Strategy and Finance in the British Virgin Islands

Executive Global: What is it that makes the British Virgin Islands such an attractive location for single and multi-family offices?

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BVI Finance: The British Virgin Islands (BVI) offers a highly attractive location for single and multi-family offices due to a combination of factors. These include a robust legal framework, political stability, tax neutrality, high-quality professional advisors well-versed in the skillsets required for trust and succession planning, and wealth preservation across generations. These factors make the BVI a conducive environment for effectively managing family wealth.

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EG: How has your commitment to high international standards on transparency and regulation facilitated an environment that instils confidence in clients engaged in global investment and trade?

BVIF: Our commitment to high international standards on transparency and regulation has undoubtedly fostered a climate of trust for clients engaged in global investment and trade. The BVI has adopted international standards of anti-money laundering (AML), countering the financing of terrorism, and tax transparency. This adherence to global best practices ensures our clients can confidently operate, knowing their investments are secure and compliant with international norms.

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EG: In your experience with succession planning, why is the BVI now regarded as one of the premier jurisdictions for trusts?

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BVIF: Regarding succession planning, the BVI is a premier trust jurisdiction due to its modern and progressive trust law. The BVI’s legislation is flexible and provides innovative provisions such as the ”reserved powers”, allowing settlors to retain certain control over the trust assets. Additionally, the BVI has a dedicated Commercial Court, which quickly and efficiently resolves trust disputes, further enhancing its appeal.
 

A key part of the BVI’s attractiveness is the Virgin Islands Special Trust Act (VISTA). VISTA allows a trust to be established where the trustee’s usual ”prudent man of business” duty to intervene in the affairs of underlying companies does not apply. This enables BVI companies to be held in trust for extended periods without the trustee interfering in their management, making it highly attractive for family-owned companies.
 

In addition, the BVI is known for its efficient regime for Private Trust Companies (PTCs). PTCs are often used in succession planning as they allow a degree of control over the trust by the family members. It is a vehicle that can act as a trustee of a family trust without being subject to the regulatory oversight that applies to professional trustee companies. This structure provides a layer of privacy, and when combined with a VISTA trust, it allows a family to retain control of a company’s business decisions while ensuring the assets are held securely in trust.
 

These innovative elements of BVI trust law have enhanced the jurisdiction’s appeal for succession planning, offering significant flexibility, control, and stability for families managing their wealth. 

EG: And what additional benefits are granted to clients as a result of having a legal and regulatory framework that is intrinsically linked with English trust legislation?

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BVIF: The BVI’s legal and regulatory framework is closely aligned with English trust legislation, which offers several benefits.  Given the long history and extensive case law associated with English trusts, this includes a high degree of legal certainty. This also aids compatibility with other common law jurisdictions, making cross-border transactions and legal processes smoother.
 

EG: What particularities would make a family office select a BVI Approved Fund for investing, and what are the strategic advantages here?

BVIF: A BVI Approved Fund is an excellent choice for a family office due to its design for private investment, cost-effectiveness, flexibility, and lighter regulatory touch compared to traditional regulated funds. These funds are specifically created to avoid the regulatory burden of establishing larger funds, making them ideal for small, close-knit groups of investors, such as those in a family office.
 

An Approved Fund in the BVI is restricted to a maximum of 20 investors, making it suitable for intimate investor groups, and it must not have net assets exceeding US$100 million. This structure allows for a high degree of flexibility in terms of investment amounts and strategies, catering to various levels of capital and investment goals.
 

Additionally, the BVI Approved Fund provides a fast-track route to market, with a streamlined launch process and limited ongoing regulatory requirements. This can be highly advantageous for a family office, facilitating quicker setup and simpler management, which allows the family to focus on their core investment strategy rather than dealing with regulatory complications.

EG: Tell us how you can assist entrepreneurs with due diligence about company formation and operation and why this is critical.

BVIF: Due diligence for company formation and operation is mandatory in the BVI. This process is critical to ensure compliance with regulatory requirements, understanding potential risks, and facilitating informed decision-making. All companies in the BVI must be incorporated through a Registered Agent licensed by the regulator, the BVI Financial Services Commission. These agents are required by law to carry out due diligence and enhanced due diligence, when required, ensuring a robust check on the companies and their activities.
 

It is important to note that all companies incorporated in the BVI are subject to AML laws in the jurisdiction. All licensed Registered Agents in the BVI are subject to the same rules, without exception. Under these regulations, the Registered Agent must verify the identities and personal data of all individuals they serve. These are not discretionary measures; they are legal regulations enforced by law.
 

All information and documents provided under these provisions will remain confidential, subject to AML laws and regulations. This ensures that while businesses comply with necessary regulatory checks, their confidentiality is maintained, balancing compliance and privacy.

 
EG: What advantages may a BVI corporate structure provide for wealthy yacht and aircraft owners?

BVIF:  A BVI corporate structure can provide significant benefits for wealthy yacht and aircraft owners. These include asset protection, limited liability, tax neutrality, and privacy. Additionally, the BVI’s reputable flag registry, efficient registration process, and strong maritime legal framework make it a preferred choice for yacht and aircraft registration.
 

As a signatory to all International Maritime Organization (IMO) conventions, and with the application of the internationally recognised Large Yacht Code (LYC), the BVI guarantees high safety and environmental standards. Further, vessels registered in the BVI receive the same protection as any other British ship.   EG