Financial Annual Return for BVI companies: A complete guide

Maintaining detailed records and documents has been a standing obligation for BVI companies, ensuring transactions are traceable and the financial status is accurately reflected at any given moment.

However, under the BVI Business Companies Act amendments 2022, BVI companies are now mandated to annually submit specified financial details to their registered agent via a Financial Annual Return (except in a few cases).

For this reason, our guide helps you navigate BVI's new financial reporting requirements, ensuring your business adheres to local laws and thrives in a competitive economic environment. 

1. Financial annual return: All you need to know first

1.1. What is a BVI financial annual return?

BVI financial annual return, also known as a financial return or annual return, consists of a simple income statement (profit and loss statement) and a balance sheet.

It provides corporate directors and shareholders a lucid understanding of the BVI-registered company’s financial health and helps ensure your business meets BVI legal demands.

Highlights of the return's format include:

• This financial information is to remain confidential, and not intended for public access;
• Preparing the financial annual return for BVI companies does not require any specific accounting standards. You can use the International Financial Reporting Standards (IFRS);
• The Annual Financial Return does not need to be audited;
• You need to submit the annual return to your Registered Agent;
• The form of the return is straightforward. You can see a copy of the Return here. 

1.2. What information do BVI companies need to prepare for the annual return filing?

To comply with BVI regulations when submitting annual returns, businesses registering a BVI company must gather and prepare the following financial information:

Balance Sheet components

1. Assets: A list of everything the company owns, which provides value (e.g., cash, equipment, property).
2. Liabilities: All debts or obligations the company is responsible for (e.g., loans, payables).
3. Shareholder equity: The residual interest in assets after deducting liabilities, also known as 'net assets'.

Income Statement components

1. Revenue: The total income generated from the sale of goods or services, before any costs or expenses are deducted.
2. Cost of sales: The direct costs attributable to the production of the goods sold by the company.
3. Gross profit: The profit a company makes after deducting the costs associated with making and selling its products or the costs associated with providing its services.
4. Other costs: This includes operating costs, such as payroll and rent, and corporate income tax, among other expenses.
5. Total expenses: The sum of all costs and expenses associated with the company’s operations.
6. Net income (Profit): Often referred to as the 'bottom line,' this is the total revenue minus the total expenses.

Your company needs to compile these financial details with care to ensure accuracy and adherence to the stipulated BVI reporting standards.

1.3. Why do BVI companies need to prepare a financial annual return?

The Global Forum on Transparency and Exchange of Information for Tax Purposes of OECD requires that jurisdictions safeguard the integrity of accounting records across all entities and arrangements. 

To conform to these international standards,  the British Virgin Islands has made drastic changes to the BVI Business Companies Act, thus the need for a financial return. The BVI Financial Services Commission implements this measure to ensure timely access to crucial financial information for international cooperation.

2. When do BVI companies need to file the BVI annual return?

In line with revisions to the BVI Business Companies Act, BVI businesses need to present the annual financial return to their Registered Agent no later than nine months following their financial year-end.

For example, if a company’s financial year-end is March 31, 2024,

•  It is eligible to start filing the annual return from April 1, 2024.
• The final date for filing for such a company would be 9 months after the end of their fiscal year, which, in this example, means they have until December 31, 2024, to file their BVI annual return.

3. Which type of BVI companies can be exempt from the financial annual return order?

Under section 98A(5) of the BVI Business Companies Act, certain companies are exempt from the obligation to file an annual return, which includes:

Companies within these classifications need to understand their exemption status to ensure compliance with BVI regulatory requirements. 

BVI companies should consult with their Registered Agent or professional consultant to confirm whether they qualify for an exemption, and to understand any obligations that may still apply to them despite the exemption from filing an annual return.

4. How can we help you prepare for the BVI financial annual return?

Global Link Asia Consulting, as your trusted one-stop corporate service provider helping hundreds of business owners start their businesses overseas and manage their companies with success, can help you

• Collect data and accounting documents and store them securely via QuickBooks; 
• Prepare financial annual return following the International Financial Report Standard;
• Review collaboratively with company directors for accuracy, prompt submission to avert penalties, and audit support when required.

In addition, we can help you:

• Register an offshore company in BVI;
• Open a corporate bank account for BVI company with a 99% success rate;
• Choose the right company types for tax optimization;
• Apply for BVI business licenses;
• Get an affordable, professional registered office address for business;
• Support to open, authenticate, and manage Stripe Paypal Business in Singapore, Hong Kong, and the U.S;
• Handle all your tax accounting needs, timely annual filings, auditing, and more.

5. FAQs about BVI’s financial annual return

We offer a comprehensive range of accounting and tax services for offshore companies. Our services include:

• Monthly/Annual Tax Accounting services for offshore companies.
• QuickBooks Consulting and Licensing.
• Annual Return Preparation.
• Economic Substance Reports Preparation.

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