BVI Update To The Economic Substance Rules

Introduction

The Economic Substance (Companies and Limited Partnerships) Act, as amended (the "ESA"), requires BVI legal entities which engage in relevant activities to maintain economic substance in the BVI. Our 'Overview of the British Virgin Islands Economic Substance Requirements' can be found here: The British Virgin Islands International Tax Authority ("ITA") is the designated competent authority with power to make rules under the ESA on how these economic substance requirements may be met. The ITA issued such rules (the "ES Rules") on 9 October 2019, and these were updated on 10 February 2020. The ITA further updated the ES Rules on 24 February 2023, and this most recent update provides additional guidance on the application of the ESA, and addresses the amendments made to the ESA following the Economic Substance (Companies and Limited Partnerships) (Amendment) Act, 2021.