How to restore an offshore company as illustrated by the cases of the BVI, Seychelles and Belize. Service offer

The restoration of a foreign company is required if the registrar has struck the company off the register for its failure to pay the annual renewal fee by the stipulated deadline.

*The fees are valid at February 2025. The fees depend on which registered agent administers the company and what package of services will be needed when the company is restored. The penalty varies depending on how long the payment is overdue.

Restoration of an offshore company is a process by which a company returns to good standing in the register of companies. This means that the registrar acknowledges that the company is active, has fulfilled its obligations to pay the annual government fees and provided the necessary proof of being active.

The annual government fee is a levy that is commonly referred to as the Annual Renewal Fee or Annual Licence Fee. The legislation of most offshore jurisdictions provides for a grace period during which a company may pay the government fee with a penalty; strike-off is a last resort measure in maintaining a company active.

Thus, in the case of late payment of the annual government fee, a British Virgin Islands company will incur a 10% penalty on the government fee amount during the first 2 months of delay, and a 50% penalty after the 2 months. A company gets struck off when the delay in renewing the company in the register exceeds 5 months.

For a Seychelles company, late payment of the annual government fee will result in a 10% penalty in the first 3 months of delay and a 50% penalty if the delay exceeds 3 months. A company will be struck off on 31 December of the current year or the following year depending on which half-year the company was registered in.

Belize companies incur a fine only once – if the renewal in the register is more than 7 months overdue, after which a company is struck off at the end of the year.

It is not uncommon for the offshore company’s owner who no longer has use for it to stop paying fees for maintaining the company in good standing, which sooner or later leads to the strike-off. However, in doing so, the owner may be overlooking a number of circumstances that can later make it necessary to restore the offshore company. Let’s list the most common cases of a ‘forced’ restoration of offshore companies.

First of all, it is a situation where it is necessary to transact the money in the company’s bank account. For example, the beneficial owner opened an account for a company and deposited funds into it, but left the money lying there for years and then simply abandoned the company. When he or she decides to withdraw the funds from the account, the bank will ask to see proof that the company is still active – so getting the company restored will be the main condition for continuing the communication with the bank.

Another equally common case is when an offshore company is making a corporate law transaction in other jurisdictions, for example, sells its shares in another company.

Let’s say a company was registered to establish a Dutch B.V. and after the B.V.’s establishment was not maintained in good standing by the owner who saw no need for that. It is only when the owner wants the company to withdraw from the B.V. as member, does he or she become aware that the signing of a share purchase agreement before a Dutch notary requires showing proof that the selling company is renewed and up to date in the register. Otherwise, the company cannot confirm that it has the power to go into the transaction.

Whether an offshore company should be restored or not is quite simple to find out by calculating when the late renewal penalties will be imposed and a possible subsequent strike-off will happen. To do this, it is sufficient to know the company’s incorporation date and when the company was renewed last.

For example, a British Virgin Islands company incorporated on 15 July 2018 will be due for renewal in the register by 30 November 2019 (as will all BVI companies incorporated from July to December in the previous year). Failure to renew by that date will result in a late renewal penalty accruing until 30 April 2020; then the company will be struck off on 1 May 2020 and will need to be restored thereafter.

In the case of a Seychelles company incorporated on 15 July 2018, its first renewal date will be 15 July 2019. This company will have it until 31 December 2020 to renew with a penalty, after which it will be struck off and up for restoration, should the need arise.

A Belize company, regardless of the incorporation date, can be renewed penalty-free between 1 January and 31 July of the following year. The company is struck off on 1 January of the following year and from then on can only return to good standing through restoration.

Each offshore jurisdiction has its own time limit within which a company can be restored. This period begins on the company’s strike-off date.

In the BVI, it is 7 years; in Seychelles – 7 years; and in Belize – 5 years.

It should be noted that in the past 2-3 years, the legislation of these offshore jurisdictions has changed to increase the company restoration period.

That period used to be 5 years for BVI companies, 5 years for Seychelles companies, and 3 years for Belize companies.

An offshore company can only be restored by a registered agent licensed to provide company administration services.

The general rule is that the agent who administered the company at the time of its strike-off is the one who is authorised to restore it.

However, there may be exceptions in certain jurisdictions. Thus, in the BVI, a company can be restored by a third-party agent who will simultaneously take the company under its administration.

A request to restore a company can be made to the registered agent by several categories of persons:

1. the professional intermediary through whom the company is administered;
2. the company’s beneficial owner;
3. another professional intermediary authorised and instructed by the beneficial owner;
4. a third party that has an interest in having the company restored.

In the latter two cases, the requesting party will need to provide the registered agent with documentary proof of their authorisation to apply for the restoration of an offshore company.

For a third-party professional intermediary, such proof will be a letter of instruction signed by the company’s beneficial owner and authorising this service provider to represent the beneficial owner before the agent.

A third party will need to provide a documented argumentation for its interest in restoring the company.

Restoring an offshore company involves paying two kinds of government fees.

First, a restoration fee. Its amount is normally determined by how long a company remained struck off. The legislation of the offshore jurisdictions considered here – BVI, Seychelles and Belize – similarly establishes two types of restoration fees:

(a) for companies struck off less than six months ago, and

(b) for companies struck off more than six months ago.

Second, in addition to the above fee, when restoring an offshore company, it is necessary to pay the government fee for all outstanding renewal periods. And that government fee will include late payment penalties for overdue renewals.

The overall company restoration usually takes around 1-2 weeks. The ‘technical part’ of the procedure, which consists of restoring a company to the register, is done in one working day.

Most of the time is taken up by preliminary review of documents, identification of the applicant (if necessary), settlements with the agent, signing of the requested forms and due diligence conducted by both the agent and the professional intermediary.

Although restoring an offshore company is a fairly simple task, certain difficulties may arise along the way. Most often they are caused by the changes in the agent’s compliance policies that took place while the company was struck off.

For example, when updating the company profile before the restoration, the agent finds out that the company’s proposed activities do not comply with current anti-money laundering (AML) legislation. In such a case, the agent is likely to refuse to continue to administer the company or recommend that it be transferred out.

Another not uncommon scenario is the death of the beneficial owner of an offshore company. In the cases requiring the beneficial owner’s involvement in the restoration (for example, when approaching the registered agent through a new professional intermediary), the procedure cannot possibly be initiated until the certificate of inheritance and confirmation of the beneficial rights of the heir are in place.

This will not only substantially prolong the company restoration process as such, but will also potentially lead to new penalties for the period while the restoration is suspended.

Loss of contact with the professional intermediary who helped to register and renew an offshore company does not prevent one from reaching out to another provider of similar services for the restoration of the company.

As mentioned above, a third-party professional intermediary may make a request for the restoration of the company to the registered agent, providing a letter of instruction from the beneficial owner in support of the request.

Upon checking the instruction, the registered agent will change the authorised person for the company and proceed to discuss the restoration procedure.

When an offshore company is restored, the register no longer shows that it was previously struck off. The restored company appears to have always continued in good standing. Therefore, there is no document to confirm the restoration as such.

The registrar only issues documents confirming that a company is active, namely:

1. Certificate of Good Standing, stating that the company is on the register, has paid all government fees and penalties, has not gone into voluntary liquidation, etc.;
2. Company’s Search – an electronic extract from the register of companies, which, after the restoration, will show the company’s active status.

The restoration procedure discussed here cannot be used to restore an offshore company if the statutory period for restoration has expired. Upon expiry of this period, the company is deemed dissolved and is removed from the register; whether or not it can be restored will be decided by court.

Restoration of an offshore company by a third party (creditor) is an extremely rare case, yet we had one in our practice. It is interesting that the registered agent that we worked with encountered such a case for the first time. Moreover, judging by the registrar’s responses to our questions on the subject, we can assume this was not something they came across previously either

The case in hand involved a Seychelles company. We were approached by a third party representing a creditor of a company that had been struck off more than two years before for non-payment of annual government fees. The creditor sought to restore the company in order to subsequently claim the debt.

To enable the application for restoration of the company to be filed with the registrar, the authorised registered agent asked the previous agent to take the struck-off company under its administration for the purpose of restoring it. The registrar then restored the company to the register based on the consent given by the previous registered agent and following the payment of all outstanding government fees and penalties.

The total time of such restoration can be up to six months. The determining step to the success of the application was, of course, the consent of the previous registered agent to the transfer of the company to another agent. Otherwise, the application for restoration would have had to be filed with the court, significant increasing both the time and the cost of the procedure.