Valsen Fiduciaries Funds

BVI Professional Fund

The BVI Financial Services Commission (FSC) regulates mutual funds under the segregated portfolio companies (mutual funds) (amendment) regulations, 2018. This Act sets out the guidelines pertaining to the application and licensing of mutual funds in the BVI.

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About BVI Professional Fund

The majority of BVI funds are set up as professional funds which are most suitable where it is likely that all investors will be sophisticated investors. The requirements for a fund to be eligible to be classified as a professional fund are that

  • the shares are only made available to “professional investors” and
  • the initial investment of such investors is not less than US$100,000 or its equivalent in any other currency.

A “professional investor” will be a person whose ordinary business involves, whether for its own account or the accounts of others, the acquisition or disposal of property of the same kind as the property, or a substantial part of the property, of the fund or who has signed a declaration that he, whether individually or jointly with his spouse, has net worth in excess of US$1,000,000 or its equivalent in any other currency and that he consents to being treated as a professional investor.

BVI Professional Fund Legal Requirements

Requirements

Description

  1. Applicable legislation

Mutual Funds Act, 2010
  1. Supervising Authority

BVI Financial Services Commission (FSC)

  1. Corporate vehicle permitted

BVI Business Company

Segregated Portfolio Company

Unit Trust in any jurisdiction

Limited Partnership

  1. Share capital or equivalent

  • Minimum subscription

US$100,000
  • Minimum investors

None

  1. Directors / Partners / Trustees

  • Minimum number

2

  • Corporate Directors / Partners / Trustees allowed

Yes

  • Local Directors / Partners / Trustees required

Yes

  1. Fund functionaries required

  1. Custodian

  • Custodian required

Yes

  • Local custodian required

No

  • Eligible custodian

Any other person as the authority may approve who is independent of the manager or administrator

  1. Fund manager / Investment manager

  • Fund manager required

Yes

  • Local fund manager required

No

  • Fund manager requires to be licensed

Yes

  • Eligible fund manager

Any licensed fund manager worldwide

  1. Fund administrator

  • Fund administrator required

Yes

  • Local fund administrator required

No

  • Eligible fund administrator

Any licensed fund manager worldwide

  1. External auditor

  • External auditor required

Yes

  • Local external auditor required

No

  • Eligible external auditor

Foreign or local auditor satisfying conditions as may be prescribed by the Commission.

  1. Asset Requirements

  • Restriction on type of asset class invested

None

  • Asset diversification requirements

None

  • Limitation on size of the fund or total assets under management

None

  1. Local physical office required

No

  1. Prospectus / Offering Memorandum required to be filed

Yes

  1. Eligible for listing

Yes

  1. License fees

  • License application fee

USD 500

  • Annual license fee

USD 500

  1. Estimated license processing duration

3 months

Ongoing Obligations

Requirements Description
Monthly obligations
None
Quarterly obligations
None
Annual obligations
Submit annual audited accounts to FSC within 6 months of the financial year end.
Other obligations
None
Tax Obligations and Other Exemptions
Requirements Description
Business Tax
None. There is no income, capital gains, profit or other forms of direct taxation on corporations, regardless residence status.
Withholding Tax
No withholding tax is payable on dividends and/or interest payable.
Value Added Tax (VAT)
VAT is not applicable to mutual funds in its entirety.
Capital Duty
None
Payroll Tax

Payroll Tax is charged on actual remuneration paid, given or assessed by any employer or self-employed person, to every employee and deemed employee, plus any benefits derived by the employee, deemed employee or self-employed person as a result of his/her employment, whether paid in cash or kind. Payroll tax rates are as follows:

  • The Class 1 employer and the class 1 self-employed person pay at a rate of 10% of the tax base.
  • The Class 2 employer and the class 2 self-employed person pay at a rate of 14% of the tax base. Effective 2007 employment income up to USD 10,000 is tax free.
Real Property Tax
The Property Tax Act establishes an annual tax on real property which is either, or a combination of, land tax and a building or house tax. British Virgin Islanders are liable for land tax at USD 10 for the first acre and at USD 3 for each additional acre. Rates for expatriates are as follows: USD 50 on one half acre or less, USD 150 on more than one half acre but not exceeding one acre and USD 50 on each additional acre or part thereof exceeding one acre.
Social Security

Social security is deducted from all employment income to a maximum of USD 40,714 (insurable earnings) as follows:

  • Private employees: 8.5% of insurable earnings (employers contribution 4% and employee 4.5%);
  • Civil servants: 7.5% of insurable earnings (employers contribution 3.5% and employee 4%);
  • Self-employed persons: 8.5% of insurable earnings;
  • Voluntary contributors: 7% of earnings by the Board.
Stamp duty Act
Instruments to which stamp duty would typically apply include share transfers, charges over and transfers of real estate. The amount of stamp duty payable on a particular instrument will depend on the nature of the instrument.
Trades Tax Act
None
Immovable Property Transfer Restriction Act
None
Immigration Decree
None
Exchange Control Act
There are no foreign exchange control restrictions
Foreign Earnings Act
None

Benefits of a BVI Professional Fund:

  • Ease and speed of establishment
  • Flexible structuring of the entity
  • Favourable compliance restrictions
  • Friendly regulatory environment