British Virgin Islands: The Tightrope Walker Of The Offshore World

It’s been six years since the law was passed, and four years since such order was formally informed.  

Despite rumours and press campaigns, we can affirm – with pleasure – that the British Virgin Islands (the BVI) have managed to postpone the creation of a Register of Ultimate Beneficial Owners, accessible to the public in general, yet remaining sanction-free as regards international bodies.  

Spoiler alert: that will remain unchanged.

In contrast to what you may read about in the media, or to the information that your financial advisors and/or partnership providers in other offshore jurisdictions – not specifically trained in wealth planning issues – may provide you with, in the BVI there is not, and there won’t be, any publicly accessible beneficial owner register.  

So, what is happening in the BVI, and what will be the effects on those holding partnerships in that jurisdiction?

Since my last reference to this subject here was over one year ago, and since certain changes effectively entered into force in 2025, it is worth the while to go over this topic once again.

Some Background

Back in 2016, the United Kingdom established its own Public Register of Beneficial Owners as a result of pressures exerted by the European Union, of which the UK was still part, prior to the ‘Brexit’ of 31 January  2020.

The information in such register could be unrestrictedly accessed by practically anyone, without any requirements to prove legitimate interest in or relation with the partnership in question and/or its shareholders. Access was free to creditors, journalists, and even eager individuals. Only exceptions that could entail serious life threats or the risk of violence enabled the possibility of concealing specific data.

Based on that decision, the UK started putting pressure – as usual – on British Crown Dependencies (Jersey, Guernsey, and Isle of Man), as well as on its Overseas Territories (like the BVI and the Cayman Islands), urging them to adopt similar measures.

In 2018, the Parliament of the United Kingdom passed a law demanding the Government to define – before the year 2020 – an ‘Order in Council’ project meant to compel the Overseas Territories to create public registers of the actual property of companies. And that is exactly the order we referred to above in this article.

Section 51 of the UK's Sanctions and Anti-Money Laundering Act 2018 mandated British Overseas Territories to establish publicly accessible registers by 31 December 2020.

In December 2020, the British Government made its Order in Council public, whereby it set a deadline for the end of 2023. It was at that point that criticism of that type of register arose or grew stronger.

Several Overseas Territories expressed their disapproval, stating that abiding by such requirements before the definition of global standards would be a disadvantage. For instance, the governmental authorities of BVI and the Cayman Islands pointed out that the measures proved even more rigorous than the rules imposed in other jurisdictions that were not considered Overseas Territories.

Meanwhile, in the European Union, the arguments regarding the lawfulness of registers of beneficial owners focused on seeking a balance in transparency to battle the financing of terrorism and money laundering, while protecting the privacy of owners, in the understanding that most partnerships are based on law-abiding purposes, as are the cases of estate planning, tax optimisation, wealth preservation and corporate governance.

What was the outcome of such debate?

The final resolution – dated 22 November 2022 – turned out to be favourable. In its judgment referring to joint cases WM (C-37/20) and Sovim SA (C-601/20) vs. Luxembourg Business Registers, the Court of Justice of the European Union declared the requirement introduced by Directive 2018/843 – establishing the obligation for all member States to allow the public unrestricted access to data on the actual ownership of partnerships – as null and void.

The Court considered the indiscriminate public access as neither proportionate, nor strictly necessary to prevent money laundering or the financing of terrorism, and it deemed it a serious and unjustified interference with certain fundamental rights (more specifically the right to respect for private life and to the protection of personal data, as acclaimed in Articles 7 and 8 of the Charter of Fundamental Rights of the European Union).  

Based on this judgment, access to the Register of Ultimate Beneficial Owners was then blocked, and later restricted to specific categories of individuals.

In the European Union, the Government of Spain was the first to approve the creation of a Register of Ultimate Beneficial Owners following the Court’s decree. As expected, Royal Decree number 609/2023 – dated 11 July 2023 – included significant restrictions regarding access to information.

The Tightrope Walker

Getting back to the specific case of the BVI, before the latest reforms, the jurisdiction already had a system to allow authorities – though not private individuals, regardless of whether their interest was legitimate – to determine, in a matter of hours, the identity of shareholders and owners of partnerships incorporated therein. That was the innovative Beneficial Ownership Secure Search System (BOSS), implemented in the year 2017.

The BOSS is not a Register of Ultimate Beneficial Owners, but rather a non-public platform used to share information relative to actual beneficiaries with the United Kingdom and some BVI government agencies.  

Until the introduction of the latest reforms, in my opinion, the BOSS was still one of the best systems in terms of the balance between transparency and privacy it provided, and it did not call for any modifications. Nevertheless, the interest of countries with high taxes finally prevailed, and the BVI had no choice but to go one step further.  

Although the change was unnecessary, at least from my perspective, it was implemented in a careful and strategic manner, which came as no surprise considering the fact that, through time, the BVI has proven to be a jurisdiction that, upon the need to adapt to lower levels of privacy, has done so after extensive consultation with the private sector and outperforming competitors.  

That was exactly what occurred following the cancellation of bearer shares, which had to be deposited with the registered agents upon the creation of the BOSS, and the approval of a mandatory filing at the Register of Directors, as part of the laws passed in relation to economic substance, and when partnerships were compelled to draw very simplified financial statements to be submitted to the registered agents and not to the Government or the Partnerships Register.

I personally disagree with these changes for several reasons. However, a fact to admit is that they were defined to balance the unfair international pressures on the interest of hundreds of thousands of users who continue to opt for this jurisdiction.

As opposed to other jurisdictions that have ended up out of the market, because they relinquished too much, or because they did not relinquish enough, BVI was able to stay firm, and has shown a unique capability to adapt without compromising its position within the offshore world.

Changes As Of 2025

What changes will the BVI implement concerning information about the ultimate beneficial owners of partnerships? The key aspects are basically the following:

• Submittal of information relative to Ultimate Beneficial Owners: the platform to submit information on beneficial owners for every partnership incorporated in the British Virgin Islands will be managed by the BVI Financial Services Commission, replacing the registered agents who carry out that activity at present.
• Restricted access to Register: the authorities with permission to access the register will be the same authorities that already had access to the BOSS, such as the Financial Investigation Agency, the Financial Services Commission, the International Tax Authority, and the Office of the Attorney General, in addition to the international authorities from jurisdictions with which a treaty is in place.
• Protection from public access: despite pressures from both the United Kingdom and the European Union, no private party, journalist, or entity – either with a legitimate interest or not – may access the information. Indiscriminate searches (‘fishing expeditions’) will not be allowed either, and all requirements must be duly justified. Additionally, registered agents may not access data of partnerships managed by other agents.

To avoid confusion and any degree of paranoia, it is important to point out that:

• The obligation to submit information regarding ultimate beneficial owners does not apply to investment funds or other non-regulated entities.
• The obligation does not apply to partnerships with shares listed in the stock market.
• For cases of foreign authorities, they will only be able to access information on shareholders entitled to 25 per cent of the rights to vote and/or the shareholder equity, even when the definition of UBO applies a 10 per cent threshold.
• The information is not entered in any automatic exchange system (FATCA, CRS, etc.).
• It is not possible to carry out searches in general, because requests for information must be specific.

In sum, this is one of those situations where “everything is changing so that nothing changes.” Or, maybe, so that just a little will change.

The Way Forward

Is there anything positive in these changes introduced by the jurisdiction? Absolutely not. As I often say, the best Register of Beneficial Owners is one that does not exist.

Is the implementation positive? Yes, it is. And, hopefully, from now on, the pressure exerted by the OECD, the G-20, and the European Union, will be aimed in other directions or towards other new victims. Obviously, the ideal scenario would be for all pressures to cease, but we are aware that this will not be the case.

Is it likely that BVI will allow access to this type of information by private parties in the future? BVI has seemed persuadable to study such a possibility, provided that the access in question becomes a global standard, and only in cases of an actual relevant interest. When this is finally approved, the definition of ‘relevant interest’ should be as restrictive as possible, with those wanting to access the information necessarily justifying their need in a process that must allow the UBO to involve the necessary number of instances to oppose the request for information. In that regard, the BVI government is presently carrying out a survey among various stakeholders from the private sector. We have already taken part in that survey, both as ‘Untitled SLC’ and as ‘The 1841 Foundation’, and will keep you informed regarding any changes that might take place.

Thus, it is our understanding that, for the time being, those who have incorporated partnerships in the BVI may be reassured to continue to use them in a safe manner, for that jurisdiction is still one of the best worldwide. Its modern, flexible, and globally renowned company law enables hundreds of thousands of families and individuals to attain their planning objectives, and carry out problem-free operations with the world’s most prestigious banks and financial entities.  

Martín A. Litwak
Lawyer specialised in wealth structuring and investment funds. Martín has focused on providing advice to high net worth (HNW), ultra-high net worth (UHNW) and institutional families domiciled in Latin America. His expertise in setting up and/or managing fiduciary structures designed to tackle issues related to the lack of rule of law, the lack of privacy and the fiscal voracity of the countries in which they reside and/or conduct their business activities, as well as his experience in resolving succession issues and/or to ensure that the family assets are well protected makes him one of the foremost lawyers in this field. He has also assisted several Latin American based fund managers with the establishment and licensing of hundreds of investment funds, the majority of them in the British Virgin Islands and the Cayman Islands. Finally, Martín has been very active in multi-jurisdictional mergers and acquisitions, international financial transactions of several types (i.e. private equity/venture capital deals, project financing, structured finance, IPOs, etc.), tax amnesties and the provision of advice in transactions involving crypto-assets and Blockchain (ICOs, STOs, etc.)