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<strong>The</strong> BVI’s hard-nosed flexibility
related securities business, particularly
in Asia and Latin America.
<strong>The</strong> new BVI BC Act has also
had an impact on the <strong>fund</strong>s sector
with one of its principal aims
being to provide increased choice
in the range of corporate vehicles
available, thereby adding the
advantages of establishing an
investment <strong>fund</strong> in the BVI.
It has built on the old IBC Act
by providing managers with more
flexibility, including the ability
to utilise Segregated Portfolio
Companies and no stated par
value shares as standard with no
requirements to account for share
capital.
Other tangible and real improvements
relate to the solvency tests
for distributions and redemptions,
which are now more flexible and
straightforward under the BVI
Business Companies Act.
BVI AND IOSCO
In April this year, the British
Virgin Islands Financial Services
Commission (FSC) was welcomed
as an ordinary member of the
International Organisation of
Securities Commissions (IOSCO).
IOSCO’s membership regulates
more than 90% of the world’s
securities markets in more than
100 jurisdictions.
This was widely seen as recognition
of the British Virgin Islands’
robust international cooperation
framework and its long-standing
commitment to comply fully with
the standards and requirements as
outlined by IOSCO’s Multilateral
Memorandum of Understanding
concerning Consultation and
Cooperation and the Exchange of
Information (IOSCO MMOU).
In fact, the British Virgin
Islands became the first country to
be admitted to ordinary membership
of IOSCO based on changes
made to its legislation, reaffirming
its position as one of the most
effectively regulated offshore
jurisdictions in the world.
A MATTER OF TRUSTS
Private Trust Companies (PTCs)
have become increasingly popular
in OFCs in recent times and the
BVI enacted special provisions for
PTCs earlier this year to further
strengthen its trusts and estate
planning offer.
<strong>The</strong> coming into force of the
Virgin Islands Special Trusts
Act 2003 (VISTA) and the British
Virgin Islands’ Trustee Act 2003
(the Amendment Act), on 1 March
2004 were momentous occasions
for the sector and jurisdiction
alike. Both are highly innovative
and well thought out statutes
dealing with a number of important
areas of trust law in which
reform was long overdue and as
such, the last few years have seen
considerable use made of the new
statutory provisions.
To make it easier for trustees to
deal with third parties, the British
Virgin Islands has also adopted
many of the recommendations of
the English Trust Law Committee,
thus making the British Virgin
Islands the jurisdiction of choice
when setting up trusts to use in
commercial transactions.
More significantly still, the
VISTA Act created an alternative
trust regime which enables special
trusts, known as VISTA trusts, to
be established. Over the last few
years, this VISTA legislation has
generated an immense amount of
positive international interest and
a significant number of VISTA
trusts have already been set up.
Both VISTA and the Trustee
Amendment Acts were based on
proposals which were made to
the British Virgin Islands government
by the British Virgin Islands
branch of the Society of Trust and
Estate Practitioners (STEP).
This demonstrates the close collaboration
between government
and the private sector in terms
of working together to meet the
needs of the jurisdiction’s international
client base.
STEP BVI is now working on
further proposals for trust law
reform, so watch this space!
In addition to this, the Segregated
Portfolio Companies legislation
has undoubtedly attracted
more captive business to the
British Virgin Islands. It provides
an alternative for organisations
with similar businesses and risks
to form joint ventures while segregating
their respective risks,
assets and liabilities.
During 2006, a total of 10 SPCs
were licensed with 50 segregated
portfolios between them.
<strong>The</strong> unrestrictive nature of
the BVI’s business environment
has been another attraction. For
example, the BVI do not insist upon
the appointment of local directors;
annual general meetings do not
need to be held in the jurisdiction;
and it is not obligatory for the captive
to establish on-island bank
accounts. All this has combined to
make the BVI mature enough as a
domicile to have attained credibility
with the regulatory bodies around
the world, yet young enough to
embrace new ideas and solutions.
“<strong>The</strong> BVI International Finance Centre has implemented
a worldwide programme of roadshows to
inform, educate and discuss with the international
professional and business communities the opportunities
for growth in financial services on offer in
the BVI. Through this global programme the story
of the BVI has been taken to many of the leading
<strong>centre</strong>s for international business.”
Sherri Ortiz, BVI IFS
PUBLIC/PRIVATE PARTNERS
Essential and sound legislation
and prudent regulation can only
go so far. It is the on-island professionals
who do the hard work and
provide the necessary expertise on
a day-to-day basis.
<strong>The</strong> British Virgin Islands is
the only Caribbean jurisdiction to
boast the presence of all six of the
largest offshore law firms in the
region. <strong>The</strong> legal profession in the
Territory continues to expand and
strengthen with a steady influx of
lawyers, barristers and solicitors.
<strong>The</strong> world’s top accounting and
auditing practices are also present
in the British Virgin Islands and
have been for quite some time.
<strong>The</strong>ir professional service offerings
include not only the traditional
accounting, audit and risk
management practices. <strong>The</strong>y
include increasingly specialist
areas such as forensic accounting,
corporate restructuring and insolvency
management services, all
offered from within the British
Virgin Islands.
In addition there are, of course,
the many leading international
trust and corporate service providers
who, through their efficient
systems, procedures and people,
have helped build the British
Virgin Islands into the world’s corporate
domicile capital.
All this growth and success
has been supported by the British
Virgin Islands International
Finance Centre (BVI IFC), which
has played a pivotal role in the
promotion and marketing of the
British Virgin Islands as a leading
financial <strong>centre</strong>.
<strong>The</strong> British Virgin Islands International
Finance Centre has implemented
a worldwide programme
of road shows to inform, educate,
and discuss with the international
professional and business communities
the opportunities for growth
in financial services on offer in the
British Virgin Islands.
Through this global programme,
the story of the British
Virgin Islands has been taken to
many of the leading <strong>centre</strong>s for
international business.
<strong>The</strong>se include London, New
York, Hong Kong, Singapore,
Miami, Geneva, Zurich and
Shanghai, keeping the image and
branding of the Territory foremost
in the minds of its stakeholders.
Established in 2002, as part of
the Government’s commitment
to support the financial services
industry in the BVI, the aim of the
International Finance Centre is to
give a voice to all segments of the
finance sector while making sure
the Territory retains the unique
balance of a sound regulatory
framework, an entrepreneurial
business community and innovative
legislation.
As such, the International
Finance Centre’s ultimate objective
is to protect and uphold the
integrity, the reputation and the
standing which the British Virgin
Islands has earned as a worldclass
jurisdiction for the conduct
of international business.
Continuing to spread the positive
and powerful message about
the territory’s competitive advantage
is the central focus of the
British Virgin Islands International
Finance Centre.
S22 | british virgin islands supplement <strong>hedge</strong> <strong>fund</strong>s review | ctober 2007 www.<strong>hedge</strong><strong>fund</strong>sreview.com