Harneys economic substance update

Since the introduction of the latest version of the BVI ITA guidance notes (now known as the “Rules”) on 9 October 2019, many BVI entities have now undertaken a formal classification using our online Economic Substance Solution.

Market overview

Our expert team of economic substance lawyers is seeing a lot of queries around:

  • the BVI definition of IP rights including the typical types of IP (eg copyrights, patents, trademarks, brand and technical know-how)
  • how to apply the narrow “pure equity holding entity” definition
  • how to apply the “finance and leasing business” definition
  • clarification around the obligations of entities in liquidation
  • and finally, how legal entities with relevant activities (which are not “non-resident” for tax purposes) and those who should be taking steps to become compliant or reorganise themselves if the ES requirements necessitate it

Phil Graham and Josh Mangeot (our substance gurus) have quickly gained a dedicated following of listeners to their SOS Substance on Substance podcast series which is aimed specifically at answering the above questions and also cutting through the confusion to deliver expert guidance on all things economic substance. To contact our economic substance legal team send an email to BVIeconomicsubstance@harneys.com.

ES classification solution updated

We have dedicated the last couple of weeks to updating our ES classification solution to make it more user-friendly. The solution now refers back to the new ITA Rules and we have added Harneys guidance throughout to help clarify any confusion around whether an entity is in or out of scope. We have added a Frequently Asked Questions section to each page and a new design feature that allows users to expand and collapse text as needed. The solution now also offers clients the opportunity to download template examples of simple directors’ resolutions.

These updates have no effect on the outcome of previous classifications as none of the logic within the solution has changed. However, we have added guidance to the PDF output to include reporting obligations.

Establishing substance in the BVI

For clients that need to establish and demonstrate substance in the BVI, we are perfectly positioned to provide bespoke and integrated legal and administrative substance solutions. We already provide our clients with a full suite of governance, resident director and accounting services, and have extensive experience with assisting our clients to obtain trade licences, work permits, premises, specialist equipment, or dedicated human resources. We are ready to meet additional needs and can offer flexible packages and develop these to meet your specific requirements. For more information on our economic substance solutions and to receive a bespoke proposal, click here.