The IBC (Amendment) Act 2003

In June 2000, industry participators for the first time were informed about future changes in legislation and particularly about government's intention to amend the IBC Act to restrict the mobility of bearer shares. The new legislation was meant to make offshore companies more transparent and to defend them from international pressure and critics from the side of OECD and FATF. Thus, in the BVI immobilization of bearer shares was preferred to their abolishment, as another preventive measure chosen, for example, in Bahamas, as it is considered an effective way to keep bearer shares while ensuring that the beneficial owners of an entity are known.

In April,2003, the Legislative Council of the BVI passed the International Business Companies Act, 2003, which was signed by the Acting Governor on the 5th of May.

It should be noted that the term “bearer shares” was not previously defined in the IBC Act. The definition of a bearer share is given in the IBC (Amendment) Act 2003, meaning a share represented by a certificate which states that the bearer of the certificate is the owner of the share.

The main principle of the IBC Act 2003 is that the companies are allowed to issue bearer shares, but they must be kept by an Authorised or Recognised custodian.

For IBCs incorporated before 1 January 2005, it is stated that:

• bearer shares issued before 1 January 2005 do not have to comply with the new regime until 1 January 2011.
• bearer shares issued on or after 1 January must immediately comply with the new regime and be placed with an Authorised or Recognised custodian.

For IBCs incorporated on or after 1 January 2005, any bearer shares which are issued will have to be placed with a custodian immediately upon issue.