BVI TRUSTS FEATURES & BENEFITS

The concept of a trust originated in the Middle Ages in England and has over time been developed as a useful financial planning tool with many applications and advantages. This includes tax planning, family wealth management, the protection and preservation of assets, or for estate succession purposes, to avoid the expense and delay of obtaining a grant from the court to administer the estate of a deceased.

The BVI, as a British Overseas Territory, has implemented innovative and comprehensive trust legislation, which has many benefits.

• Stable jurisdiction with modern trust legislation
• Quality legal system
• Robust regulatory framework
• Minimal reporting requirements
• Confidentiality

The Virgin Islands Special Trust (VISTA) and the Private Trust Company (PTC) complement the standard discretionary trust and enhance the BVI’s position as a leading jurisdiction for trust settlement and operations.

VISTA TRUSTS

VISTA is a unique trust established in the BVI which specifically holds shares in a BVI company. It removes the obligation of the trustee to intervene in the conduct of the affairs of the trust’s underlying companies. The management can instead be carried out by the company’s directors without interference from the trustee. Trustees are therefore able to hold shares in the company indefinitely without fiduciary responsibility for the management or success of the company.

PRIVATE TRUST COMPANIES

PTCs are ideal for holding and consolidating family wealth and enable settlors or settlors’ family members to exercise a significant degree of control over the company’s assets by being directors of PTCs. PTC legislation allows BVI companies that provide trustee and protector services to be exempted from licensing.PTCs offer an alternative to the services of a licensed, professional, institutional trust company to serve as trustee of their trust or trusts and provides advantages not found with an institutional trust company, such as:

• allowing family members to have say in the management of the trust assets;
• maintaining a level of confidentiality as to family affairs;
• allowing greater freedom to diversify investments, e.g. investments that may be risk adverse that the institutional trust company would be unwilling to hold;
• greater flexibility and speed at which decisions are made for the trust;
• no physical presence in the BVI required

SERVICES Required

Forming a trust is a complex process that requires frequent interaction between the client, their advisors, the client’s lawyers, and a Trust company

HTJ provides comprehensive drafting services for all trust-related documents.

The formation fee is based on the trust using standard documents. If a client wishes to use their own trust document, they must obtain approval from external legal counsel in the British Virgin Islands at their own cost. The formation fee also covers the transfer of assets from one source only. If assets are being transferred from multiple sources, HTJ reserves the right to increase the formation fee.

Regarding the setup, other supplementary fees may apply in the following circumstances, with approximate additional fees.

• The Trustee holds financial assets directly – note this will need to be signed off by compliance  
• Underlying entity not provided by HTJ 
• Multiple or indirectly held entities 
• Revocable Trust 
• Non-HTJ trust deed or significant revisions to HTJ deed 
• Reserved powers to settlor – note, this does not include reserved investment powers 
• Non-financial assets as part of the trust fund

If supplementary fees apply to a client, please obtain an agreement with the appropriate Domiciliation Office before proceeding.

The Formation Fee does not cover 7.5% disbursements, third-party expenses, or any fees related to the formation of any underlying entity.

Please note that a retainer fee must be paid in advance before the drafting and/or acceptance of any trust deeds or other trust establishment documents.

An additional fee will be levied when enhanced due diligence is required for Politically Exposed Persons (PEPs) and/or additional due diligence is necessary for complex

structures and structures with multiple UBOs.

The Trustee Responsibility Fee covers only the provision of a trustee. Active management or distribution of trust fund assets and other administrative matters, including the preparation and review of financial statements, will be charged at our time expenditure rates.

Please note that these standard minimum fees are based on the assumption that the assets under management are below USD 5 million. For amounts above USD 5 million, the fee will be a percentage of the assets under management. 

Please also be aware that a trust is typically a long-term entity, subject to annual revisions and increases as the value of the trust fund assets grows.

The standard minimum fees will be based on the assumption that the Trustee will be holding shares of (or an interest in) an underlying entity incorporated by HTJ, and that the overall net asset value of the trust fund will not exceed USD 5 million. The annual Trustee Fee is also based on using HTJ’s trust documents for the structure.

Any other type of trust arrangement will incur higher supplemental fees to cover liability risk issues.

Supplemental fees are likely to be charged in the following circumstances:

The Trustee manages financial assets directly, which requires approval from compliance. Additional scenarios where this minimum fee applies include:

• Underlying entity not provided by HTJ 
• Multiple or indirectly held entities 
• Revocable Trust 
• Non-HTJ trust deed or significant revisions to an HTJ deed 
• Reserved powers to the settlor, excluding reserved investment 
• Non-financial assets included in the trust fund 

For passive investments, we recommend comparing the investment performance and cost structure of the asset manager with relevant benchmarks on at least a semi-annual basis.

COMPLIANCE WORK

Financial and corporate service providers are mandated to monitor and conduct due diligence reviews of their clients. HTJ ensures compliance with this ongoing monitoring responsibility.

An annual compliance fee is charged to meet the regulatory requirements of the respective country/jurisdictions’ AML regulations, the FATF recommendations 10 and 22, and the Risk-Based Approach Guidance for Trust and Company Service Providers issued by FATF in June 2019.

This fee is determined according to these requirements and may vary. It does not cover due diligence or additional compliance work required if there are changes to the structure or if transactions are conducted outside the original purpose.

The annual compliance fee is applicable from the year of onboarding, and the proposal will indicate the minimum fee applicable.

The fees include services, where applicable, related to HTJ’s obligation to report on behalf of the entity under the mandatory regulations of FATCA, Common Reporting Standard (CRS), Economic Substance Requirements (ESR), Mandatory Disclosure Rules (MDR), and other requirements to provide certain information to tax authorities as imposed on the entity and its professional services provider.

If additional reporting and assistance are required, or if the client or authorities receive bespoke requests, this assistance by the tax compliance team will be charged on a time-spent basis.

Here’s a summary of the important points from the fee information:

1. Charging Basis: Legal and administrative services are billed based on the actual time spent and the qualifications of the staff involved.
2. Fee Indication: The fees provided are minimum estimates and might not cover all costs.
3. Additional Services: These will be billed based on the time spent and invoiced after the work is completed.
4. Yearly Applicability: The fees are valid only for the 2024 calendar year.
5. Annual Fees: Recurring annual fees must be paid in advance.
6. Exclusions: The fees do not cover disbursements, out-of-pocket expenses, or third-party costs.
7. Disbursement Charge: An additional 7.5% will be added to each invoice for administrative and general office expenses.