Legal and current affairs in The Bahamas, British Anguilla, the British Virgin Islands, Panama, Samoa and Seychelles.
Seychelles
SEYCHELLES IBC ACT AMENDMENT TO SCHEDULE. November 07
Dear Clients:
We are pleased to announce that the Government of Seychelles modified the registration and annual licence fee system applicable to the International Business Companies Act (IBC’s), effective as of 12th October 2007, as follows:
USD$100.00 upon incorporation and registry of Articles of Continuation, regardless of the company’s authorised capital.
USD$100.00 for the annual licence fee, regardless of the company’s authorised capital.
US$50.00 to amend the Memorandum or Articles of Association or both (amendments include Change of Name, increase or decrease of capital).
These are positive modifications, which affect both the registration fee to incorporate or continue (redomicile) an IBC, as well as the annual licence fees to be paid to SIBA. Formerly, a company with an authorized capital of up to US$100,000.00 paid a licence fee of US$100.00, and any other greater amount of capital would pay a licence fee of US$1,000.00.
Therefore, the main advantage of this change is that an IBC may be incorporated or continued with any authorised share capital and always pay the minimum registration and annual licence fee of US$100.00.
Should you have any doubt or question, do contact us at
Kind regards,
Mossack Fonseca & Co.
British Virgin Islands
GOOD NEWS FROM THE BVI FINANCIAL SERVICES COMMISSION. July 07
Dear Clients:
On the 3rd of July 2007, we received a press release from the British Virgin Islands’ Financial Services Commission (FSC) relating to companies incorporated on or before 31st December 2004 that were seeking to delete from their Memorandum and Articles of Association (M&AA) all references to bearer shares, in order to avoid paying higher licence fees as of 1st January 2008.
The Financial Services Commission has made the following assessment:
a) Amendments of this sort (deletion of bearer share provisions) will cause inconveniences to hundreds of thousands of company directors and owners as they will have to issue resolutions authorising the amendments, and
b) this measure will cause the BVI Registry to receive an overload of requests to be processed.
Based on the above, the Executive Council of the Financial Services Commission has issued an Order to amend the BC ACT as follows:
1. As of the 31st December 2009, the M&AA of every former IBC will be automatically amended so as to prohibit the issue of bearer shares.
2. If a company would like to keep its provisions relating to the issue of bearer shares, it will need to inform the authorities accordingly on or before the 31st of December 2009.
3. The licence fee increase scheduled for 1st January 2008 for companies with M&AAs that allow the issuance of bearer shares will not take place.
In light of the above, as of this date, 4th July 2007, you will no longer be required to submit resolutions of directors or shareholders amending company M&AAs in order to delete references to bearer shares, as this will be done automatically by BVI authorities. However, our BVI Office will be contacting the clients who have already provided their resolutions, but which have not yet been filed in order to determine if they still want to proceed with the amendment.
We trust you will find this information to be useful. Please contact our Panama Office by email at or by fax at (507) 263-7327, or contact the office most convenient to you with any queries you may have regarding this matter.
To download press release from the British Virgin Islands’ Financial Services Commission (FSC), please click here.
Kind regards,
MOSSACK FONSECA & CO.
British Virgin Islands
BVI REGISTRY, CIRCULAR No.1 January 07
Dear Clients:
In connection with our recent message regarding the new VIRRGIN Internet-based Information System recently implemented at the BVI Registry, we have now received the attached Industry Circular No. 1 from the BVI Financial Services Commission which we feel is self explanatory.
As we expressed earlier, we are confident that the Registry’s new system, once fully operational, will streamline time consuming Registry processes in BVI.
We continue to regret that during the implementation phase you are experiencing a delay in receiving your documents. We confirm you that, from our part, we are working diligently with the Registry’s personnel to ensure that any inconvenience is brought to a minimum.
To download the complete Industry Circular, please click here.
Panama
MOSSFON BUILDING! December 06
Dear Clients,
We are very pleased to announce that the Arango-Orillac Building, where Mossack Fonseca & Co.’s headquarters are located, has been renamed Mossfon Building.
This is the result of the continuous growth of our different operations, to wit: Mossack Fonseca & Co., Mossfon Trust Corporation, Mossfon Managers and Mossfon Asset Management. We have thus acquired and now occupied most of the building.
We kindly request you to make sure to use thisnew denomination in all courier packages addressed to Mossack Fonseca & Co. Panama.
Panama
NEW MOSSFON PANAMA TELEPHONE NUMBER! September 06
Dear Clients,
As part of our constant efforts to provide you with the best possible service, the head office of Mossack Fonseca & Co.in Panama has migrated its central telephone system from an analog platform to a digital one. Due to this change, the main telephone number of this office will no longer be (507) 263-8899. As of this date, (507) 205-5888 is Mossfon Panama's new main number.
We take this opportunity to remind you that we offer round the clock attention at the Panama Office, and that you may contact us with any inquiry at the above stated number. We shall be delighted to assist you.
British Virgin Islands
NEW AMENDMENTS TO THE BUSINESS COMPANIES ACT ENACTED (“the BVI BC Act”) January 06
Dear Clients,
This is to confirm that the BVI Business Companies (Amendment) Act, 2005 (No.26 of 2005) (the “BVI BC Amendment Act”), which amends the BVI Business Companies Act (the “BVI BC Act”), came into force on 1st January 2006. Both, the BVI BC Act and the BVI BC Amendment Act can be downloaded here: http://www.mossfon.com/bvi.html or in a direct link to the PDF file here.
Following are certain provisions of the BVI Business Companies Act (“BVI BC Act”), as amended, which we feel certain will be of interest to you. This is supplementary to the provisions set out in our last announcement of December 2005.
A. BVI Business Companies (“BVI BCs”)
The new BVI BCs will be the only type of company that may be incorporated as of January 2006. (Confirmed)
The BVI BC Act merges The Companies Act (CAP 285) and the International Business Companies Act (the “IBC Act”) into a single, modern, sophisticated and innovative corporate statute. (Confirmed)
There is no requirement to specify the purposes of the BVI BC in the Memorandum and Articles of Association. (Confirmed)
There is no authorised capital or authorised share capital in the BVI BC. (Confirmed)
The first registered agent of a BVI BC will, within six months of the BVI BC’s date of incorporation, appoint one or more persons as the first directors of the BVI BC. (New)
The common seal will again be mandatory and an imprint of the seal shall be kept at the office of the BVI BC’s registered agent. A company incorporated under the BVI BC Act between 1st January and 31st December, 2005 has until 1st July 2006 to acquire its common seal. (New)
Where a company has only one member who is an individual and that member is also the sole director, such sole member/director may appoint a reserve director to act in his place in the event of his death. (New)
A BVI BC’s name may consist of its company number together with its name in foreign characters.
B. Transitional Provisions applicable to International Business Companies incorporated on or before 31st December 2004.
Any IBC that does not apply on or before 31st December 2006 to be re-registered will be automatically re-registered on 1st January 2007.
IBCs that are re-registered automatically on 1st January 2007 will be able to retain their authorized capital and will not have to amend their M&AA upon re-registration. (New)
Should you have any question or comments, please do not hesitate to contact us at We shall be most happy to assist you with your queries.
It is a pleasure to attach for your information a
comparative text of both the International Business
Companies (“IBC’s”) and the new BVI Business Companies (“BVI
BC’s”). The new BVI Business Companies shall be the only
type of companies that may be incorporated as of January
2006. As informed previously, the BVI BC’s is a modern piece
of legislation that retains the “look and feel” of the
IBC’s. The complete document can be downloaded here: Word
Format (195Kb) /
PDF Format (65 Kb)
We take this opportunity to remind you that only “BVI BC’s”
may be incorporated as of January 2006 since all BVI
companies shall be governed by the new “BVI Business
Companies Act, 2004.
We have been informed by the BVI Financial Services
Commission that they anticipates the enactment of some
amendments to the BVI BC Act, 2004 before the end of 2005,
to facilitate the full introduction of the new legislation
beginning 1st January, 2006. We shall provide you more
detailed information as soon as it is officially available.
Should you have any question or comments, please do not
hesitate to access us at We shall glad to assist you.
RESIDENTIAL TOURISM - Bill of
Law (First Draft) October 2005
Whereby a special Residential Tourism regime is created for
the promotion and development of national and foreign investment
in Residential Tourist Complexes designed for tourists, foreign
residents retired from active life and/or foreign pensioners and
investors.
Download in:
PDF Format (404 Kb)
BVI
FREQUENTLY ASKED QUESTIONS (F.A.Q.)
AMENDMENTS TO THE IBC ACT March 2005
We are pleased to provide you certain frequently asked
questions (“FAQ”) and answers concerning the 2003 and 2004
amendments, which were introduced to the International Business
Companies Act (“the IBCA”) of the British Virgin Islands (“BVI”).
These FAQ will also include BVI’s Business Companies Act, 2004
(“the BCA”), which will replace the IBCA on 1st January 2006.
The BCA contains special provisions with regard to the
formation, register of directors and the applicable annual
licence fee for the IBCs.
A. 2003 and 2004 Amendments to the
IBCA
(International Business Companies Act)
1.
Shareholders/Shares
(a)
Are bearer shares allowed?
-
Yes, but subject to Custodian Services.
(b)
Does the Share Register need to be
kept at the Registered Office?
-
Yes.
2.
Directors
(a)
Is there any requirement to keep a
Register of Directors and/or Officers? If
yes, where?
-
Yes, at the Registered Office. The Register
of Directors must contain information such
as name, address and date of appointment, as
well as when the director ceases to be a
director.
(b)
Who appoints the first Directors and
when do they need to be appointed?
-
The Subscriber shall appoint the first
directors within 30 days of incorporating
the IBC.
3. Transitional Provisions of the IBCA
(International Business Companies Act)
(a)
Do the Existing IBCs have a grace
period during which time the Register of
Directors has to be sent to their Registered
Office?
-
Yes, until 31st December 2005.
(b)
Which bearer share regime is
applicable for the Existing IBCs (these
are IBCs incorporated prior to 31st
December 2004)?
-
All bearer shares issued prior to 1st
January 2005 must on or before 31st December
2010:
-
Deposit these bearer shares with a custodian
authorised or recognised by the Financial
Services Commission; or
-
Exchange or convert these bearer shares for
registered shares.
B. New BCA
(Business Companies Act)
1. Objects and reasons of the BCA
(a)Which
is the main objective of the BCA?
-
The BCA amalgamates The Companies Act (CAP
285) and the IBCA into a modern,
sophisticated and innovative single
corporate statute.
(b)Which
other objectives the BCA included?
-
To abolish ring fencing.
-
To retain, as far as possible, the “look and
feel” of the IBC.
-
To make the transition of the BCA as
seamless as possible for existing IBCs.
-
To recognise that corporate legislation is
enabling, not regulatory, in nature.
-
To provide significant added value by
enhancing the “IBC product” particularly for
those with more sophisticated uses for a BVI
company.
-
To ensure that the new BCA is a modern piece
of companies legislation that complies with
international standards, as far as
ascertainable and as far as relevant to the
BVI.
2. Important Features of the BCA
(a)
What types of company the BCA
includes?
-
The BCA permits a company to be incorporated
as a company limited by guarantee, as a
hybrid company (a company limited by
guarantee and shares) or as an unlimited
company, with or without share capital.
-
The BCA also provides for an entirely new
type of company called “restricted purposes
company” (“RPC”), which is expected to be
used as a special purposes vehicle, in
multi-million dollar structured finance
transactions.
-
The BCA allows insurance companies, mutual
funds and such types or descriptions of
categories of companies as may be prescribed
in the Regulations to be incorporated, or
registered, as Segregated Portfolio
Companies (“SPCs”).
(b)
Are there any special rules related
to the company names?
-
A company is able to incorporate using its
company number as its company name (eg BVI
Business Company No.12345 Limited).
-
Companies are allowed to combine a company
number name with a foreign character name.
It will no longer be necessary, therefore,
for a company with a foreign character to
have a “translated name”.
-
The reuse of disused names is permitted in
certain circumstances.
(c)
Are there any changes relating
registration of charges?
-
The BCA contains completely new provisions
governing the registration of charges.
-
Registration will not be compulsory and
there is no fixed period within which a
charge must be registered. However, the
date of registration will govern priority.
-
Registration may be affected by the secured
creditor.
C.
Transitional Provisions of the BCA
1. Effectiveness of the IBCA
(a)
Can new companies be incorporated
under the IBCA?
-
Yes, until 31st December 2005.
(b)
Will the IBCA continue to be in
effect?
-
Yes, until 1st January 2007, when
it will be repealed.
(c)
Is there a procedure to re-register
an IBC as a Business Company?
-
Yes, an IBC may re-register under the BCA at
any point during the transition period. The
application filed with the registrar must be
accompanied by memorandum and articles of
association (“M&AA”) and a document signed
by the Registered Agent signifying consent
to act as Registered Agent on the Companies
re-registration.
-
All IBC not yet re-registered as Business
Company by 31st December 2006
shall be deemed to be re-registered under
the BCA on 1st January 2007.
(d)
Is there a grace period for the
Existing IBCs (these are IBCs
incorporated prior to 31st
December 2004) during which time the
Register of Directors has to be sent to
their Registered Office?
-
Same as point (A) (3) (a) above.
(e)
Is there a grace period for the
Existing IBCs during which time an
authorized or recognized custodian is
appointed and approved by the Financial
Services Commission (“FSC”)?
-
Same as point (A) (3) (b) above. The
authorized or recognized custodian is to be
handled by the Registered Agents as provided
by the FSC’s Aide Memoire #3, which does not
have force of law and by the IBC (Amendment)
Act, 2004, which will be repealed on 1st
January 2007. Although this is not directly
addressed in the BCA, we expect it will be
included in the future regulations.
2. Fees payable to the BVI Registry
(a)
Which of the annual licence fees are
payable to the authorities as of 2005 for
the Existing IBCs or CAP 285?
-
Companies authorised to issue Registered
Shares only:
-
US$350.00 if the authorised capital does not
exceed US$50.000.00.
-
US$1,100.00 if the authorised capital
exceeds US$50,000.00.
-
Companies authorised to issue Bearer Shares:
Capital
not exceeding US$50,000
Capital
exceeding US$50,000
2005 to
2007
US$350.00
US$1,100.00
Custodian
located in BVI
Custodian
located outside BVI
Custodian
located in BVI
Custodian
located outside BVI
2008 to
2010
US$600.00
US$800.00
US$1,100.00
US$1,100.00
Starting
2011
US$800.00
US$1,100.00
US$1,100.00
US$1,350.00
Note: There is not prescribed fee for
Existing IBCs, which bearer shares do not
have to be placed in the custody of a
custodian until 2010. This issue has been
formally raised with the Financial Services
Commission and we are awaiting their
clarification.
(b)
What is the registration fee to
incorporate IBCs and CAP 285 in 2005 with or
without par value shares?
-
Companies authorised to issue Registered
Shares only:
-
US$350.00 if the authorised capital does not
exceed US$50.000.00.
-
US$1,100.00 if the authorised capital
exceeds US$50,000.00
-
Companies authorised to issue Registered
Shares and Bearer Shares:
-
US$1,100.00 for any authorized capital.
PANAMA: NEW TAX
REFORM KEEPS TERRITORIAL TAX SYSTEM UNCHANGED TO BENEFIT
THE OFFSHORE INDUSTRY. February 2005
Dear Clients:
Recently, the Government enacted fiscal reforms, adopting Law
No.6 of 2005, which was published in the Official Gazette No.
25,232 on 3rd February 2005. Although sweeping in scope, these
reforms have not changed the basic criteria of territorial
taxation applicable in Panama. In other words, income derived
from offshore activities will remain untaxed. No tax returns
need to be filed nor are reports to Tax Authorities required
from companies or legal entities carrying out their activities
exclusively outside the Panamanian territory.
These are the main aspects of the new legislation affecting
Panamanian companies:
Annual Franchise Tax New Incorporations
Under the new legislation, every new company or private
foundation will be required to pay a US$250.00 franchise tax
when its articles of incorporation or foundation charter is
filed at the Panamanian Public Registry. Starting from the
second year of incorporation, companies and private foundations
will be required to pay a US$300.00 franchise tax per year.
Existing Companies
For existing companies and private foundations, the annual
franchise tax will be increased from US$250.00 to US$300.00 per
year. Such increase will become effective as of 1st January
2006. In other words, in 2005 all companies and private
foundations will pay an annual franchise tax of US$250.00.
Payment Periods
Deadline for payment of the annual franchise tax has also
changed and we should receive payment by:
(a) On 15th June every year (for entities incorporated between
1st January and 30th June), or
(b) On 15th December every year (for entities incorporated
between 1st July and 31st December). Formerly, payments were due
on 30th June and 31st December.
Fines and Penalties
Companies and private foundations that do not pay the annual
franchise tax for two (2) or more consecutive periods since 2003
period, will be subject to a US$300.00 fine (increased from
US$250.00). This increased fine of US$300.00 is with immediately
effect in the case you require to reactivate a company or
private foundation. The penalty for late payment remains at
US$50.00 per period.
Statutory Dissolution According to the new provisions, every company or private
foundation that does not pay the annual franchise tax for ten
(10) consecutive periods will be subject to a statutory
dissolution procedure (i.e. the company or private foundation
may not continue existing and must liquidate its assets and
liabilities). Such legal entities will be subject to a
definitive de-registration at the Public Registry.
It is also important to note that fines ranging from five (5) to
ten (10) times the amount of the franchise tax owed to the
Panamanian Treasury will be applied to any persons (individuals
or legal entities) who have received funds for payment of the
annual franchise tax but who have in fact not paid such sums in
accordance with the provisions set forth in the Law.
If you have any questions of comments, please do not hesitate to
contact us at We shall glad to assist you.
URGENT - BVI NEWS
INTRODUCING THE BUSINESS COMPANIES ACT (“BC
Act”) December 2004
Dear
Clients: The new Business Companies Act (the “BC
Act”), will enter into effect on 1st January
2005. We set out below the main information on
same that will affect IBCs incorporated as at
the end of the year.
Bearer
Shares Regime for Companies Incorporated prior
to 31st December 2004 (“Existing Companies”)
A. Confirmation
of Grace Period – Appointment of Custodian
All Existing
Companies which shall continue issuing
bearer shares will have up to 31st December
2010(*) to appoint an authorized or
recognized custodian approved by the
Financial Services Commission (“FSC”).
(*) This is the concept being handled by the
Registered Agents as contained in the FSC
Aide Memoire #3, which does not have force
of law, and in the IBC (Amendment) Act,
2004, which will be repealed on 1st January
2007. Although this concept is not directly
addressed in the new BC Act, we expect it
will be included in future regulations.
B. Annual
License Fee
Existing
Companies that may issue bearer shares as
per their Memorandum and Articles of
Association will pay the annual license fee
as follows:
Capital
not exceeding US$50,000
Capital
exceeding US$50,000
2005 to
2007
US$350.00
US$1,100.00
Custodian
located in BVI
Custodian
located outside BVI
Custodian
located in BVI
Custodian
located outside BVI
2008 to
2010
US$600.00
US$800.00
US$1,100.00
US$1,100.00
Starting
2011
US$800.00
US$1,100.00
US$1,100.00
US$1,350.00
Register of
Directors
IBC’s incorporated as at 31st December 2004
will have until 31st December 2005 (12 months
starting from 1st January 2005) to send a copy
of their Register of Directors to their
Registered Office.
Effectiveness of the IBC Act
It will only be possible to incorporate new
companies under the IBC Act until 31st
December 2005, but the IBC Act will continue
to be in effect until 1st January 2007, when
it will be repealed and all IBC’s will be
converted into Business Companies under the
new proposed BC Act.
Automatic re-registration under Business
Companies Act
It is important to point out that, according
to the BC Act, re-registration of IBC’s as
Business Companies will be automatically
processed by the Registrar as from 1st January
2007. No amendments to the M&AA by the
shareholders or filings by the directors or
registered agents will be necessary.
Possible solutions or alternatives for the
continuation of bearer shares system:
Purchase IBCs
from our stock of Existing Companies
Change bearer
shares to nominative shares
Unit
Foundations (for Professional Managers)
Companies from
another jurisdiction as Shareholder
Panama Private
Foundations as Shareholder
Trusts for
Shares
Continuation
to other jurisdictions such as Panama, Samoa
or Seychelles
Should you be
interested in any of the above alternatives
and/or require any further information, please
contact us at
or call us at
(507) 205-5888 or (507) 264-2322.
ANNOUNCEMENT
LEGISLATIVE UPDATE - BVI COMPANIES ACT November 2004
The Chief Minister of the British Virgin
Islands has proposed to the Legislative
Council the enactment of a Business Companies
Act that will unify the Companies Act (for
local companies) and the IBC Act, adopting
features of the IBC.
The new company regime to be established in
BVI will be similar to the one currently in
place in Panama whereby all companies are
created under the same legislation, but where
the advantages come from a well defined tax
system applicable equally to all persons and
companies.
The Chief Minister’s proposal includes a
serious reform to the BVI’s tax system which
will include the following measures:
1. Abolition
of corporate income tax, now levied at 15%
of profits (or 1% if certain circumstances
are met).
2. Elimination of personal income tax in its
current form.
3. Re-structuring of the annual Government
License Fee payable by companies which will
be increased by 20% (i.e. $60 for companies
paying $300 now, and $200 for companies
paying $1,000 now, so that the new License
fees will be $360 and $1,200, respectively).
The new
Companies Act will maintain all the advantages
currently enjoyed by IBCs. As expressed by the
Chief Minister, “The new BVI Business
Companies Act was designed to safeguard the
attributes that have made the BVI the world’s
premier offshore company domicile.” There will
be a two-year transition to the new regime,
allowing companies to comply with the
requirements of the new Act.
We will be following events very closely and
will keep you informed.
ANNOUNCEMENT
Mossack Fonseca works for you 24 hours a
day!!! August 2004
We are pleased to inform you that Mossack
Fonseca now offers 24-hour assistance from our
Panama office as well as night services from
our BVI office from 23:30 (BVI local time) on,
which allows us to provide more expeditious
attention to your goodselves and, above all,
to eliminate the time difference between you
and our Panama and BVI offices!
Some of the main advantages of this added
value are:
Your
e-mails will be read, assigned and answered
more expeditiously. You will certainly
start receiving our replies more quickly.
Name
check. Names will be checked in the Panama, BVI and Bahamas jurisdictions 24 hours a
day.
Assistance
by telephone. You can call us at any time
and we will assist you over the phone
regarding any questions you may have.
Cases can
be followed up 24 hours a day.
In this regard,
you may send your messages/comments through
the CIS or to the e-mail accounts that have
already been made available to you, namely:
A) At the Panama Office:
Panama
Section:
Samoa
Section:
Seychelles Section:
BVI
Section:
Bahamas
Section:
Nevada
Section:
Hong
Kong Section:
You can also
send faxes to our Panama office at (507)
263-7327 or call us at (507) 205-5888 /
264-2322.
B) At our BVI Office: or send a
fax at (284) 494-4841 / 494-5884 or call us at
(284) 494-4840 / 494-4976.
We trust this service is of your entire
satisfaction and of great help to your
goodselves. Should you have any comments,
please contact us at any of the
above-mentioned e-mail accounts.
LATEST AND
FINAL NEWS ON THE BVI IBC AMENDMENT ACTS August 2004
Further to all our previous exchanges, we are
pleased to inform you that the BVI Financial
Services Commission (“FSC”) prepared a special
supplement to answer the most frequently asked
questions (FAQ’s) regarding the IBC
(Amendment) Acts, 2003 and 2004 (“IBC
Amendments Acts”), which shall come into
effect as of 1st January, 2005.
Below please
find an update of the most relevant changes in
respect of IBCs, to wit:
A. NEW IBCs
(refers to IBCs incorporated after 01/01/05)
As of 1st January 2005.
1. The bearer
shares pertaining to new IBCs shall be held by
authorised or recognised custodians, who will
be person(s) approved by the Financial
Services Commission (“FSC”). (We are pleased
to inform that MOSSFON will be able to render
this service in 2005.)
2. New IBCs that
may issue bearer shares shall pay a licence in
the amount of US$1,000.00
3. New IBCs
shall keep at all times an updated Register of
Directors at the registered office of the
Registered Agent
B. EXISTING
IBCs (refers to IBCs incorporated prior to
31/12/04)
From 1st January 2005 to 31st December 2010.
1. Bearer
Shares Regime: All existing companies
will have up to 31st December 2010 to:
i) Appoint an authorised or recognised
custodian approved by the Financial Services
Commission if the existing company shall
continue issuing bearer shares.
ii) Amend their Memorandum and Articles of
Association to delete references to bearer
shares, unless they adopt the new regime
relating to the immobilization of shares
through a custodian.
We are pleased
to advise that MOSSFON will be able to render
this service in 2005.
2. Annual
licence fee: The FSC issued the following
Statement on Fees:
The IBC
(Amendment) Act 2004 establishes the principle
that IBCs which elect to retain the power to
issue bearer shares will be charged a premium
licence fee over the fee payable by IBCs that
do not retain this power. The BVI Government
has accepted there should be a transitional
period for existing IBCs to come into line
with the provisions of the IBC Amendment Acts.
The premium licence fee will thus not
immediately apply to IBCs on the Register
prior to 1st January, 2005. These will have up
to 31 December 2010 either to remove the power
to issue such shares or to start paying the
premium licence fee. The BVI Government has
indicated that a modest increase be added to
the licence fee for those IBCs that retain the
power to issue bearer shares during the final
three years of the transitional period i.e.
after 2007. This is intended to serve as an
incentive to prohibit the issuing of bearer
shares before 2010 by those IBCs that neither
have issued such shares nor intend to issue
them.
From 1st
January to 31st December 2005
Register of
Directors: Existing IBCs shall have up to
12 months, i.e. up to 31st December 2005, to
establish and maintain a Register of
Directors. We strongly encourage all existing
IBCs to begin now the process of establishing
and maintaining a Register of Directors at the
Registered Office.
For your ease of
reference, we copy below some FAQ’s provided
by the FSC, which we feel could be of your
interest.
Should you have
any questions or comments, please do not
hesitate to contact us at
Kind regards,
MOSSACK FONSECA & CO. (BVI) LTD.
FREQUENTLY ASKED QUESTIONS
In an effort to clarify the questions being
asked, the FSC has provided a special
supplement of answers to frequently asked
questions (FAQs) on the immobilisation of
bearer shares regime.
Questions:
1. When will the International Business
Companies (Amendment) Acts of 2003 and 2004
come into effect?
Both will come into effect on 1 January 2005.
2. What is the deadline for maintaining a
register of directors at an IBCs registered
office?
IBCs incorporated before the IBC (Amendment)
Act 2003 comes into force on 1 January 2005
will have up to 12 months, i.e. up to 1
January 2006, to establish and maintain a
Register of Directors. IBCs incorporated after
the 1 January 2005 will be required to comply
with Section 10 of the IBC (Amendment) Act of
2003.
3. The Act refers to the amendment of the
“Memorandum”, but does not refer to the
amendment of the “Articles”? Do the Articles
also have to be amended?
The Articles should also be amended so as to
delete references to bearer shares, as it is
presumed that the Articles will be consistent
with the “Memorandum”.
4. Do the “transition periods/dates” apply
only to the immobilisation of bearer shares or
to the whole IBC (Amendment) Act of 2003?
The transition period is applicable to the
immobilisation of bearer shares. However, if
at the expiration of the transition period a
company retains the right to issue bearer
shares, it would be subject to the payment of
increased licence fees.
5. During the first four years of the
transitional period, should bearer shares be
held by a custodian?
Companies incorporated prior to 1, January
2005 have up to 31 December 2010 to ensure
that all issued bearer shares are held by a
custodian. Companies incorporated after 1
January 2005 and whose MAA does not prohibit
the issue of bearer shares should deposit all
bearer shares with a recognised or authorised
custodian from their date of issue.
6. What does the phrase “existing IBCs” mean?
Existing IBCs means companies incorporated
prior to 1 January 2005, the effective date of
both of the IBC (Amendment) Acts 2003 and
2004.
7. What happens at the end of the transition
period ending 31 December 2010?
At the end of the transition period, all IBCs
should be in full compliance with the
provisions of the Act relating to the
immobilisation of bearer shares. Effectively,
all bearer shares issued must have been
deposited with custodians before that date and
those IBCs that still retain the power to
issue bearer shares per their MAAs will be
required to pay a premium for this option.
8. Will it be possible for companies that have
bearer shares in issue, to amend their M&A in
order to prohibit the future issue of bearer
shares whilst still keeping in issue the
bearer shares issued prior to the amendment?
If so, how will the provisions of the Act
affect these companies?
The 2004 Amendment Act does not contemplate
this scenario as it provides that a company
that amends its Memorandum to prohibit the
issue of bearer shares is required to file a
declaration that it does not have bearer
shares in issue.
Legal Information
The information on this web site is believed to be correct but cannot be guaranteed. Opinions constitute our judgment and are subject to change. The information contained in the site is for general information only and is not intended to constitute legal advice.
