As per BVI legislation, the following kinds of funds may be established:
To register a fund in the BVI, investors are required to submit an application to the FSC. Obtaining a BVI investment license requires making sure that the following requirements are met:
- unlicensed investment activities are prohibited;
- licensees must confirm their companies’ financial soundness;
- two directors (one individual) must be appointed;
- fund managers must appoint directors & senior officers;
- major changes in a company’s structure are to be endorsed by the FSC;
- professional insurance benefits are to be paid;
- financial records must be properly maintained;
- KYC policy is to be implemented;
- an authorized intermediary between the FSC & a licensee is to be appointed;
- an auditor is to be selected & appointed;
- an AML compliance officer is to be selected & appointed.
BVI: Setting up a Marketing Fund
Setting up a marketing fund in the Virgin Islands requires obtaining a permit from the local regulator. As per BVI legislation, marketing foundations can engage in an activity aimed at providing information; they are also allowed to invite or encourage other individuals to invest in mutual funds. However, they’re prohibited from attracting local residents & providing them with investment-related services.
BVI: Setting Up a Retail Fund
Normally, a retail fund is structured as a mutual fund, commercial company or LP. Opening a retail fund in the BVI requires compliance with these important criteria:
- a fund is to be registered as a public one;
- releasing a prospectus requires getting the FCS’ endorsement;
- no fewer than 2 directors are to be appointed;
- managers & administrators of a fund are to be appointed;
- auditors are to be appointed;
- an authorized intermediary between the FSC & a licensee is to be appointed.
Just like other registered organizations, retail funds are exempt from an income tax. Stakeholders mustn’t pay an income tax & capital gains tax, either. If funds employ no local residents, they mustn’t pay a payroll tax, either.
Investors seeking to open a retail fund in the BVI must ensure that:
- a fund is registered as commercial entities;
- a director registry is kept;
- memos, AoA, stakeholder register, minutes & transactional records are to be maintained.
Opening a non-profit foundation in the BVI requires it to have a structure of a company or LP. Normally, a legal form of closed-ended funds is chosen for non-profit foundations; hence, they can operate beyond the Securities Law. Regulated as per legislation under which they were set up, they require no permission or license for their activities.
Because they’re closed-ended foundations, non-profit funds mustn’t abide by any financial reporting requirements. However, they must ensure compliance with these two requirements: 1) be present in the BVI’s company registry 2) pay an annual fee.
It’s legally permitted & possible to redomicile foreign companies to the BVI. Foreign investments are also allowed, however, there’s certain rules regarding foreign investments in the BVI-created funds. There’s no specific rules for domestic investments.
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