In November 2012 the BVI enacted new record-keeping requirements for BVI Business Companies and Partnerships to comply with OECD recommendations. These new requirements are in addition to existing record-keeping obligations contained in the BVI Business Companies Act, 2004 (“BCA”) and effects ALL companiesalready registered under the BCA, as well as new companies.
BVI companies are now required to maintain and keep records and underlying documentation for a period of at least 5 years from the date of completion of the transaction or the termination of the business relationship to which they relate. This statutory obligation comes in addition to the existing requirements under the BVI Business Companies Act, 2004 which provides that BVI companies must keep records that are sufficient to show and explain their transactions and to determine their financial position with reasonable accuracy at any time. The new legislation does not impose any obligation to produce or file periodical financial statements; however the companies’ records should provide sufficient transparency regarding their activities and financial situation at any particular point in time.
Examples of documentation which should be maintained are:
• In the case of portfolio investment companies the account statements, including any records of withdrawals or distributions.
• In the case of trading companies documentation such as invoices, ledgers, contracts, etc. that reflect details of the cash flows and the matters in respect to which they took place; all sales, purchases and other transactions as well as details of the assets and liabilities of the companies.
Such records and underlying documentation may be kept at the office of the registered agent or at any place chosen by the directors. Any change to the location at which the records are to be kept must be notified to the registered agent within 14 days of the change.
We recommend that Beneficial Owner of a BVI should choose Cyprus as a place to hold the companies documentation and bookkeeping. The reasoning is to avoid any future disputes from his country as taxpayer to challenge the management and control of his/her BVI.
Please contact S.C. Audit Ltd for further assistance.
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