British Virgin Islands
VISTA Trust
Trusts established in the British Virgin Islands under the Virgin Islands Special Trusts Act 2003 (Amended 2013) are specifically designed to hold shares of a corporation incorporated in BVI.
The owner establishes a trust consisting of the shares of his company under which can be held indefinitely. The trustee’s supervision and intervention obligations under the general law are eliminated and discharged of all management responsibility in the company, which can be carried out by the directors without interference in the affairs of the company by the trustee.
The trustee has a statutory duty to retain the designated shares, which are the object of the VISTA trust and any duty to preserve or improve the value of the trust fund will be subordinated to this obligation.
However, its powers are limited to dispose of the actions in the circumstances expressed by the terms of the trust deed, not being able to intervene in the management of the company except to solve specific problems and only in a prescribed number of circumstances that must be stated expressly in the deed.
The deed specifies the rules of the “Office of the Director” that establishes how the trustee must exercise his voting powers regarding the appointment, removal, and remuneration of the directors.
Although the VISTA regime is strictly limited to a trustee who holds shares only in a company incorporated into BVI, the underlying company may retain ownership of any other type of assets.
VISTA trusts are allowed to have more than one trustee, but at least one of them must be a designated trustee which is defined by the Act as a trustee licensed to carry out trust business in the BVI under the Banks and Trust Companies Act, 1990.
VISTA reduces the level of risk faced by the trustee who will be more inclined to hold high-risk assets and enter into speculative transactions as their obligation to monitor and manage the trust funds or intervene in highly complex financial transactions and any liability for any resultant losses for its failure to do so is removed by the VISTA Act.
The VISTA Act removes the trustee’s obligation from the prudent investor and the trustee has no obligation to oversee the management of the underlying company.
Legal
Country code – VG
Legal basis – Common law
Legal framework – The Virgin Islands Special Trusts Act 2003 (Amended 2013)
Formal name – VISTA Trust
Requirements - The trust assets must be shares in a BVI company, which must be transferred into the name of the trustee.
Settlor – The settlor is the person, individual or corporate body, who establishes and whose assets are put into the trust. The settlor of Trust in the British Virgin Islands may also be the beneficiary of those assets and may retain control of the trust. There is no protection from a subsequent settlor’s bankruptcy after assets are gifted to the trust
Trustee – VISTA trusts are permitted to have more than one trustee, but at least one of them must be a “designated trustee” which is defined by the Act as a trustee which must be able to carry on trust business in the BVI under the Banks and Trust Companies Act, 1990.
The VISTA regime is strictly confined to a trustee holding shares only in a BVI incorporated company (i.e. no other asset can be held directly by the VISTA trustee). However, there is nothing preventing the ownership of other assets by the trust (e.g. cash, property, equities, etc.) which can be held by the underlying BVI company (as opposed to directly by the trustee).
VISTA reduces the level of risk faced by the trustee who will be more inclined to hold high-risk assets and enter into speculative transactions as its obligation to monitor and manage the trust fund investments or intervene in highly complex financial transactions (and any liability for any resultant losses for its failure to do so) is removed by the Act
The VISTA trust removes the trustee's obligation from the prudent investor rule and the trustee has no obligation to oversee the management of the underlying company.
Beneficiaries – Beneficiaries are those who get benefit from the trust.
There are specific provisions to prevent beneficiaries from draining the trust of its assets and spending in a thrifty way. BVI Vista Trusts allows avoiding both probate and forced heirship rules.
Protector – The trust deed may provide for the appointment of a protector. A protector is often appointed pursuant to the terms of the trust and has such duties and functions as prescribed by the trust.
Disclosure - A licensed trust company is subject to the strict confidentiality laws of The British Virgin Islands and must respect the confidentiality of the trust.
Protection from foreign judgments – The law does not include limited provisions regarding ignoring and not enforcing foreign judgments. The Hague Convention on Trusts applies in the British Virgin Islands.
Protection from creditors – The VISTA Trust and the Trustee act do not repeal the Statute of Elizabeth, so transfers by the settlor to the trust may be set aside if the settlor transferred the property before the debt arose. The creditor must prove the fraudulent transfer of assets to the trust, of which its definition is not clear in the law. Creditor claims may be brought jointly. If a fraudulent transfer is proven, trust may be declared invalid. There is no statue of limitations on a fraudulent transfers.
Protection for immigrant trusts – Trusts that migrate from other jurisdictions do not benefit from retroactive protection.
Exclusion of foreign law – There are limited exclusions in the legislation to exclude foreign law.
Choice of law – The choice of law of the British Virgin Islands to govern the trust or a particular aspect of that trust, is valid, effective and conclusive regardless of any other circumstances.
Duration - A VISTA Trust is unlimited in duration.
Compliance – There is no mandatory requirement to register any trust including a VISTA trust with the regulatory authorities in the BVI and, in fact, all trust deeds are exempt from registration. Therefore, the details of a BVI trust will ordinarily remain confidential subject only to disclosure as may be required by an order of the BVI court.
- Settlor as a beneficiary
- Bankruptcy protection
- Ignore foreign judgements
- Hague convention on trusts
- Choice of law is binding
- Protection from immigrant trusts
- Community property provisions
- Custodian trustee permitted
- Rule against perpetuities (years)
- Limited Specific exclusion of foreign law
- Yes Settlor can retain control
Protection of Settlor
Protection from foreign judgements
- Avoidance of forced heirship
- Spendthrift provisions
- Exclusion of Statute of Elizabeth laws
- Trust invalid if transfer fraudulent
- Creditor must prove fraudulent transfer
- Clear definition of fraudulent transfers
- Separation of creditor claims
- Statutory limitation on fraudulent transfer
Protection of Beneficiary
Transfers
Taxes
A trust established in the British Virgin Islands may not be subject to local taxes applicable to the assets and income of the trust.
It must be noted that the choice of law of the trust would not be applicable to tax matters, which would be governed by the respective jurisdiction where the settlor, beneficiaries, assets or trustee are located, as applicable.
You should consult with your tax advisor or accountant to know the tax implications in your jurisdiction of residence when establishing a trust in the BVI, transfer assets to it and receive profits from said assets.
- Offshore Income Tax Exemption
- Offshore capital gains tax exemption
- Offshore dividends tax exemption
- CFC Rules
- Thin Capitalisation Rules
- Patent Box
- Tax Incentives & Credits
- Property Tax
- Wealth tax
- Estate inheritance tax
- Transfer tax
- Capital duties
- - Offshore Income Tax Rate
- - Corporate Tax Rate
- 0% Capital Gains Tax Rate
- 0% Dividends Received
- 0% Dividends Withholding Tax Rate
- 0% Interests Withholding Tax Rate
- 0% Royalties Withholding Tax Rate
- 0 Losses carryback (years)
- 0 Losses carryforward (years)
- 3.75% Social Security Employee
- 3.75% Social Security Employer
- 0% Personal Income Tax Rate
- 0% VAT Rate
- 0 Tax Treaties
Country details
The British Virgin Islands (BVI), officially the Virgin Islands, are a British overseas territory located on the Francis Drake Channel, east of Puerto Rico, in waters of the Caribbean Sea. The islands are part of the archipelago of the Virgin Islands, the other islands being part of the United States Virgin Islands and the Spanish Virgin Islands belonging to Puerto Rico.
The archipelago is made up of about forty islands, of which eleven are inhabited. The largest are Tortola, Virgin Gorda, Anegada and Jost Van Dyke. Its population is 27 800 inhabitants, living 23 000 on the island of Tortola, where it is located Road Town, the capital.
The executive power of the British Virgin Islands is shared between the monarch of the United Kingdom who is represented by a governor. This governor is appointed directly by the King on the advice of the British Government. Defense and foreign affairs are under the responsibility of the United Kingdom.
The BVI is one of the most prosperous economies among the Caribbean states, with one of the highest GDP per capita worldwide. Political stable, with modern infrastructures and a pro-business environment. Its main sectors are offshore financial services and tourism. Due to its close relationship with the US Virgin Islands, the US Dollar is the official currency.
The British Virgin Islands is one of the world's largest offshore financial centers and a world's leading center for company incorporation. The sector accounts on over half of the jurisdiction’s GDP and incorporation fees account for more than half of Government revenue.
The other significant economic sector is tourism, which approximately contributes to nearly half of the national income and employs a great part of its population.
The islands are a popular destination for its numerous white sandy beaches, the Baths of the Virgin Gorda, scuba diving on coral reefs near Anegada, the well-known bars on the Jost Van Dyke, or chartered yachts for exploring the less accessible islands.
Services
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