The British Virgin Islands is the second largest offshore jurisdiction for hedge fund formation. With the passing of the Securities and Investment Business Act in 2010 (SIBA), the British Virgin Islands offers a solid legal platform for fund formation, sitting at the forefront of international expectations for effective regulation of funds and entities carrying on investment business. With an English-based legal system and the benefit of a fast track court for commercial disputes, the British Virgin Islands is considered a natural jurisdiction for fund formation at low cost.
Open-ended funds can be created as either companies, partnerships or unit trusts and are required to be recognised or registered by the British Virgin Islands Financial Services Commission as Private Funds, Professional Funds or Public Funds. Closed-end funds are exempt for registration with SIBA.
Benefits of a BVI Hedge Fund:
- Speed and ease of creating British Virgin Islands entities
- Relatively low cost, particularly in the context of government fees
- Flexible and practical business statutes
- British Virgin Islands insolvency law is simple and effective
- Strong and reputable compliance culture
- English-based legal system, established judiciary and absence of political or sovereign concerns
- Professional infrastructure and reputation. The British Virgin Islands is well known for its established and experienced financial services sector and substantial capacity
- Compliance with international anti-money laundering, anti-terrorist financing and other financial regulatory standards
- Significant number of international tax information exchange agreements and OECD ‘white list’ status
- Tax neutral
- Service providers to the fund (investment managers, advisers, brokers, administrator, auditors etc.) may usually be located anywhere in the world
- No local audit or sign off requirement
*Disclaimer: This information provided is purely as a courtesy and convenience. It is not intended to be constituted as legal advice.