The Government of the British Virgin Islands has brought into force the IBC (Amendment) Act of 2003 and the EBC (Amendment) Act of 2004 containing regulations applicable to international business companies authorised to issue bearer shares.† Different regulations are to apply to said companies depending on whether they were organised before or after the 1st of January, 2005.

Existing IBCs and IBCs to be organised before the 1st of January, 2005

In the case of international business companies organised before the 1st of January, 2005 with documents of constitution that authorise the issue of bearer shares, the transition period for the immobilisation of bearer shares has been extended to the 31st of December, 2010 (the ìDue Dateî).

All bearer shares in issue shall have to be placed with an authorised or a recognised custodian by said Due Date.

Any company wishing to retain the power to have bearer shares in issue shall thereafter have to pay a yearly license fee of US$1,000.00.

Companies organised by the 1st of January, 2005 with documents of constitution authorising the issue of bearer shares must amend said documents to delete the provision containing such authority by the 1st of January, 2008, to avoid paying a higher license fee.

The present registration/license fee of US$300.00 shall continue to apply only until the 31st of December, 2004 in the case of international business companies to be organised with documents of constitution authorising the issue of bearer shares.

IBCs to be organised after the 31st of December, 2004

All international business companies organised after the 31st of December, 2004 with documents of constitution that authorise the issue of bearer shares shall have to immobilise said shares upon their formation, and shall have to pay an annual license fee of US$1,000.00.† If their documents of constitution prohibit the issue of bearer shares, the IBCs formed after the 31st of December, 2004 shall continue to pay the standard US$300.00 license fee.

Immobilising bearer shares means that they shall have to be deposited with an authorised or recognised custodian.

Authorised and recognised custodians

After the 31st of December, 2010, all bearer shares in issue must be deposited with an authorised or a recognised custodian or exchanged for registered shares. We beg to remind all clients of the Quijano & Associates Group that, in lieu of bearer shares, the issue of registered shares may be made in favour of legal entities such as Panamanian corporations or private interest foundations.

Legislation enacted provides that authorised custodians shall be stock exchanges (such as the New York Stock Exchange) and clearing houses (such as Euroclear Plc) operating in member country of the Financial Action Task Force (FATF).

The same legislation provides that trust companies licensed in the B.V.I. such as Quijano & Associates (BVI) Limited, which the BVI Financial Services Commission may consider ìfit and properî, shall be able to act as authorised custodians.