British Virgin Islands – Economic Substance

KEY POINTS

Economic substance requirements are imposed on all BVI companies and LPs unless they can prove they are tax resident elsewhere.

Companies and LPs must submit information about their tax residence status and relevant activity on an annual basis.

New companies and LPs must comply immediately with effect from 1 January 2019.

The British Virgin Islands (“BVI”) has enacted legislation that imposes economic substance requirements on all BVI companies and Limited Partnerships (“LPs”) carrying on ‘relevant activities’ unless they are resident for tax purposes in a jurisdiction outside the BVI. Non tax resident companies will be expected to provide  evidence of their non-tax resident status.

•Banking Business                                              •Shipping business
•Insurance business                                           •Holding business
•Fund management business                           •Intellectual property business
•Finance and leasing business                         •Distribution and service centre business
•Headquarters business

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NEW COMPANIES AND LIMITED PARTNERSHIPS

‍New companies and LPs (incorporated or formed from 1 January 2019) must comply with economic substance requirements immediately and meet the reporting obligations within one year of date of incorporation or formation.

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EXISITING COMPANIES AND LIMITED PARTNERSHIPS

‍Existing companies and LPs must comply with economic substance requirements by 30 June 2019 and meet the reporting obligations within one year of that date.

OBLIGATIONS

‍All companies and LPs must provide information to enable the BVI International Tax Authority (“Competent Authority”) to monitor whether the relevant company and LP is carrying on relevant activities, and if so, whether it is complying with the economic substance requirements. The information will be integrated in to the existing BVI BOSS System which obliges Registered Agents (“RAs”) in the BVI to keep up to date information on beneficial ownership and allows Competent Authority to search the database.

ECONOMIC SUBSTANCE TEST

‍(a) the relevant activity is directed and managed in the Virgin Islands;

(b) Having regard to the nature and scale of the relevant activity:

i. there are adequate numbers of suitably qualified employees who are physically present in the BVI (whether or not employed by the relevant legal entity or by another entity and whether on temporary or long-term contracts);

ii. there is adequate expenditure incurred in the BVI;

iii. there are appropriate physical offices or premises in the BVI appropriate for the core income-generating activities; and

(c) where the relevant activity is intellectual property business and requires the use of specific equipment, the equipment is located in the BVI.

Outsourcing of core income generating activities is permitted in certain circumstances. Holding companies are required to meet a reduced test for economic substance, while intellectual properties companies may face more onerous requirements.

Pure equity holding entities which carry on no relevant activity other than holding equity participations in other entities and earning dividends and capital gains will be considered as having adequate substance if it:-

(a) complies with its statutory obligations under the BVI Business Companies Act, 2004 or the Limited Partnership Act, 2017 (whichever is relevant);

(b) has adequate employees and premises for holding equitable interests or shares and, where it manages those equitable interests or shares, has adequate employees and premises for carrying out that management.

PENALTIES

‍Significant penalties are imposed both for failure to provide required information, and for operating a company or LP in breach of the economic substance requirement which may include fines, imprisonment and/or strike off.

It was recently proposed that the effective date of the legislation be pushed back to 30 June 2019, however the amendment to that effect has not yet been gazetted.
Further guidance from the BVI Government is expected to be published shortly and Portcullis will update you accordingly. Please contact your Portcullis Relationship Manager or one of our representatives for assistance or further information should you have any questions or difficulty in meeting these regulatory requirements.

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英屬維京群島–2018 年經濟實質法案(公司與有限合夥企業)

關鍵要點:

對於所有英屬維京群島公司與有限合夥企業加諸經濟實質要求，除非能證明在其他國家具稅務居民身份

公司與有限合夥企業必須每年提交有關稅務居民現況和周年相關活動

新公司與有限合夥企業必須自2019年1月1日立即遵守

現有公司自2019年6月30日起遵守

英屬維京群島（下稱「維京群島」）已制定法律，對於經營「相關業務」的所有維京群島公司及有限合夥企業加諸經濟實質規定，但維京群島境外地區的稅務居民者除外。非稅務居民公司必須提出其非稅務居民身分的證據。

相關業務

相關業務意指下列任一項業務：

• 銀行業務                                                    • 航運業務
• 保險業務                                                    • 控股公司業務
• 基金管理業務                                            • 智慧財產業務
• 融資與租賃業務                                        • 經銷與服務中心業務
• 總部業務

新設的公司與有限合夥企業

新設的公司與有限合夥企業（2019年1月1日起設立或成立者）必須立即遵守經濟實質規定，並在其設立日或組成日起一年內遵守申報義務。

既有的公司與有限合夥企業

既有公司與有限合夥企業必須在2019年6月30日前遵守經濟實質規定，並在該日起一年內遵守申報義務。

義務

所有公司與有限合夥企業必須提供資料，使維京群島國際稅賦管理局（下稱「稅賦機關」）得以監控相關公司或有限合夥企業是否經營相關業務，且若確有經營，亦監控其是否遵守經濟實質規定。本項資料將整合載入既有的BVI BOSS系統中，這將使維京群島的註冊代理人有義務隨時更新最終受益人資料，並使稅賦機關得以搜尋資料庫。

經濟實質檢查

非屬維京群島境外稅務居民的維京群島公司及有限合夥企業（除僅以實體參與其他實體賺取股利及資本利得而未經營相關業務的純實體控股公司外），就有關任何相關業務，必須在維京群島經營法定的產生核心收益的業務，並藉由參照下列標準證明經濟實質：-

(a) 相關業務的主導及管理在維京群島進行；
(b) 根據相關業務的性質及規模而言：

i. 聘僱實際在維京群島上班且須具備合適資格的足夠人數的員工（無論是由
相關法人或其他實體所聘僱，亦無論是臨時或長期聘僱）；
ii. 在維京群島產生足額的費用；
iii. 在維京群島擁有適合經營產生核心收益業務的合適實體辦公室或營業場所。

(c) 相關業務為智慧財產業務且必須使用特定設備者，該設備設於維京群島。

在若干情形下，產生核心收益的業務委外經營是可以的。控股公司必須通過較為寬鬆的經濟實質檢查，智慧財產公司則可能面對較為嚴苛的規定。純實體控股公司若僅持有實體參與其他實體的股份賺取股利及資本利得而未經營相關業務者，則在下列情形下，該純實體控股公司即被視為已具有充分的經
濟實質：-

(a) 遵守其依維京群島2004年商業公司法或2017年有限合夥企業法（以適用者為準）的法定義務；

(b) 擁有足以持有股權利益或股份的足夠員工及營業場所，若其自行管理上述股權利益或股份，亦擁有足以執行該管理工作的足夠員工及營業場所。

懲處

若未提供必要資料，或在經營公司或有限合夥企業時違反經濟實質規定，兩種情形皆會遭受重大懲處，懲處可能包括罰款、監禁及/或除名。近來有提議將立法的生效日期延遲至2019年6月30日，然而修正案生效日尚未在憲報上刊登。英屬維京群島政府的進一步遵循說明預計即將發布，屆時本公司將提供您更新資料。倘您在符合上述法律規定上有任何疑問或困難，請洽詢您的保得利關係經理或本公司業務代表，以便提供您協助或進一步資訊。