British Virgin Islands Trusts (BVI)
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.
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 traditional use of trusts is protection and preservation of family assets. The most common purposes for establishing trusts:
- Asset Protection
- Will Substitute and Avoidance of Probate
- Avoidance of Forced Heirship
- Family Succession Planning
- Tax Planning & Avoidance of Estate Duty
- Benefit of Charities & Purpose Objectives
- Confidentiality and Privacy Protection
- Contingency Planning
Trust is a relationship among the three parties: Settlor, Trustee and Beneficiary(ies).
Settlor is the person or corporation who establishes the Trust.
Trustee is the person or corporation appointed by the Settlor holding legal ownership of assets in the Trust for the benefit of the Beneficiaries.
Beneficiaries are the persons, corporations or charities having the beneficial right to enjoy the assets in the Trust.
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