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Our Economic Substance Online Classification Solution provides a cost effective way for British Virgin Islands (BVI) companies and limited partnerships to demonstrate formally that they have considered their position under the economic substance legislation. The automated classification solution provides tailored real-time legal advice, provided by Harneys.
In addition to English, the solution has Simplified Chinese and Spanish language capability. On payment of a flat fee, you will be directed to our solution where you will have the option to choose your preferred language.
Además del inglés, ofrecemos esta solución en chino y en español. En cuanto haya pagado el precio para acceder, será dirigido a nuestra solución donde directamente tendrá la opción de escoger su idioma preferido. Si prescinde de cualquiera ayuda por favor contáctenos por correo electrónico a la siguiente dirección: america.latina@harneys.com.
除英语以外,我们还推出了简体中文和西班牙语的解决方案。您支付了标准费用以后,就会收到提示进入一个页面可以选择您需要的语言。 如果您需要得到进一步的帮助,请联系我们的邮箱: china@harneys.com

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Economic substance refers to new legislation introduced in the BVI which derives from an EU based unfair tax practices initiative that requires certain entities that are incorporated or registered in the BVI, and which conduct one or more of a set list of nine relevant activities, to comply with local requirements and demonstrate adequate ‘economic substance’. The BVI legislation follows closely the approach taken by the Crown Dependencies of the UK (Jersey, Guernsey and the Isle of Man) and the other UK Overseas Territories including the Cayman Islands and Bermuda.

The legislation imposes economic substance requirements on companies incorporated or registered in the BVI and limited partnerships that are formed or registered in the BVI (together, relevant legal entities), which carry on one or more of the following relevant activities:

Investment fund business is not a relevant activity.

The directors or general partners (as appropriate) of all relevant legal entities are under an obligation to ensure they have classified their entity and understood its obligations under the economic substance law. The International Tax Authority in the BVI (the ITA), as the competent authority for this regime, has made it clear that it will expect to see robust documentary evidence of the basis of the entity’s classification on the files held and maintained by the entity’s registered agent. Examples of this would be a formal memo of legal advice on the classification and/or extensive board resolutions which show the analysis having been conducted. To determine if your entity is conducting a relevant activity, Harneys has developed an innovative legal technological product, the Economic Substance Classification Solution.

Harneys’ Economic Substance classification solution provides a cost effective way for BVI entities to demonstrate formally that they have considered their position under the economic substance legislation and determine whether they are conducting a relevant activity. The automated classification solution provides tailored real-time legal advice, signed by Harneys lawyers, for a cost-effective flat fee and is generated instantly after your completion of an interactive questionnaire.

Every BVI entity. They need to show that they have taken reasonable steps to demonstrate that they have considered their position under the economic substance legislation and produce robust evidence of classification.

We strongly advise that entities move to classify themselves as soon as possible. All relevant legal entities are now subject to related obligations (including to identify whether they carry on any relevant activity), save for limited partnerships without legal personality prior to 1 July 2021 for which the first compliance period must commence by 1 January 2022 at the latest.

If you would like to get started on your entity classification please click here.

Certainly, please reach out to our support team here.

Client reviews

The Harneys classification system is best in class and is a thoughtful response to a regulatory change that might otherwise cause a large administrative compliance burden on clients.
- User review
[I] must congratulate you on creating such a comprehensive and user-friendly online solution. I think Harneys should be given an award for this.
- User review
The solution is easy and intuitive to use and neatly distils a complex regulatory regime into targeted and relevant guidance, with useful worked examples.
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