Opening a Fund in the BVI

Opening a fund in the BVI starts with selecting the type of fund, followed by incorporation and registration with the relevant authorities. Our team that can assist with company formation in the BVI can also provide guidance on how to open a fund in the Virgin Islands.

Who can open a fund in the BVI?

Natural and legal persons (foreign and local) may open a fund in the British Virgin Islands. Special requirements may apply to restrict some types of fund-opening only to professional investors.

How do I set up a fund in the BVI?

A fund in the BVI can be a company, a partnership, a unit trust, or other entity type that has been registered and organized under the laws of the BVI (or another country) that will collect and pool investors’ funds for collective investment purposes.

For the purpose of fund creation structured as a legal entity, our team can assist with company registration in the BVI.

What types of investment funds can I open in the BVI?

Our team outlines the main types of funds below:

• The private investment fund;
• The professional fund;
• The incubator or approved fund;
• The foreign fund;
• The public fund.

What are the ongoing obligations for a BVI fund?

Once the entity that will be used as an investment fund is formed, the following compliance requirements must be considered:

• Having an appointed representative and a fund manager (unless an exemption is granted for the latter). The appointed person is the one in charge of the management and the valuation of the fund property and its safekeeping. This person must be licensed accordingly;
• Having an administrator and a custodian. Private and professional funds are required to always maintain a fund administrator. The conditions for the fund custodian vary;
• Providing the offering document (if applicable) or the term sheet;
• Issuing the fund valuation policy;
• Meeting the requirements for the relevant persons in the fund, depending on the chosen business form. This also includes maintaining a proper number of directors and notifying any changes in directorship within the prescribed deadline;
• Observing the requirements for anti-money laundering and having an appointed officer tasked with this compliance requirement. This position is not to be vacated for too long, and any removal/appointment of a money laundering reporting officer (MLRO) is duly notified to the authorities;
• Maintaining proper financial statements. For the private investment fund in the BVI, the financial statements must be audited, with their submission required 6 months after the end of the tax year.

How fast can I open an investment fund in the BVI?

Investors should expect approximately 5 business days for the processing time required for the licensing of a private investment fund and, in most cases, professional funds.

The infographic below summarizes the process:

How can I open a private investment fund in the BVI?

A private investment fund differentiates itself from other types of funds not through its incorporation process (for which the incorporation of a company, partnership, unit trust, etc. is still required), but rather through its qualifications:

• -It has no more than 50 investors;
• -It must make an invitation to subscribe for or purchase its fund interest (otherwise than on a private basis);
• -Its issuing fund interests are a sum less than the one prescribed in the Private Investment Fund Regulations. Our team can give you more details about these, including the requirement to have these conditions specified in the fund’s constitutional documents.

An investor opening a private investment fund in the BVI must provide sufficient proof that they are a professional investor.

How do I determine if I am a professional investor for BVI fund creation?

A professional investor is an individual who:

• -Has an individual or joint (with their spouse) net worth of more than USD 1 million (or the equivalent thereof in another currency);
• -Has their ordinary business of managing their own or another’s property or substantial part thereof;
• -Consents to being treated as a professional investor in the British Virgin Islands.

How do I license a fund in the BVI?

This process is handled with the Financial and Securities Commission via a license application. This is renewed accordingly each year, based on a fee payment and on continuing to meet the compliance requirements for the respective type of fund.

What are some of the costs associated with opening a fund in the BVI?

The Financial Services Commission imposes several fees when it comes to private investment funds. We list some of these below; however, investors should keep in mind that these are not the only fees associated with fund creation and they can be subject to change:

• The application fee for registering the fund can be $850;
• The annual fee is usually $1,200;
• The fee to extend the statement submission term is $500.

Our team can help you set up a fund in the BVI. Contact our BVI company formation agents for more information on how we assist foreign investors.