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Offshore Trusts Report: British Virgin Islands

Supervisory and Licensing Regime and Fees

Specifically, the BVI reacted to the November, 2000 KPMG Independent Review of Financial Sectors in the Caribbean Overseas Territories. The three main recommendations of the KPMG report which apply to the BVI were the establishment of an independent regulatory authority, the enhancement of laws and systems for combating money laundering and the enactment of compulsory investigative powers to enable regulators to obtain and to share vital information with overseas regulators.

Companies offering trust services must be licensed under the Banks and Trust Companies Act 1990, and supervised by the Inspector of Banks, Trusts and Company Managers. Trust licenses are as follows:

  • A General Trust License permits services to be offered generally; the minimium paid-up capital is (at the time of writing) $250,000 and a deposit of not more than $100,000 must be made as prescribed by the Governor; the annual license fee is $10,000;

  • A Restricted Trust License restricts the provision of services to those undertakings specified in the license. There are no minimum capital or deposit requirements; the annual license fee is $300.

Amendments to the licensing legislation in 1995 under the Banks and Trust Companies (Amendment) Act, 1995 incorporated 'gateways' which provide for the disclosure of information to the regulatory authorities and law enforcement agencies in other countries to assist the investigation of illegal or criminal activities. The BVI authorities however do not respond to 'fishing expedition' enquiries from other jurisdictions. A 2010 amendment strengthened the Act's compliance provisions, while also streamlining the legislation.

In common with many other offshore jurisdictions, the British Virgin Islands responded to pressure from the OECD and FATF by tightening up its regulatory regime. The Government's Financial Services Department, acting through its consultative committees (the Mutual Funds Advisory Committee, the Financial Services Legislation Advisory Committee and the Harmful Tax Competition Task Force) collaborated with the BVI Society of Trust & Estate Practitioners, the Association of Registered Agents and the BVI Bar Association to discuss the necessary changes to the regulatory structure to comply with best practice.

As a result, on 1st January, 2002, the BVI Government established an independent Financial Services Commission. The formation of the FSC saw a division of the marketing and regulatory functions within the BVI offshore financial services centre.

In practical terms the FSC meant maintenance of the clear regulatory standards set out in previous legislation such as the Anti-Money Laundering Code of Practice (2000) and the Financial Services (International Co-operation) Act 2000. The FSC's Banking and Fiduciary Division ensures that all banks and corporate service providers operating in and from the BVI comply with international regulatory standards, established best business practices and relevant BVI laws.

Addressing the First House of Assembly on September 9, British Virgin Islands Premier, Ralph O’Neal announced that, in line with the jurisdiction’s commitment to acting as a responsible financial services centre, he would travel to the Netherlands to sign the islands’ thirteenth tax information exchange agreement on Friday, September 11.

The agreement marks a significant milestone for the territory, O’Neal noted, observing that it illustrates the jurisdiction's continued commitment to ensuring transparency in the operation of the financial services sector and to the principles of good governance, despite surpassing the twelve TIEA quota set by the G20 on April 2.

O’Neal noted that on August 13 the British Virgin Islands gained OECD ‘white list’ status following the conclusion of its twelfth TIEA with New Zealand, placing the territory on the list of jurisdictions deemed to have substantially implemented the internationally-agreed standard on transparency and information exchange.

“On that occasion I gave assurances that we will not stop there but rather, we will continue to pursue negotiations with a view to signing similar agreements with other countries. While we will primarily pursue these agreements with those countries which are members of the OECD, we are also willing to enter into similar agreements with other countries with which we conduct international business,” O’Neal revealed.

   

The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

New Zealand

New Zealand: Legal Framework and Formation Rules and Fees
New Zealand: Review of the Law of Trusts
New Zealand: Taxation of Trusts

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees

 


British Virgin Islands News

BVI To Review Taxes And Fees Monday 15/3/2010 British Virgin Islands Prime Minister, Ralph O’Neal has said that the territory will run a budget surplus during 2010, although the government still intends to review indirect taxes and fees on financial services.

Caribbean Explores Fiscal Cooperation Tuesday 9/3/2010 Ahead of the World Bank meeting, to be held on March 11-12, where CARICOM Finance Ministers will meet to discuss challenges that the region faces, CARICOM Secretary General, Edwin Carrington said it was vital for Caribbean economies to increase economic cooperation and remove fiscal barriers, for the prosperity of the region going forward.

China Clarifies Tax Treatment Of Corporate Income Earned Abroad Wednesday 27/1/2010 The Chinese Ministry of Finance, acting through the State Administration of Taxation, has issued a Circular to clarify corporate income tax provisions with regard to income earned abroad.

OECD Reports On Its Progress With International Tax Standards Wednesday 20/1/2010 According to the Organization for Economic Cooperation and Development, the focus of the Global Forum on Transparency and Exchange of Information is now shifting – from commitments and agreements to achieving an effective implementation of the standards.

UK's Wealthy Head For Sunnier Climes As Tax Storm Brews Wednesday 16/12/2009 New research would appear to confirm that, while not quite the 'exodus' popularly characterized in the press, there is nevertheless a steady stream of wealthy financiers, entrepreneurs and bankers leaving Britain as a result of the Labour government's recent tax increases.

BVI Signs TIEAs With China And Ireland Wednesday 9/12/2009 The government of the British Virgin Islands took a further step on December 7 to conclude Organization for Economic Cooperation and Development model Tax Information Exchange Agreements, signing texts with Ireland and China.

OECS States Agree Upon Draft Outline For New Treaty Wednesday 25/11/2009 The new Treaty of the Organisation of Eastern Caribbean States will be signed in the St. Kitts capital, Basseterre on December 29.

Crown Dependencies Welcome Foot Report Findings Monday 2/11/2009 The British Crown Dependencies have welcomed the findings of the UK government's review of the dependencies, published on October 29, which recognizes their economic benefit to the United Kingdom, and efforts to achieve compliance with international standards.

BVI Makes OECD White List Monday 17/8/2009 The British Virgin Islands has signed its 12th Tax Information Exchange Agreement after concluding an agreement with New Zealand, meaning that the jurisdiction is now considered to be "substantially" in compliance with the Organization of Economic Cooperation and Development's tax snoopers' standard.

BVI Signs OECD Model Agreements With Nordic States Wednesday 20/5/2009 The British Virgin Islands government announced this week the signing of bilateral tax information exchange agreements with the six Nordic countries, the Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden at the Icelandic Embassy in Copenhagen, Denmark, on May 18.