BVI Trust Legislation
British Virgin Islands (“BVI”) trust law is generally based on English law, but has developed beyond English law to allow trusts constituted under BVI law to contain modern trust provisions. The governing law of BVI trusts is the Trustee Ordinance Act 1961 (“the Trustee Act), which has been amended in 1993, 2003, 2013, 2015, and 2021. Additionally, BVI enacted in 2003 the Virgin Islands Special Trusts Act 2003, amended in 2013, to create a special trust known as (“VISTA”), which is used purely for holding shares of a BVI company, and enables the trustee holding such shares to distance himself entirely from the management of the company in which the shares are held.
Who are the main parties of a Trust
The main parties of a BVI trust are the Settlor, Trustee, the Beneficiaries, and the Protector.
Who may be a Trustee of a Trust regulated under the laws of the British Virgin Islands
BVI law does not require that a BVI resident be the trustee of a BVI trust. However, to engage in trust business in or from BVI, the trustee must be licensed. Trust business is defined as acting as a professional trustee, protector or administrator, or managing or administering any settlement or company management as defined in the Company Management Act. A person cannot be settlor, sole trustee, and beneficiary of a BVI trust. A person may be the settlor, act as co- trustee and be the beneficiary of a BVI trust.
Taxation of trusts regulated under the laws of the British Virgin Islands
Trusts constituted under the laws of the British Virgin Islands do not need to be registered in the BVI registrar. They are exempt from registration under the Registration and Records act. Trustees of BVI trusts do not have reporting or filing requirements regarding trusts.
Accounting records for BVI Trusts
The trustee has the obligation to maintain records and underlying documentation of the Trust whether within or outside BVI and retain these records for a period of at least five (5) years. The records and underlying documentation include accounts and records, such as invoices, contracts or other similar documentation, in relation to:
Reserved Powers of the Settlor
A Settlor, Protector, Nominator, or Committee may reserve the following powers under a BVI Trust:
For more information on BVI Trusts, contact us at [email protected].