| NEWS
New BVI law has been enacted
The Government of the British Virgin Islands has now enacted the
new legislation which alters the jurisdiction's bearer share regime
for the end of 2004. The International Business Companies (Amendment)
Act 2003 which was passed by the BVI Legislative Council (LEGCO)
received its second and third readings on April 17th, 2003
As of December 31st 2004, all international business companies
(IBCs) located in BVI will be required to establish and maintain
a Register of Directors, and must appoint their first director within
30 days of the IBC's incorporation. Furthermore, Bearer shares must
be delivered to an authorized / recognized custodian, which will
be entities approved in accordance to the Financial Services Commission
Act of 2001.
The act prohibits authorized custodians from transferring bearer
shares to anyone other than an authorized custodian.
The provisions concerning bearer shares and directors
are as follows:
Bearer Shares
The Custodian: Bearer shares will be delivered / held in the custody
of either an "Authorized Custodian" - which will need
to be an authorized entity that holds a general license under the
Banks and Trust Companies Act 1990 - or a "Recognized Custodian"
- which may be non BVI resident, specifically approved by the BVI
Financial Services Commission to act as a custodian.
Custody of Information: The Authorized - Recognized Custodian will
hold the following information related to the bearer shares under
custody:
- the full name of the beneficiary owner of the shares; and
- the full name of any other person having an interest in the
shares
- a statement that no other person has any interest in the shares.
- upon the IBC Amendment coming into force, no longer will it
be possible for a company to deliver bearer shares to any person
other than an Authorized or Recognized Custodian, as described
here above.
- In order to avoid being disabled, existing companies will have
a two-year grace period for the immobilization of bearer shares
or the conversion of them into registered shares. Failure to do
so will have the company wound up. In the event of the company
being wound up, the net proceeds of the liquidation will be available
to the holder of the bearer shares upon surrender of the bearer
share certificates. In the other hand, the directors of a company
will have the power to compulsorily redeem bearer shares and hold
the proceeds of such redemption under a trust agreement for the
beneficial owners of the shares.
- New Companies wanting to include in their Memorandum and Articles
of Association bearer shares after the Act has been brought into
force will pay a registration fee and annual license of US$.1000.00
each. A transition grace period until December 31st, 2004 will
be given to existing companies to amend their Memorandum and Articles
of Association so as to remove the right to issue bearer shares,
should they not wish to pay the increased license fees? It is
understood that the new annual license and registration fee will
apply as soon as the act is brought into force.
Director Information
According to the Act it is mandatory for a Register of Directors
to be kept at the BVI registered office of all BVI companies.
Such registry will not however be filed at the BVI Registry of
Corporate Affairs or any other governmental office or authority.
Information on directors will remain subject to strict confidentiality
safeguards. Directors data and information will not apply retrospectively
and information will only be required in respect of those acting
directors as those holding office on and after the effective date
of the IBC Amendment. A grace period of twelve (12) month will
be provided to comply with the requirement after the Bill is brought
into force.
Alternatives
Existing Companies: To avoid payment of increased annual license
fees to US$.1000.00, we can amend the Memorandum and Articles of
Association to eliminate their capacity of issuing bearer shares.
Kyriakides, Savvides & Associates can provide individuals or
corporations to act as nominee-registered shareholders in place
of the bearer shares. This information is held at our registered
office in BVI and is not of public domain.
Panama Companies as Shareholders: Panama Companies allow the use
of bearer shares without any restriction. Using Panama Companies
will enable you to continue enjoying the prestige of BVI IBC´s
and the confidentiality that you desire.
Re domiciliation: Another good possibility is to re domicile / continue
the company to Panama, which has no restrictions on bearer shares.
We expect that our BVI representation will become an entity authorized
to act as Recognized Custodian
Should any additional information on how to restructure your BVI
IBC, please contact: ksa.pre@cytanet.com.cy
9, Theklas Lyssioti street, Xanthi Court, 1st floor,
Phone: 00357-25343477, Fax: 00357-25343484
P.O BOX 56245, 3030 Limassol – Cyprus
For information write to ksa.pre@cytanet.com.cy
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