Economic Substance (Companies and Limited Partnerships) (Intellectual Property Business Requirements) Regulations, 2020

Summary

This is a short statutory instrument made under the BVI Economic Substance (Companies and Limited Partnerships) Act, 2018. It clarifies how a high risk intellectual property (IP) legal entity can rebut the statutory presumption that it has not met economic substance requirements for its IP business.

• Scope: Applies to companies and limited partnerships classified as high risk IP legal entities under section 9(2) of the Economic Substance (Companies and Limited Partnerships) Act, 2018.
• Core rule: To rebut the non-compliance presumption, a high risk IP legal entity must satisfy the section 9(4) requirements not only at the time it seeks to rebut the presumption, but also throughout any historic periods during which it carried on the intellectual property business in question.
• Commencement: The Regulations are deemed to have come into force on 1 October 2019, the date section 16 of the Principal Act took effect, giving them retroactive effect.

The Regulations contain no separate filing or reporting mechanics; they operate as an interpretive gloss on the existing economic substance rebuttal test for high risk IP entities.

Key obligations

• A high risk IP legal entity seeking to rebut the non-compliance presumption under section 9(2) of the Economic Substance (Companies and Limited Partnerships) Act, 2018 must show it satisfied the section 9(4) requirements both at the time of rebuttal and throughout all historic periods it carried on the relevant intellectual property business.

Applies to

high risk IP legal entities (companies), high risk IP legal entities (limited partnerships)

Deadlines

• 1st day of October, 2019: Regulations deemed to have come into force on this date, matching commencement of section 16 of the Economic Substance (Companies and Limited Partnerships) Act, 2018.