The trust system in the British Virgin Islands
British Virgin Islands trust law is based predominantly on English trust law but has developed beyond English law to permit purpose trusts, extend the perpetuity period to 100 years and most notably to create the unique VISTA trust. The governing law is the Trustee Ordinance Act 1961 (“the Act”) (most recently updated by the Trustee (Amendment) Acts of 2013 and 2015) and is supplemented by the Virgin Islands Special Trusts Act 2003 (the “VISTA legislation”) (most recently updated by the Virgin Islands Special Trusts (Amendment) Act 2013).
Trusts have many applications and advantages, including the protection and preserving of assets, tax planning or just avoiding the expense and delays of obtaining probate under a will. They also provide a high degree of confidentiality. The BVI’s innovative, modern and user-friendly legislation, Virgin Islands Special Trust Act (VISTA) 2003 and Private Trust Company (PTC) legislation have enhanced its position as a jurisdiction for trust settlements and operations. VISTA allows a shareholder to establish a BVI trust over a BVI company, which disengages the trustee from administrative and managerial responsibility in relation to that BVI company. Considerable use is also made of the 2007 regulations to establish PTCs for holding and consolidating family wealth whilst retaining significant control over the trustees’ decisions by being directors of the PTC.
Since the introduction of the VISTA legislation, it has been said by leading practitioners that the British Virgin Islands has the most modern and coherent trust legislation globally. Policies and legislation have been developed in close partnership with the private sector, and as a result respond well to the needs of business and demonstrate a sophisticated and cutting edge approach.
Trusts in the British Virgin Islands are exempt from registration under the Registration and Records Act and trustees are exempt from any reporting and filing requirements, ensuring a high degree of confidentiality. Protection for trusts is ensured by the requirement that companies carrying on trust company business must obtain a licence and conform to various requirements under the Banks and Trust Companies Act 1990.
TBA has a large specialist trust and private client team consisting of three directors, a senior associate, two associates and a trainee. Our specialist team has extensive experience of advising clients in relation to the establishment and structuring of trusts and foundations, estate planning, trust and estate litigation, international tax investigations and TIEA requests.
Further information on these alternative structures is available on request.