Today, the BVI are especially attracting those who are interested in registering a fund for cryptocurrency activities.
The key advantage of this jurisdiction is a loyal and well-developed legislative base and tax freedom.
About the BVI
BVIs occupy the 60th place in the list of the worldꞌs largest financial centers.
The BVI economy is one of the most stable and prosperous in the Caribbean, largely depends on tourism: the archipelago is popular and consists of 4 main and many small islands.
The main income source for the local tourism industry is yacht chartering.
If you want to set up a fund in BVI, you should know that the economy of islands is closely related to the US Virgin Islands economy.
Since the mid-1980ꞌs, the government has offered postal service enterprises to be based on the islands (currently, fees for setting up such companies account for more than a half of government revenue).
About 450 000 postal companies were registered in 2012 on the islands. By 2015, there were already 800 000 companies.
Fund types on BVI
If you are planning to register a fund in BVI, you should remember that the regulation of investment companies activities and fund management in the jurisdiction is carried out by FSC.
In accordance with BVI legislation, there are 5 possible types of funds:
How to register an investment fund in BVI?
Those who are intended to set up an investment fund in BVI, should refer to the FSC. Also it will be necessary to approve significant stages of the fund restructuring there.
Next, you need to order a license. It is worth noting that an investment BVI fund cannot function without a license or permission. After obtaining an FSC license, the licensee must ensure a sufficient stable financial level of the company.
To obtain a license for investment activity in the British Virgin Islands, it is necessary to resolve the issue with the appointment of the following officers:
- Top fund managers;
- An auditor;
- Minimum two managers (one of them should be an individual);
- An authorized intermediary (between the FSC and the licensee);
- AML Policy Compliance Officer.
The licensee obligations also include:
- KYC customer identification;
- Professional insurance compensations;
- Submission of financial statements.
How to set up a BVI retail fund?
If the informational activity of a marketer is aiming at encouraging potential non-resident participants to invest in a fund, then you are dealing with a retail fund. Attracting local people to investment processes is prohibited.
It should be noted that mutual funds, business companies and international limited liability partnerships prefer to register a retail fund in the BVI.
Consequently, SIBA imposes the following obligations on those who are interested in setting up a retail fund in the Virgin Islands:
- Legal form: public foundation;
- Approval of the prospectus of securities in the FSC;
- Minimum 2 directors (individuals);
- The FSC approval of this public fund;
- The appointment of an administrator, manager, auditor, authorized staff intermediary between the licensee and the FSC;
- Mandatory reporting.
There is no income tax and capital gains tax in the BVI. Also there is no salary deductions in the case of the absence of full-time participants in the BVI.
Funds management features (retail funds)
You can register a retail fund in BVI as an LLC.
The information about directors must be entered into the register of company members, which is sent for ten-year storage along with the company's registered securities, all current notifications, minutes of board meetings, as well as company transactions over the past 5 years.
To set up a fund in British Virgin Islands, which is not involved in retail trade, you can use the legal form of an international Limited Liability Partnership as a basis. In other words, you have an opportunity to register a fund in the BVI as a business company and enter it into the register of companies.
The only contribution required from nonprofit funds is annual fees.
The other features of nonprofit funds:
- Such funds are predominantly closed-type and are not in line with the above legislative requirements for securities transactions. These funds are subject to legislative prescriptions similar to those related to legal forms, on the models of which they were created;
- There are no requirements for licensing or obtaining permits for non-profit foundations. There is also no need for reporting;
- You have an opportunity to change the legal address of a foreign company in BVI (redomiciliation);
- Internal investments in funds are not subject to any regulation.
For more information, please refer to YB Case team, using the contacts listed on the site.