Economic Substance in the British Virgin Islands
Economic Substance legislation in the British Virgin Islands requires certain entities incorporated or registered in the British Virgin Islands and which conduct one or more of a set list of relevant activities to comply with local substance requirements known as ‘economic substance’. The legislation closely follows the approach taken by the Crown Dependencies of the UK (Jersey, Guernsey and the Isle of Man) and the other UK Overseas Territories, including Bermuda and the Cayman Islands.
The following defined activities are considered relevant activities, and relevant entities must comply with the economic substance rules in the applicable jurisdiction. To help you to determine whether or not your entities are required to comply with economic substance requirements, our expert team of lawyers has developed an online classification solution, which users can access at their convenience for a flat fee.
The following specifically defined activities are considered relevant activities, and relevant entities must comply with the economic substance rules in the British Virgin Islands.
Classification, compliance and reporting obligations
We are known as a market leader and ‘go-to’ firm for British Virgin Islands economic substance advice.
For more complex structures that do not fall very simply into the “in” or “out of scope” boxes, our legal team have been at the forefront of the development of the legislation in the BVI and is ideally placed to perform a full review of your entities to determine and advise on all aspects of compliance with substance legislation and, where appropriate, what actions must be taken.
In addition to understanding their compliance obligations, entities should ensure that they are prepared to meet their reporting obligations – mainly if they carry on any of the nine defined “relevant activities”, for which the requirements can be complex. Every company and limited partnership registered in the British Virgin Islands must file an economic substance report with the International Tax Authority via its registered agent within six months of the end of each compliance period. Our team of specialists is also on hand to provide guidance and assist with preparing reports.
Please contact one of the key contacts below for help, or fill out our enquiry form here.
Establishing substance in the BVI
For clients that do need to establish and demonstrate substance in the British Virgin Islands, we are perfectly positioned to provide bespoke and integrated legal and administrative substance solutions. We offer a full suite of governance, resident director, and accounting services. We can also work with you to obtain trade licences, work permits, premises, specialist equipment, or dedicated human resources.
If you manage or own an entity that may be affected by substance rules based on the nature of its operations, please get in touch with one of the key contacts below.
International Tax Authority (ITA) investigations and enforcement notices
The ITA has broad investigation and enforcement powers as a regulator under economic substance legislation. Entities and their operators need to know their rights and obligations and the applicable deadlines. Our dedicated team can provide solutions-oriented advice and support when dealing with ITA investigations or enforcement actions.
If you or your entity have received a notice or enquiry from the ITA, don’t hesitate to contact one of the key contacts below for help or fill out our enquiry form here.