BVI Supporting Firms To Comply With Economic Substance Code
by Mike Godfrey, Lowtax.net, Washington
10 May, 2019
The British Virgin Islands financial services promotional agency BVI Finance has held educational sessions on the new draft Economic Substance Code in the BVI, London, and Hong Kong.
The draft Code sets out the effects of the Economic Substance Act 2018 and provides guidance to ensure that legal entities which fall within the scope of the legislation are aware of the actions they need to take to ensure compliance.
The Act imposes economic substance requirements on all BVI companies and limited partnerships with legal personality (LPs) which are carrying on "relevant activities" unless they are resident for tax purposes in a jurisdiction outside the BVI (provided that the other jurisdiction is not on Annex I to the EU list of non-cooperative jurisdictions).
The key activities identified by the European Commission Code of Conduct Group are: banking, insurance, fund management, financing and leasing, shipping, intellectual property, collective investment vehicles, and holding companies that generate income from any of these key activities.
The sessions, chaired by Elise Donovan, the Chief Executive Officer of BVI Finance, provided private sector representatives with the opportunity to hear directly from the drafting team, attorney Michael Furness QC, adviser Steve Johnson, and Executive Director of the Office of International Business (Regulations) Neil Smith.
The first series of education sessions were held in the BVI last week, including briefings with the Association of Registered Agents and the BVI Chamber of Commerce.
Following sessions in Hong Kong, the final one will take place in London on May 7, with the total number of attendees across all three destinations expected to reach around 800 people.
Commenting, Elise Donovan, Chief Executive Officer of BVI Finance, said: "We are pleased and grateful for the engagement of the BVI's global business and financial services sector, both on-island and internationally, as we work towards the most effective solution for implementing the Economic Substance Act."
"The presentations have been very well received, with many private sector attendees noting they were thankful of the opportunity to engage on this important topic, and that their confidence in their continuing relationship with the BVI has only increased. The process of establishing the Act has been a collaborative process throughout and this approach will be maintained over the coming weeks and months as it is actively implemented."
"Although the process is still ongoing, BVI Finance is working alongside the BVI Government to help implement the legislation in a manner that will meet the EU's substance needs, whilst preserving the future and continued prosperity of our successful business and financial services industry. Together we will continue to cement the BVI's position as a global leader in international trade, business and investment."
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