Most Read Contributor in British Virgin Islands, February 2017
The Virgin Islands Special Trusts Act
(VISTA) came into force on 1 March 2004.
Trusts established under the Act, known as 'VISTA trusts'
are unique to the British Virgin Islands.
The VISTA regime was introduced as a solution to what is
commonly referred to as 'the prudent investor problem'.
The prudent investor problem
Trustees are required to act in the best interest of the
beneficiaries. In doing so, a trustee is required to act prudently,
and to invest the trust assets with the diligence and prudence that
a reasonable person would be expected to exercise in making an
investment of his own money.
BVI trusts are routinely used to hold the shares in a BVI
company which is itself the holding vehicle of a family business.
The family business may be involved in activities which would be
considered too risky for a prudent investor. As such, a trustee may
find himself under a legal duty to intervene in the management
decision of the directors, or even diversify out of the family
business. The duty of prudence imposed on trustees will be
irreconcilable with a settlor who believes that risk taking is an
integral part of business practice. There may also be wider
considerations than pure investment return. For example, when a
trust holds a family business, issues such as family tradition, as
well as ethical and environmental considerations may also be
The VISTA legislation modifies the trustee's duty to monitor
and intervene in relation to the management of the underlying BVI
company. The trustee will retain a statutory right to information
about the company's affairs, but otherwise, the management of
the company will be the responsibility of the directors.
The key conditions of a VISTA trust are that:
The trust can only hold shares in a BVI company (or
At least one of the trustees must be a BVI licensed trust
corporation or a BVI Private Trust Company
(PTC) (please click here for more
information on PTCs).
The trustee cannot be a director of the underlying BVI
If the VISTA criteria are satisfied, then the trustee not only
does not have a duty to monitor or interfere with the management of
the company, but is in fact prohibited from doing so (except in
extreme circumstances known as 'intervention calls').
Further, there is a restriction on the trustee's ability to
sell the BVI company shares, which must be retained
The default position of VISTA trusts is that the trustee has no
fiduciary responsibility in respect of the BVI company (unless
acting on an intervention call), but it is possible to introduce
specific duties on the trustee in respect of the shares. This
allows for the creation of bespoke trust vehicles to address any
type of structuring situation.
The VISTA regime can be applied and dis-applied to trust,
providing significant flexibility. BVI trusts which are not VISTA
trusts can be converted into VISTA trusts, assuming that they
satisfy the relevant conditions (eg hold BVI company shares
Office of Director Rules (ODRs)
The VISTA provisions also contain detailed rules by which the
appointment, removal and remuneration of the directors of a BVI
company held in a VISTA trust can be controlled by the settlor or
another. Through the use of suitably drafted ODRs, a settlor can
retain the ability to appoint and remove directors of the BVI
company, free from interference from the trustee.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Confidentiality of corporate documents and information is one of
the key attractions of incorporating a company in the BVI. A
company search of the BVI Registrar of Corporate Affairs will only
disclose certain information and documents.
A trust is a legal relationship created when a person (the settlor) places assets under the control of another person (the trustee) for the benefit of specified persons (the beneficiaries) or for specified purposes.
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