-terrorist financing requirements.

Conclusion

The BVI is well-positioned to continue expanding its role in the Asian market. The jurisdiction’s ongoing efforts to enhance transparency and compliance, alongside refining and innovating its product offerings, ensure that the BVI remains a leading destination for international business.

The BVI’s reputation for regulatory excellence and its flexible and efficient fund structures will also continue to drive growth in its fund industry. Finally, the BVI’s proactive approach to regulating virtual assets will solidify its position as a hub for innovation.

The Maples Group is a market leader in providing legal, fiduciary, fund, entity formation and management, and regulatory and compliance services to investment funds, structured finance vehicles and corporate entities across the Americas, Asia, Europe and the Middle East.

Through a comprehensive range of company secretarial and board support services, the group works closely with clients to reduce administrative burdens, allowing them to focus on their core business objectives.

The group’s full complement of services allows firms to have access to a broad array of offerings under one roof.

For more details, please contact your usual Maples Group contact or one of the contacts listed in this update.