Saturday, March 11, 2006

Changes in BVI IBC Act in 2004

2004 year came with new amendment to the BVI BC Act. It became quite clear that it won't be possible to implement the new law completely till the 31st of December, 2004, and then new, more realistic terms were stated. The companies were granted 7 years to comply with the bearer shares regime introduced by the IBC (Amendment) Acts 2003 and 2004, which came into force on the 1st of January 2005. The previous deadline stated at the 31st of December 2004 was changed into the 31st of December 2010. This decision was effected by the recommendations given by the private sector panel that a transition period should be provided before the new regime is completely effective.

Also the licence fees was changed from US$ 300 to US$ 350 and from US$ 1,000 to US$ 1,100.

The practical effects of these changes was different for the existing IBCs incorporated before the 1st of january 2005, and new IBCs.

  • For existing IBCs, bearer shares already issued have to be placed with a licenced custodian, or exchanged for registered shares by the 31st of December 2010. Bearer shares that are issued on or after the 1st of January 2005 have to be placed with a licenced custodian immediately upon issuance.
  • The existing IBCs having the power to issue bearer shares but not using it, will need to amend their Memorandum and Articles of Association by the 31st of December 2010, by including a prohibition against the issuance of bearer shares. By this they will avoid the payment of a higher licence fee.
  • As regards fees, then from 2005 till 2008 the current licence fee of US$350 will continue to apply to all IBCs with an authorised share capital of uS$50,000 or less. Then, an increase in the annual licence fee will be applied until the 31st of December 2010, to the IBCs which continue to permit the issuance of bearer shares under their M&A. Starting from the year 2011, an annual licence fee of US$1,100 will be applied to all IBCs which continue to permit the issuance of bearer shares in the M&A
  • The existing IBCs will establish and maintain the Register of Directors within 12 months from the 1st of January 2005. The Register of Directors should contain details of directors actual on the 1st of January 2005 and all the changes in this information thereafter. The history before the 1st of January 2005 is not needed.
  • The newly formed IBCs having the power to issue bearer shares will pay higher annual licence fee. Also, they are required to keep the bearer shares with an approved custodian upon issuance.
  • Current annual licence fee of US$350 will remain for the new IBCs with an authorised share capital of US$50,000 or less and without the power to issue bearer shares.
  • The Register of Directors should be kept at the BVI registered offices of all IBCs. The Register of Directors should not be filed at the Registrar of Companies, and information about the directors will continue to remain confidential to the third parties.
So shortly that’s the story about changes in BVI IBC Act.

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