The Non-Profit Organisation Act, 2012 (the "Act") came into force on 1 January 2013, introducing a registration and compliance regime for non-profit organisations ("NPOs") operating in the British Virgin Islands ("BVI"). The Act does not apply to BVI companies conducting non-profit activities outside of the BVI.
Under the Act, an NPO is an organisation which is solely or primarily engaged in "the promotion of charitable, religious, cultural, educational, social or fraternal purposes, or other activities or programmes for the benefit of the public, or a section of the public", and raises or distributes funds in pursuance of these objectives. While this is mainly intended to cover churches, schools and charities, any organisation operating primarily or solely for the public good in the BVI could come within the definition of an NPO to which the Act applies. Accordingly, legal advice is recommended.
Importantly, existing NPOs have until 31 March 2013 to apply to be registered. New NPOs starting on or after 1 January 2013 will need to be registered before commencing operations in the BVI. Penalties for non-registration of up to six months imprisonment or a fine of up to US$10,000 apply to the organisation and its officers under the Act.
Applications for registration are to be made to a new Registrar of Non-Profit Organisations and will be assessed by a five-member Non-Profit Organisation Registration Board (the "Board"). Appleby has thoroughly reviewed the new registration form and compliance requirements, and can assist with the registration process.
The introduction of the new Act is part of the BVI's ongoing efforts to implement best practice regulatory initiatives to crack down on terrorist financing and money laundering, due to the recognition that terrorist organisations use and exploit NPOs to raise funds. An application to the Board can be rejected if it is considered that the NPO is being used (or is intended to be used) for terrorist financing or money laundering purposes, or would otherwise fail to comply with the Act.
Under the Act, NPOs will be required to maintain financial records, which explain their transactions both within and outside the BVI. In addition, the Act requires that NPOs submit annual financial statements to the Board. Where an NPO's gross annual income exceeds US$250,000 the statements need to be certified by a qualified auditor.
Where an NPO has more than five employees, the organisation must appoint a money laundering reporting officer. The money laundering reporting officer will, among other things, assist in ensuring that the NPO has a compliance manual for the purposes of the BVI's Anti-Money Laundering Code.
The annual registration fee under the Act is US$100, or US$50 if the organisation's gross annual income is less than US$250,000.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
