The Economic Substance (Companies and Limited Partnerships) Act (as revised) (the “Act”) came into force on 1 January 2019, introducing economic substance requirements in the British Virgin Islands (“BVI”) for certain BVI legal entities that are not tax resident in countries outside the BVI and carry on a “relevant activity” as further specified in the Act.
The ES Act is supplemented by related Rules on Economic Substance in the Virgin Islands (the “Rules”), last issued by the BVI International Tax Authority on 2 April 2024
A copy of the Rules can be found here.
All BVI entities must determine and report whether they are engaged in a relevant activity.
The Act applies to certain BVI companies, BVI limited partnerships, and foreign companies and foreign limited partnerships registered in the BVI (“legal entities”) carrying on “relevant activities”.
Every legal entity must make a filing through its BVI registered agent:
- Confirming whether or not it carries on any relevant activities; and
- If it does carry on relevant activities, providing certain prescribed information.
This filing must be made within 6 months of the end of each financial period.
Legal entities that fall within the scope of the Act must provide this information to their registered agent in the BVI. The registered agent will report this information to the BOSS (ES) database where it will be available to the BVI International Tax Authority.
3 Steps to ES Law Notification and Reporting
Follow the three steps below to determine if you are required to comply with the Act and the information required to complete the ES Notification and Reporting Form.
Step 1 – Review the ES Notification and Reporting decision tree and determine if you are a Legal Entity engaged in a Relevant Activity;
Step 2 – Identify the applicable ES Notification and Reporting Form and determine the information required to complete the form.
New Legal Entity or Legal Entity Transferring to Campbells:
- All newly formed Legal Entities and a legal entity transferring to Campbells from another registered agent should complete either Form Zero, Form One, Form Two(N), Form Three(N) or Form Four(N) at the time of formation or transfer in.
- Complete the ES Notification Form using Adobe Acrobat and provide any required attachments. Depending on the Internet browser you are using, you may need to save the form first and then complete the form using Adobe Acrobat. Submit these to regulationbvi@campbellslegal.com for processing.
ES Reporting – Legal Entity, Relevant Activity
Step 3 – If the legal entity is engaged in Relevant Activity you are required to complete an ES Reporting Form.
At the end of each financial period, a Legal Entity engaged in a Relevant Activity must provide the applicable ES Reporting Form and determine the information required to complete the form. Based on your Relevant Activity (and tax residence) complete form Two(R), Form Three(R) or Form Four(R) and provide applicable supporting documents.
Complete the ES Reporting Form using Adobe Acrobat and provide any required attachments. Depending on the Internet browser you are using, you may need to save the form first and then complete the form using Adobe Acrobat. Submit these to regulationbvi@campbellslegal.com for processing.
The ES classification of a legal entity must be confirmed annually. If the ES classification changes, Campbells must be notified within 30 days of the change.
Contact your Campbells attorney if you are engaged in Intellectual property business.