Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

ECONOMIC SUBSTANCE: COMPLIANCE SOLUTIONS ARE AVAILABLE

ECONOMIC SUBSTANCE: COMPLIANCE SOLUTIONS ARE AVAILABLE

For instance both Vistra, a locally based globally expanded company that offers services in the establishment of a broad range of BVI trust and corporate structures and Harneys – one of the first trust service providers in the Territory have already gone ahead of the economic substance fray by simplifying the requirements for their clients with the use of a questionnaire – among other things.

When legislators stood in the House of Assembly last December to debate the Economic Substance legislation there was a fear that this requirement that was imposed by the European Union calling for companies incorporated in the Territory to show a physical presence here might cause an exodus from the financial services sector. While there are positive opportunities that might arise from this substance requirement the discovery that some Singapore companies are trying to lure BVI companies away gives credence to the fear.

The Economic Substance requirement is a response to OECD’s global Base Erosion and Profit Shifting. The Territory complied by passing the Economic Substance (Companies and Limited Partnerships) Act, 2018, which came into force in January this year and the outstanding draft Economic Substance Code (the Code) which was published by the BVI International Tax Authority (ITA) in April.

The crux of the matter is that this economic substance requirement is to be imposed on all BVI registered companies, and on all limited partnerships. These entities are now required to prove economic substance in the BVI for all relevant activities such as banking, insurance etc.

So far, the BVI has been valiantly pushing forward in this economic substance situation by being deemed compliant to date. However, it appears that some entities operating in Singapore are standing by, just in case some companies are unable to comply.

One such company is a firm called Rosemont SGP Pte Ltd based in Singapore. This company has since outlined an option specifically geared at BVI companies that wish to migrate. The company as part of its announcement said: “In Singapore it is possible to consider both the re-domiciliation of foreign entities to Singapore as well as the change of tax residence of a foreign entity to Singapore. Moving the tax residency from one jurisdiction to another is also an option, but needs to take into account the changes being implemented as a result of the OECD BEPs project. Consideration will need to be given to any relevant Double-Taxation Agreements.”

One of the options presented is for “a BVI company to become Singapore tax resident by applying for a resident status in Singapore.”

No Need to Leave - BVI Trust Companies Alleviating Client Worry

While it is still early to tell, it appears as if the fallout out from the economic substance requirement might not be as bad as it was earlier forecasted to be and this is because the financial service industry has risen to the occasion.

For instance both Vistra, a locally based globally expanded company that offers services in the establishment of a broad range of BVI trust and corporate structures and Harneys – one of the first trust service providers in the Territory have already gone ahead of the economic substance fray by simplifying the requirements for their clients with the use of a questionnaire – among other things.

Vistra on 17 July officially launched its Economic Substance Services and Solutions. This initiative – Vistra explained – commences with their specially prepared British Virgin Islands Economic Substance Classification Questionnaire. This questionnaire developed by Vistra’s in-house legal team is designed to help clients determine the classification of their BVI company as it applies to the substance legislation.

The company explained that the BVI Economic Substance Classification Questionnaire is an efficient and effective service for any BVI entity to gain clarity on their status. It was also noted that the questionnaire is supported by detailed analysis and tailored solutions.

Simon Filmer, Global Lead, Company Formation at Vistra, commented, “It is now mandatory for all BVI entities to comply with substance requirements and demonstrate good corporate governance. The first step to achieving these goals is to determine if one’s entity is in-scope or out of scope, and Vistra is ready to help make this classification process as simple, direct and effective as possible for our clients.”

Accordingly, this questionnaire is user-friendly, comprising a short list of questions for clients to fill in. “Based on the questionnaire submitted, Vistra’s subject matter experts will conduct a detailed analysis and produce a comprehensive report outlining obligations and concrete suggestions on next steps to ensure substance compliance. The entire process is quick and streamlined, offering clients the peace of mind required to ensure business as usual,” the company further explained.

It was also noted that Vistra is providing a comprehensive range of substance services for BVI entities, including legal opinions, full portfolio review and advisory services, lodgement with regulators, and in-jurisdiction substance services, where required.

Meanwhile, Harneys announced that it also has prepared a classification questionnaire for its clients to assist them with their economic substance needs. As part of its offer Harneys says it is providing clients with a user friendly interactive and intuitive online questionnaire with real time classification results.”

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
President Trump Diagnosed with Chronic Venous Insufficiency After Leg Swelling
CEO Resigns Amid Controversy Over Relationship with HR Executive
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
Tulsi Gabbard Unveils Evidence Alleging Political Manipulation of Intelligence During Trump Administration
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Trump Announces Coca-Cola to Shift to Cane Sugar in U.S. Production
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Air India Pilot’s Mental Health Records Under Scrutiny
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
Moonshot AI Unveils Kimi K2: A New Open-Source AI Model
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
EU Delays Retaliatory Tariffs Amid New U.S. Threats on Imports
Trump Proposes Supplying Arms to Ukraine Through NATO Allies
US Opens First Rare Earth Mine in Over 70 Years in Wyoming
Bitcoin Reaches New Milestone of $116,000
Severe Heatwave Claims 2,300 Lives Across Europe
Declining Beer Consumption Signals Cultural Shift in Germany
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
×