In order to maintain compliance with international stipulations the House of Assembly passed the “BVI Business Companies (Amendment) Act, 2019” on 17 December. However, most of the Members of the Opposition complained that they are unhappy that the various changes that are being implemented to regulate the international financial services sector are making it difficult for local businesses.
The Bill which was piloted by Premier and Minister for Finance Hon. Andrew Fahie sought to amend the BVI Business Companies Act 2004 to address issues relating to the filing of directors. Specifically, the Bill establishes a timeframe by which companies must file their register of directors.
The Bill also makes provision for the registering of directors for a BVI company being restored to the registrar of companies. Additionally, the Bill makes provisions to allow the registrar to issue certificates of good standings to a BVI Business company that has not filed for its register of directors where the register of directors is not yet due to be filed under the Act.
Minister for Transportation, Works and Utilities Hon. Kye Rymer was the first to debate the Bill and he told the House of Assembly that the amendments of the Act is good news for companies who were struck from the register and now wish to be restored.
The Minister for Transportation also noted that the amended BVI Business Companies Act ensures that “the BVI continues to lead as an international finance center and that its corporate vehicles are properly registered in accordance with the accepted international standards.”
Concern for Local Businesses
Leader of the Opposition Hon. Marlon Penn was to the point about his concerns on how such legislations affect small BVI businesses. He told the House of Assembly, “We have to make sure that our people are not burdened through the regulatory process.”
Senior Member of the House of Assembly and Third District Representative Hon. Julian Fraser first raised the issue of local businesses being affected by international financial services requirements.
Hon. Fraser told the House, “My pet peeve with the financial services sector has been their reluctance to accommodate local companies within the financial services sector in light of all these requirements from the international community. This is now going into our second Premier with whom I have been raising this particular issue. This current Premier has been sitting right next to me in the Opposition for the last eight years listening to me about this matter.”
The Opposition Member said that it is unfair that small BVI businesses are being saddled with a number of requirements and stipulations that were meant to regulate the international financial services industry.
In fact bureaucracy is getting out of hands in this Territory and many local businesses have been airing their discontent for years; one businessman said he is leaving the BVI.
Hon. Fraser said, “Local companies should not have to be subjected to the rigors and the scrutiny that multinationals who can afford to establish a company for a single transaction and then liquidate…Asking our local companies to meet the requirements of the international community. I don’t think our local companies are in the least bit close to involving in money laundering and the like – which is a legitimate request for the international community to have these foreign companies scrutinized. It’s a legitimate request, but the little store on Main Street who is in a corporation needs to have a registered agent which isn’t free about $400 a year. I said before and I am saying it today that it is wrong and it needs to change,” he added.
The issue was also harped on by Second District Representative and Opposition Member Hon. Melvin ‘Mitch’ Turnbull who told the House that legislators are expected to protect local businesses from such situations. “In the absence of us putting something in place to protect them they have to fall in line with these international requirements. What it would simply mean…is that we are putting our people in a very peculiar and reckless position because if they are not following these guidelines when the rubber hits the road and everything comes to a head we wont have the same businesses,” the Opposition Member declared.
Hon. Turnbull also pointed out that it is an unfair pairing to have local and international companies subject to the same requirements because international companies are large multinational organizations with large budgets.
“I have a lot of local businesses in my District in my community when they realize that they are expected to comply with these requirements to have registered agents and have certain things in place. The cost associated with it they are forced to be competing with some of these big companies with millions and trillions of dollars that operate here in our shore then and only then,” the Second District Representative stated.
In his wrapup of the debate Premier Fahie explained that the matter is not as clear cut as some members of the House of Assembly purport it to be. The BVI Leader explained that efforts were made to separate the local from international organizations but this was unsuccessful.
“With some of the information that I have heard even when you try to help the local companies …even those areas the international world saying to take them out…When you dealing with these international organizations and you tell them you are trying to help mom and pop while that is what we need to do and we are fighting. They don’t care if its mom pop uncle aunts store. They look at if you do anything special for them then that could be termed at ringfencing…That’s the hard part, that is the really hard part about it,” the Premier explained.