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Decoding the new compliance requirements for offshore companies.

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2024 marks a turning point for offshore companies as several regulatory updates emerge. These new compliance requirements bring a wave of change that aims to refine operational standards and enhance industry transparency. In this article, we explore some of the significant requirements for companies registered in the British Virgin Islands (BVI), Mauritius, Samoa, and Seychelles, highlighting how they impact and shape the future of offshore operations.

Considerations for offshore investments 

Offshore jurisdictions offer numerous benefits, including favourable tax regimes, enhanced privacy protections and flexibility in corporate structures. Companies and individuals can engage in a range of investment activities and structures, including, for example:

  • Holding companies to consolidate and manage investments, subsidiaries, or assets.
  • Intellectual property (IP) ownership, royalty, and licensing arrangements.
  • International trading companies for cross-border trade and import-export activities.
  • Investment funds, including hedge funds, private equity funds, and venture capital funds.
  • Joint ventures and strategic partnerships.
  • Real estate investment and property holding.
  • Shipping and maritime activities.
  • Special Purpose Vehicles (SPVs) for isolating and managing risks associated with specific projects or investments.
  • Trusts and asset protection structures.
  • Wealth management and estate planning.

However, foreign investors should also consider the perception of offshore jurisdiction by international organisations and regulatory bodies, including those in their country of origin or residence.

Being perceived as non-cooperative or uncooperative by organisations like the OECD may result in increased regulatory scrutiny, reputational risks, and potential challenges in conducting business or accessing international markets. Therefore, foreign investors should seek expert advice to help them make a well-informed decision.

Compliance filing in offshore jurisdictions

A set of compliance filings is mandatory for offshore companies. The annual filing helps maintain transparency—providing a snapshot of key company information at a specific date—and allows the authorities to keep up-to-date records of the company.

The content and timeline can vary depending on the jurisdiction, but generally, it includes details such as:

  • The company’s name and registration number.
  • The registered office address.
  • Details of directors and secretaries.
  • Information about shareholders and share capital.
  • A declaration that the company has complied with the relevant laws and regulations.

Submission to the relevant authorities is usually done online through a government portal or a registered agent. Some jurisdictions may require the annual return to be audited by an independent auditor.

The filing deadline also varies by jurisdiction: in the BVI, the annual return must be submitted within nine months of the financial year’s end.

Risks of non-compliance

Non-compliance with the annual return requirements can have serious consequences. These may include financial penalties and loss of good standing, and the company may be struck off the register in extreme cases.

Acclime Global Business team can help you with all your recurring mandatory procedures.

Bookkeeping requirements in offshore jurisdictions

While the requirements for offshore bookkeeping can vary depending on the jurisdiction, most jurisdictions require companies to keep proper records. These records, which may include profit & loss statements, general ledger, and balance sheet, must always be available upon request by the registered agent.

Offshore bookkeeping is crucial for several reasons. Firstly, it ensures compliance with the laws and regulations of the jurisdiction where the company is registered. Secondly, it provides a clear and accurate picture of the company’s financial health, which is essential for decision-making. Lastly, well-maintained financial records can enhance the credibility of an offshore company with banks, regulatory authorities, and potential partners.

Decoding the new compliance requirements for offshore companies

About Acclime.

Acclime is your trusted partner for navigating global offshore jurisdictions, offering premier corporate, trust and advisory services to private and corporate clients and professional intermediaries in global offshore jurisdictions and throughout Asia-Pacific.