British Virgin Island (BVI) Trusts
Trust Law
BVI Trusts are formed under the Trust Ordinance 1961 (based on the English Trustee Act 1925), as updated and amended by the Trustee Amendment Act 1993.
Since the 1993 Act, there is no requirement for registration of trusts in the BVI, and there is no public disclosure of information regarding trusts. Trust duty of $50 is payable on each trust instrument, which is achieved by buying and affixing stamps, creating no record.
Due to the Amendment Act, the regime for trusts in the BVI is very flexible. The following are some of the main features of BVI trust law:
- the proper law of a trust can be specified by the trust instrument; in the absence of a specified jurisdiction, a trust will be under BVI legislation if the trustee or the trust administration is situated in the BVI
- trusts can migrate into and out of the BVI; but outwards migration is only possible if the 'receiving' jurisdiction recognizes the validity of the trust
- purpose trusts are permitted in perpetuity and must have at least one BVI trustee (resident professional or equivalent
- the perpetuity period can be set at 100 years, but 'lives in being' is still possible
- 'wait and see' provisions are included as standard
- 'protectors' are explicitly permitted, and their powers are clearly defined
- forced heirship provisions are excluded
- trustees may be given wide discretionary investment powers
- BVI trusts are exempt from all taxation provided that there is no resident beneficiary and no BVI assets
The British Virgin Islands Trust
The Virgin Islands Special Trusts Act 2003 introduced the Vista trust.
In principle, trusts and all subsidiaries and underlying entities must be legally under the control and independent management of the Trustee. These obligations are often in conflict with the wishes of the typical owners of family businesses, who only need share holdings kept in trust. The Vista Trust includes provisions for the retention of shares by the Trustee irrespective of the financial advantages of disposal, even prohibiting the Trustee from intervening in the management of the underlying companies except in certain circumstances. There are certain provisions in the VISTA TRUST for the appointment and removal of directors of underlying companies to the Trust in accordance with the terms of the Trust instrument.
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