BRITISH VIRGIN ISLANDS: NEW RECORD KEEPING AND RETENTION REQUIREMENTS

On 12 November 2012 changes have been introduced to the record keeping and record retention obligations of all companies and limited partnerships in the British Virgin Islands with the enactment of the Mutual Legal Assistance (Tax Matters) (Amendment) Act 2012, and the Partnership (Amendment) Act 2012. The amending Acts were published in the Official Gazette on 26 November 2012. 

Requirement to maintain and keep records and underlying documentation for at least five years
Following these changes, all companies and limited partnerships registered in the BVI are now required to maintain ‘records and underlying documentation’ and to keep such records and underlying documentation for a minimum of five years.

These changes were introduced in response to recommendations contained in the Phase 1 Peer Review Report on the BVI produced by the Global Forum on Transparency and Exchange of Information for Tax Purposes, published in August 2011, in order to ensure that BVI companies and limited partnerships adhere to
global compliance standards.

Since 2005 BVI companies have been required to keep records
Since 2005, in accordance with section 98 of the BVI Business Companies Act 2004, BVI companies have been required to keep records that: (a) are sufficient to show and explain the company's transactions; and (b) will, at any time, enable the financial position of the company to be determined with reasonable accuracy.

Requirement also applied to limited partnerships
These statutory record keeping requirements on companies remain in force and have now also been applied to limited partnerships. 

Records and underlying documentation to be retained for a minimum period of five years
Furthermore, the records and underlying documentation should be retained for a minimum period of five years from the date of completion of the transaction to which the records and underlying documentation relate or from the date the company terminates the business relationship to which the records and underlying documentation relate. 

Unfortunately, there is little guidance at present regarding what comprises ‘records and underlying documentation’, although accounts of a company or limited partnership are expressly included.

At the offices of the registered agent or any other place as determined
Finally, BVI companies and limited partnerships are now required to keep such records and underlying documentation at the offices of their registered agent in the BVI, or at such other places (whether within or outside the BVI) as determined by the directors of the company or general partners of the limited partnership. The company or limited partnership must notify its registered agent of the physical location of the records and underlying documentation, and notify the registered agent within fourteen days of any change to that location.


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