Provisions for transitioning bearer share companies to non-bearer share companies were originally enacted for IBCs in 2003. These provisions were carried forward to Schedule 2 of the BVIBCA.

The existing transitional provisions require companies to fully immobilise their shares by 31 December 2010. However, the BVI FSC explained it had become aware of industry concerns that compliance with the transitional arrangements would place a huge burden on the sector, given the recent introduction of new companies legislation and a new online companies registry.

"Perhaps even more important, it would cause considerable inconvenience to the directors and owners of former IBCs who will have to pass resolutions amending their memoranda of association," the FSC observed.

"The BVIBCA and the IBC Act before it were designed to provide a legal mechanism for incorporating companies without unnecessary administrative burdens. The effort that would be required to comply with the existing transitional provisions is not consistent with this underlying philosophy," the Commission noted.

The FSC said that it has listened to the representations that have been received from industry, and has tried to find a workable solution that will achieve the immobilisation of all bearer shares before 2010, but which will impose the minimum administration on BVI companies.

An Order by the Executive Council attempts to achieve this by deeming that the memorandum of every former IBC will be amended with effect from the transition date to prohibit the issue of bearer shares, unless the company elects that the deeming provision should not apply; and by abolishing the staged increases in annual fees between 2008 and the transition date.

The FSC announced that, given this will make the transitioning of most bearer share companies to non-bearer share companies a straightforward process, the transition date has been brought forward one year from 31 December 2010 to 31 December 2009.

During the years 2008 and 2009, a former IBC that is a bearer share company will pay the same fee as a non-bearer share company. On 31 December 2009, the memorandum of a bearer share former IBC will be deemed to be amended to prohibit the issue of bearer shares, and the company will become a non-bearer share company. It will be open to any bearer share former IBC to elect to disapply this deeming provision. As a consequence, the vast majority of former IBCs need to do nothing.

"The Commission is pleased to note that, once again, it has been able to satisfy the requirements of international standards whilst remaining a cost effective and attractive domicile for international companies," the regulator said.

Prior to the enactment of The BVI Business Companies Act, 2004, BVI companies were administered under two statutes: CapCos or local companies under Cap. 285; and IBCs under The IBC Act 1984, Cap. 291. With a view to eliminating accusations of ringfencing, the BVI enacted the BVIBCA in 2004, effectively bringing all of its company registration regimes under the same modern statutory framework, including transitional provisions to enable companies registered under the old regimes to satisfy the new requirements over a period of time.

The Financial Services Commission will be orchestrating a territory-wide series of public workshops in July to educate local company owners and other key stakeholders with regard to the new company regime and its implications.