Navigating the new BVI Financial Annual Return requirements - FAQs

Starting from 1 January 2023, all BVI Business Companies have a new task on their to-do list - preparing and submitting a Financial Annual Return (FAR) to their Registered Agent. This comes into play nine months after the end of each company's financial year-end (FYE).

In light of this new requirement, we've put together answers for the most common questions we've been asked in the past year. If you cannot find the response to your query or require assistance with accounting services, please email us at BVIFAR@harneysfiduciary.com.

What is the BVI FAR?

Subject to limited exceptions, from 1 January 2023 BVI Business companies are required to provide certain financial information to their Registered Agent on an annual basis in the form of a FAR.

This is a simple Income Statement and Balance Sheet. You can see the template here.

Which companies are exempted from submitting a FAR?

The following entities are exempt from FAR filing requirements:

• Entities listed on a recognised stock exchange
• Entities regulated by the BVI Financial Services Commission (FSC) which are already required to submit accounts
• Entities which file annual tax returns and financial statements with the BVI Inland Revenue
• Entities which are already in liquidation when their annual return is due, ie if the company makes its liquidation submission to the BVI Registrar prior to the end of its financial year

Are dormant companies and pure equity holding companies exempted?

No, they are not. All BVI business companies will need to submit their FAR unless they fall into one of the exemption categories mentioned above.

Are BVI-approved managers entities exempt?

In most instances, yes. BVI-approved managers, which are regulated by the BVI FSC and submit Financial Statements to the FSC, are not required to file a FAR.

How to determine the FYE of a BVI company?

The FYE is determined by the directors, and an entity can have any date as its FYE in accordance with its operations/group requirements. The FYE should be recorded in a board resolution, and the Registered Agent of the company (i.e. Harneys Fiduciary) needs to be informed.

My company already prepared management accounts. Can I submit those?

No. BVI Companies need to submit the FAR template, as released by the authorities. Financial Statements or Management Accounts in other formats will not be accepted.

When are FARs due?

FARs are due 9 months after the financial year end to which they relate. The first FYE due for submission was 31 December 2023. The BVI Financial Services Commission announced a 9 month extension for the first FAR period, but it is important to understand that this only applies to the first financial year starting on or after 1 January 2023 – there are no automatic extensions for second financial period. Going forward the usual 9 month deadline will apply for periods ended 31 December 2024 and later.

My company’s FYE is 30 June 2024. When do I need to submit the FAR?

If a company’s financial year does not follow to a calendar year, the FAR will cover the period from the start of that financial year. For example, a company with a FYE 30 June will have its financial period under review from 1 July to 30 June. This company will have until 31 March of the following year (9 months after its FYE) to file its FAR with its Registered Agent.

Where and how I can submit my FAR?

Clients who prepare their FAR either internally or through external accountants are required to submit it to their Registered Agent. If Harneys Fiduciary acts as the Registered Agent, submissions must be made via our Portal.

How can Harneys Fiduciary help me to complete the FAR?

Our specialist Accounting Services department consists of qualified, experienced professionals who are well aware of the new requirements and are ready to assist. We can help you with the preparation of your entity’s accounting records, financial statements, and completion of the FAR. A list of our service package options can be found here.

For more information, please contact our Accounting Services Team directly at ClientAccounting@harneysfiduciary.com

What additional documents should I submit with the FAR?

There is no need to provide additional documents (i.e., Financial Statements, invoices, etc) along with the FAR. The FAR will need to be submitted as shown in the template and variations such as Financial Statements or other financial documents will not be accepted.

Does the FAR needed to be signed by an authorised person (i.e. director)?

No, as the requirement stands, the FAR is not required to be signed.

Should the information in the FAR be based on the consolidated or stand-alone Financial Statement?

The FAR needs to be completed on the standalone numbers for the BVI company and not consolidated figures.

Do audited Financial Statements need to be submitted?

The submission needs to be done on the FAR template released by the BVI FSC as explained above. Audits are not required as part of the FAR requirement.

Is the FYE and Economic Substance reporting date the same?

No. The Economic Substance reporting deadlines vary based on when the company was incorporated or if the company has elected to have a specific period for its reporting period, i.e. the calendar year.

The requirement for the FAR is to submit within nine months after the FYE.

If you wish to align both reporting periods and Harneys Fiduciary is your Registered Agent, please contact your usual Harneys Fiduciary administrator and we can help arrange this.

Are Companies in liquidation exempted?

Exempted are companies which are already in liquidation when their FAR is due. This means that the company doesn’t have to submit FAR if it submits its liquidation documents to the BVI Registrar prior to the end of its financial year.

Are there prescribed accounting policies or principles that need to be followed?

There are no prescribed accounting policies or principles under which the FAR needs to be prepared. Any reputable accounting standards can be used for the preparation of the FAR.

Are submitted FARs open to the public?

When you file the FARs with the Registered Agent, the information remains confidential and under the control of the agent. They are responsible for sharing the information with valid requests from the BVI Competent Authorities.

Which currency can be used for preparing the FAR?

Any major currency may be used for preparing the FAR.

Do FARs need to be audited?

The FAR does not require audited financial statements. Submission must follow the FAR template.

If my entity held a regulatory license which has been recently cancelled do I still have to file a FAR?

If the entity has not filed financial statements with the Regulator for a financial year and the FAR is due for that financial year, then it has to submit the FAR to its Registered Agent.

My entity is dormant. Can I make an all-zeros submission?

BVI Companies usually have share capital, and operating expenses such as annual government and Registered Agent fees, which need to be reflected on the return, therefore an all-zeros submission is not expected or recommended.

What are the consequences of not complying with the FAR requirement?

Notification Requirement:

If a company does not file its FAR on time, the Registered Agent must notify the Registrar within 30 days of the due date. Once such a notification is made, the entity will no longer be considered in good standing at the Registry.

Penalties for Late Filing:

• A company that fails to file the FAR with registered agent within the specified period may incur Administrative Penalties of up to USD 50,000
• The Registrar may also strike the defaulting company off the register

Restoring Good Standing:

Once the overdue FAR is received by the Registered Agent, they must submit an additional filing to confirm receipt and restore the entity to good standing.

An administrative fee will be payable to cover this filing.

Questions? Please contact us at BVIFAR@harneysfiduciary.com. If you need assistance with Accounting & BVI Financial Annual Return submission you can choose one of our FAR packages here and we will revert accordingly to you.