British Virgin Islands trust law has been heavily influenced by English common law, the Virgin Islands Special Trusts Act 2003 created a special trust, known as a ‘VISTA trust’ in the British Virgin Islands, which exists as an alternative to a non-charitable purpose trust.

In essence a trust is a legal device, first developed under English law, under which legal ownership of assets is vested in a trustee whilst the enjoyment of the trust fund is preserved for the benefit of the beneficiaries on terms determined by the settlor. These VISTA trust contain a variety of significant features, some of which are highlighted below.

1.       Scope

The VISTA regime does not apply generally to all trusts established in BVI but must be specifically stated in the trust instrument to apply.  

There required at least one of the trustees of a VISTA trust must be a BVI Company licensed under the Banks and Trust Companies Act, or a BVI Private Trust Company. Individuals or non-BVI company may be co-trustees of VISTA trusts.

2.       Confidential

Trusts in the BVI are exempt from registration under the Registration and Records Act and trustees are exempt from any reporting and filing requirements, ensuring a high degree of confidentiality.

3.       Tax Exemption

Trusts will be exempt from all British Virgin Islands taxes provided that no beneficiaries are resident in the Islands and that the trust does not conduct any business or own any land in the jurisdiction.

4.       Preservation of Wealth

Trusts may be used to preserve the continuity of ownership of particular assets, such as a business, within a family. By vesting legal ownership of the assets in the trustee, the relevant individuals may be able to continue to benefit from the assets, whilst avoiding fragmentation of ownership.

 
5.       Succession

The effect of a trust is to divest the settlor of ownership of the settled assets. Accordingly, upon the death of a settlor there will be no need to obtain a grant of probate or similar formalities in order to deal with the trust fund. A trust, therefore, provides an efficient vehicle for the transfer of beneficial ownership interests on the death of a settlor.

The trustee may retain the designated shares indefinitely or only dispose of them with the consent of the directors of the company or other persons named in the trust deed.

6.       Asset Protection

The use of a trust in conjunction with an underlying company can be used to convert an onshore asset into an offshore one and to interpose an additional layer of confidentiality in a chain of ownership.

Trusts may also safeguard assets against strategic risks, such as confiscation or expropriation by the State in the country of the Settlor's domicile, residence or nationality.

7.       Management Responsibility

VISTA can be completely removed or just partially limited the trustee’s duty to monitor and intervene in the conduct of the directors and the management of the trust’s underlying BVI company.

The trustee can be disengaged, notwithstanding that the trust shareholding gives him a controlling interest in the company, from management responsibility in relation the company’s affairs. It therefore allows the company and its business to be retained and run as its directors see fit.