Somasi Corporate Services

Economic Substance Services

In 2019, the BVI introduced an Economic Substance regime which imposes economic substance and reporting requirements on all BVI companies and limited partnerships, which carry on certain types of business activities referred to as “Relevant Activities”. This regime requires that if an entity is tax resident in the BVI and carries on one or more of the Relevant Activities, that entity must demonstrate that it has sufficient economic substance in the BVI.
The following are the Relevant Activities:
  • holding business (pure equity holding entity)
  • banking business
  • distribution and service center business
  • financing and leasing business
  • fund management business
  • headquarters business
  • insurance business
  • intellectual property business
  • shipping business
Entities which are not involved in any of the Relevant Activities, are not subject to the economic substance requirements. Additionally, entities which are tax resident in a jurisdiction outside of the BVI, are also not subject to the economic substance requirements, provided that their jurisdiction of tax residency is not on the EU’s list of non-cooperative jurisdictions. For those entities that are subject to substance requirements, the extent of economic substance required depends on which of the Relevant Activities an entity conducts and the nature and scale of that Relevant Activity.
Somasi offers various economic substance services to facilitate the fulfillment of BVI economic substance obligations. Services include:

  • Consultation regarding substance requirements
  • Entity classification
  • Application for Trade Licenses
  • Independent office set‐up and office management services
  • Board support services; including directorship service and company secretarial services (scheduling board meetings, hosting board meetings, preparation of Minutes, etc)
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