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The European Lawyer Investment Funds Guide - British Virgin Islands Chapter

15 September 2013

This article was published in The European Lawyer Investment Funds Guide, September 2013

MARKET OVERVIEW

The British Virgin Islands (BVI) has been a popular jurisdiction of choice in which to incorporate or establish investment funds since the late 1980s and early 1990s when George Soros first established and/or promoted a number of highly publicised funds in the jurisdiction. Since then the territory has developed a solid investment funds industry.

Historically, the BVI was seen as a fairly low cost option, offering extremely flexible corporate laws together with an appropriate level of regulation suitable for the type of business the jurisdiction wanted to attract, namely the open-ended hedge fund business aimed at institutional and professional/high net worth investors. In addition, because of the competitiveness of the fee regime, the jurisdiction has in the past attracted, and continues to attract, a substantial number of start-up managers looking to establish their first funds.

The BVI has also been a popular jurisdiction in which to establish closed-ended funds where, once again, the suitable degree of regulation, flexible corporate laws and competitive professional fees and government applied charges have made it an ideal jurisdiction in which to establish such entities. However, as these types of structures are unregulated and therefore not approved by any regulatory bodies in the BVI, there are no official statistics available to verify how many of these vehicles currently exist.

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