London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

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.”

Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
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.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
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
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
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
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×