BVI Trust Formation

The British Virgin Islands have been the place of focus for businessmen for a very long to do allocation, effective investment and to guarantee safet preservation of assets. The country offers many fiscal instruments for these purposes, where the legislative field is focused on comfortable business of foreign partners.

In addition to traditional offshore instruments, local trusts prevail. First of all, they come as the perfect tool to ensure reliable protection and safety of property assets.

Starting from the date when additional regulations are adopted by the state that govern such structure functioning (primarily this relates to VISTA — special rules), the potential remarkably increased, even when compared with other traditional countries using the Anglo-Saxon legal “foundation”. The British Virgin Islands offer the similar quality, variation and quite an extensive scheme of legal relations, which allows:

  • to create the comfortable multi-level scheme of company control;
  • to protect personal assets of founders against any encroachment by apparent heirs, creditors, etc.
  • to arrange a tool to ensure the needs of owners and their families;

In the British Virgin Islands, in addition to standard trusts, special subspecies operate. In 2003, the VISTA legislative act was adopted previously mentioned that allows creation of special structures with the most limited possibilities of beneficial owners. Assets in such organizations represent shares created in the state of the organization. This tool makes it easy to implement effective, powerful and complex offshore models, while the associated costs of trust maintenance are reduced, especially when compared with standard trusts.

In the legislative field, the institution and the rights of nominee shareholders were in fact and correctly filed as per the law. They are able to register an organization and put aside guardians as per the decision of the Directorate for an unlimited period. This is very convenient, for example, for owners of family business who preserve their rights to free disposal of business and able to subsequently transfer control to selected heirs.

Types and features of structures
Among the laws that regulate the functioning of trust agencies of all types, it is necessary to highlight Property Acts, special VISTA models and trusting owners. Thanks to them, it is possible to significantly vary the types and options agreements and to ensure their optimal functioning. Since 2007, the legislative field of the country has improved and today, the number of trust agencies has increased significantly. Standard trusts run in the country, except for complex and special formats.  They are created by the conventional patter, with beneficiaries, founders and the owner who manage the trust.

Creditors and potential heirs of founders do not have access to assets that were “withdrawn” from possession of the business unit owner, since they represent the contract for full transfer of assets to beneficiary owners. The latter may be a person of full age and full legal capacity, since it is responsible for faithful adherence to objectives previously specified in the statement. The specially appointed guarantor is responsible to control the strict compliance with wishes of creators.

The founder can comfortably choose,  who and in what amount and manner will benefit from these assets. In compliance with laws of the country, they are almost completely withdrawn from ordinary rules of compulsory parts in the hereditary mass (in full compliance with the basic trust principle) and the beneficiary shall be indicated at the request of the company founder. The legislative field in taxation is used in this country that is loyal to  investors. This country will be the best solution for those who want:

  • the effective tax planning
  • charities
  • asset security and protection in case of emergency
  • distribution of inheritance

In addition to special trusts, the most popular are the following:

Target trusts with clear target.
Private trusts with vast potential for creators to dispose of assets and to monitor the statement implementation.
Charity funds are intended for social, humanitarian, cultural and research purposes.

Registration and dignity of local trusts
Such agencies are quickly registered and this is absolutely easy process. The laws do not require registration with the specialized financial and servicing commission or any other similar authority, and indicative types and clauses of the statement are very available. Non-resident of this country may act as the founder and the beneficiary. Standard structures may exist for a limited period of 100 years.

For registration, please:

  1. Pay a fee in the amount of $100 USD.
  2. Assign beneficiaries and trust owners.
  3. Specify main purposes and provisions.
  4. Specify protectors entitled to change the list of beneficiaries, trust managers, jurisdiction that is allowed by the legislative acts of the BVI.

There are a lot of advantages with trusts in the BVI. Above all, they are comfortable for founders who can choose the best level of authority  and trust format. Also, local trusts are attractive for lots of advantages:

  • Higher security of assets and privacy.
  • No foreign exchange control.
  • Extensive opportunities to attract any investments.
  • There is no annual tax or fee on the capital increase, or any requirements for the capital level, either.
  • There are no taxes on income, assets and dividends of the company.

To create the trust, please contact our experts on trust structures.

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