British Virgin Islands *
Trust
The British Virgin Islands (BVI) is a widely recognised jurisdiction for the establishment of common law trusts. It offers a robust and flexible legal framework, supported by a stable judiciary and modern trust legislation. BVI trusts are used for a variety of purposes including succession planning, asset protection, wealth management, charitable giving, and commercial structuring.
Trusts in the BVI are governed principally by the Trustee Act 1961, as amended, and relevant parts of English common law and equity. The legal framework provides for the creation of both express private trusts and charitable trusts. The jurisdiction supports discretionary trusts, fixed interest trusts, purpose trusts (including non-charitable purpose trusts), and trusts with complex dispositive arrangements.
A BVI trust is created when a settlor transfers legal ownership of assets to a trustee, who holds those assets for the benefit of designated beneficiaries or for a specific purpose. Trusts may be established during the settlor’s lifetime (inter vivos) or upon death through a will (testamentary). The trust deed—or in some cases, a declaration of trust—sets out the terms of the trust, including powers of the trustee, rights of the beneficiaries, and administrative provisions.
BVI trusts do not require registration or public disclosure. There is no requirement to file trust deeds or details of the settlor, beneficiaries, or trust assets with any government authority, ensuring a high level of confidentiality. However, trustees must maintain accurate and current records, including the trust deed and information sufficient to identify the settlor, beneficiaries, protector (if any), and the nature of the trust property.
The Perpetuities (Amendment) Act 2011 abolished the rule against perpetuities for new trusts, allowing for the creation of perpetual or indefinite duration trusts. This legislative development has enhanced the BVI’s attractiveness for long-term wealth preservation and dynastic succession planning.
Trustees in the BVI are bound by fiduciary duties and are required to act in the best interests of the beneficiaries. These duties include the obligation to act prudently, avoid conflicts of interest, preserve and enhance the value of trust assets, and exercise reasonable care and skill. Trustees may be individuals or corporate entities and are often professional fiduciaries licensed under the Banks and Trust Companies Act 1990.
The trust deed may grant trustees wide discretionary powers, including the ability to invest, distribute income and capital, and appoint or remove beneficiaries. These powers can be tailored to suit the intentions of the settlor and may be supplemented by the appointment of a protector—a third party who can be granted powers to oversee trustee decisions, replace trustees, or veto certain actions.
Trustees must also comply with BVI anti-money laundering (AML) and counter-terrorism financing (CTF) laws. Although trust structures themselves are not subject to direct tax in the BVI, trustees are required to maintain accounting records and may be subject to reporting obligations under international standards such as the Common Reporting Standard (CRS) or the U.S. Foreign Account Tax Compliance Act (FATCA), depending on the circumstances of the trust.
Private Trust Companies (PTCs) serve as an alternative to appointing a professional trustee, allowing settlors and their families to maintain greater control over trust administration. A PTC is a BVI company established solely for the purpose of acting as trustee of one or more related trusts. It is commonly used in family office structures and for high-net-worth individuals who wish to preserve confidentiality and internal oversight.
Under the Financial Services (Exemptions) Regulations 2007, a PTC may be exempt from obtaining a trust licence, provided that it only acts as trustee of trusts for a single family and does not solicit business from the public. The PTC must include in its memorandum of association a restriction limiting its trust activities to exempt trust business, and it must engage a registered agent in the BVI to maintain proper corporate records and facilitate compliance.
PTCs offer several advantages: they enable bespoke governance structures through the board of directors, they facilitate continuity across generations, and they can simplify the administration of multiple trusts. The use of a PTC can also mitigate trustee liability, as decision-making authority is vested in directors who may include family members or trusted advisors, thereby reducing reliance on external fiduciaries.
The BVI recognises non-charitable purpose trusts under the Virgin Islands Special Trusts Act 2003 and Section 84A of the Trustee Act. These trusts are not established for the benefit of individuals but for specific lawful purposes that must be clearly defined in the trust instrument. A key requirement is the appointment of an “enforcer”—a person or entity tasked with ensuring the trustee carries out the specified purposes.
Purpose trusts are frequently used in commercial transactions, asset securitisation structures, philanthropic vehicles, and holding entities for private assets where no beneficial ownership is intended. Unlike traditional charitable trusts, which are confined to purposes benefiting the public (such as relief of poverty or advancement of education), non-charitable purpose trusts can serve a broader range of objectives, including private and corporate functions.
Charitable trusts, meanwhile, enjoy legal recognition and certain regulatory exemptions. They must conform to the classic common law definition of charity and are often used in legacy planning or for establishing philanthropic initiatives.
BVI trusts are widely used for asset protection purposes. When properly structured, they can shield assets from future creditors, provided that the trust is not established with the intent to defraud existing creditors. The jurisdiction has implemented the Fraudulent Dispositions Act 1991, which limits the ability of creditors to challenge trust structures unless they can prove actual intent to defraud and bring a claim within a two-year limitation period.
The BVI also maintains a high level of confidentiality for trust-related matters. While trustees are required to maintain due diligence information and report under applicable international tax cooperation frameworks, there is no public registry for trusts. This discretion is important for settlors and beneficiaries seeking privacy in their financial affairs.
Trusts established in the British Virgin Islands offer a highly flexible and confidential legal arrangement for the holding and management of assets. Excluding the specific provisions of the VISTA regime, BVI trust law remains firmly rooted in traditional common law principles, enriched by modern statutory developments that allow for long-term planning and diverse structuring options.
Whether employed for family succession, charitable initiatives, asset protection, or commercial purposes, BVI trusts provide a durable and adaptable tool. The availability of private trust companies further enhances structuring flexibility, enabling families to balance control, privacy, and fiduciary governance according to their individual needs. Combined with the jurisdiction’s political stability, efficient regulatory environment, and tax neutrality, BVI continues to be a leading choice for the establishment of international trusts.
Legal *
Country code – VG
Legal Basis – Common law
Legal framework – Trustee Act 1961 (as amended)
Formal name –Trust
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 – Individuals, as well as companies licensed as trust companies under the Banks and Trust Companies Act, or established as private trust companies under the Regulations, may act as trustees of a BVI trust.
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 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 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, the trust may be declared invalid. There is no statute of limitations on 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 – Trusts are subject to a maximum perpetuity period up to 360 years.
Compliance – There is no mandatory requirement to register any 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.