The BVI Government passed new legislation requiring Registered Agents to record information on the beneficial with to the B.V.I. Government on a secure search system. The Beneficial Ownership Secure Search System Act, 2017 (the “Act”), created the Beneficial Ownership Secure Search System (“BOSS system”). This law supplements the existing law that orders Registered Agents to collect and maintain beneficial ownership information. The information that will be available through BOSS will be name, residential address, date of birth, and nationality of each beneficial owner of a BVI company.
The Act, entered into force June 30th, 2017 to provide the legal framework for recording accurate beneficial ownership information and the disclosure of that information to law enforcement authorities in countries with which the BVI has signed bilateral agreements.
Currently, the B.V.I. can only accept requests for beneficial ownership information from the United Kingdom. The information accessible through BOSS will be the name, residential address, date of birth and nationality of each beneficial owner of a BVI company.
What is BOSS?
The BOSS system is a decentralized data depository wherein each Registered Agent keeps the information on a segregated, encrypted database accessible through a private key. BOSS claims that the data can be protected from cyber-attack while the information uploaded to the BOSS system and while it is at rest in the Registered Agent’s database. The infrastructure of the system has been set up in a secure, stable G7 jurisdiction trusted by and independent of the BVI and the UK. The information on BOSS can be exchanged with the United Kingdom within 24 hours.
The BOSS system allows a search to be conducted across all of the separate Registered Agent beneficial ownership information databases. The searches cannot be traced and are invisible to Registered Agents.
Currently, searches will only be conducted upon receipt of a legitimate search request from the UK Financial Intelligence Unit of the National Crime Agency in compliance with the Exchange of Notes.
The Act applies to all BVI business companies, except those companies that were struck off the Register of Companies before 1 January 2016 and which have not been subsequently restored.
Prescribed Beneficial Owner Information
The information to be collected on the beneficial owner of a company is: (i) name; (ii) residential address (iii) date of birth and (iv) nationality. (In cases where the beneficial owner is a company – see ‘Definition of a Beneficial Owner’ below – the prescribed information is: (i) name/alternative names; (ii) incorporation number or equivalent; (iii) date of incorporation; (iv) status (e.g. active/dissolved); and (v) registered address.)
Each company must identify and inform its Registered Agent of its beneficial owners within 15 days. Any changes to the beneficial ownership information must be communicated to the registered agent within 15 days of the change.
Registered Agent Obligations
Registered Agents must create a database which is accessible to the BOSS system and upload to it beneficial ownership information for each of the companies under their administration by 30 June 2017. Registered Agents must also upload any changes to the beneficial ownership information communicated to them by a company within 15 days of receiving such notification. The information kept on the Registered Agent’s database will be kept confidential and will be accessible only by the Registered Agent or a specially designated person from a BVI law enforcement agency.
Who is a Beneficial Owner?
The beneficial owner of a company (other than a company with securities listed on a stock exchange) is the natural person who owns or controls 25% or more of the shares or voting rights in a company or who exercises control over its management.
In instances where a legal arrangement such as a partnership or trust is the beneficial owner, the beneficial owner is the natural person who controls the partnership or the trust (e.g. the general/managing partner of a partnership or the trustee of a trust) or the natural person by whom the legal arrangement was made (e.g. the settlor of a trust).
Where a company is in insolvent liquidation, the beneficial owner is the natural person who has been appointed as liquidator and where the beneficial owner is deceased and was a shareholder in the company, the personal representative or executor of that shareholder’s estate is considered the beneficial owner for the purposes of the Act.
Who is an Exempt Persons?
(i) a company which is recognized, registered or approved as a mutual fund under the BVI Securities and Investment Business Act, 2010
(ii) a company whose shares are listed on a recognized stock exchange
(iii) a person licensed under BVI financial services legislation
(iv) the subsidiary of a mutual fund or a listed company; or
(v) a company exempted by regulations.
While the company does not have to provide the four pieces of prescribed beneficial owner information for exempt persons, it has to collect and provide the following prescribed particulars for the exempt person: (i) name/alternative names; (ii) incorporation number or equivalent; (iii) date of incorporation; (iv) status (e.g. active/dissolved); and (v) registered address. The company also needs to provide the reasons why the exempt person is designated as such.
What is a Registrable Legal Entity?
A registrable legal entity is a legal entity which would be considered a beneficial owner but for the fact that it is a corporate entity and to which one or more of the following factors apply: (i) it is an exempt person; (ii) it is a legal entity whose securities are listed on a recognized stock exchange; (iii) it is a licensee or a foreign regulated person; (iv) it is a sovereign state or a wholly owned subsidiary of a sovereign state.
For example, where the beneficial owner of a BVI company is a corporate entity which is owned by the government of a country or if the corporate beneficial owner is regulated in a foreign jurisdiction, the corporate beneficial owner can be recorded and the Registered Agent does not need to identify the natural person who owns 25% or more of the shares in the corporate beneficial owner.
The Registered Agent will need to record the same prescribed particulars for the corporate beneficial owner as it does for an exempt person, i.e. (i) name/alternative names; (ii) incorporation number or equivalent; (iii) date of incorporation; (iv) status (e.g. active/dissolved); and (v) registered address. The basis for the corporate beneficial owner’s designation as a registrable legal entity will also need to be recorded.
When does the Act enter into force?
The Act enters into force on 30 June 2017. By that time, Registered Agents in the BVI must have collected and uploaded the prescribed beneficial owner information onto their respective secure databases.