A Guide to BVI Investment Funds
The British Virgin Islands (BVI) is the world’s second largest investment funds domicile. The primary legislation in which regulates the investment funds in BVI is the Securities and Investment Business Act, 2010(SIBA).
There are two types of funds, which are open-ended funds and close-ended funds respectively. Investors of the open-ended funds have the right to redeem their fund interests on demand in accordance with the fund documents, while investors of the close-ended funds do not have right to redeem or withdraw their fund interests on demand in accordance with the fund documents.
There are five types of open-ended funds and one closed-ended fund in BVI. The open-ended funds shall be registered with and approved by Financial Services Commission (FSC), while the closed-ended funds shall be recognized by FSC as private investment funds (PIFs).
The definition of each type of open-ended funds is as follows:
|
Restrictions
|
Incubator Fund
|
Approved Fund
|
Private Fund
|
Professional Fund
|
Public Fund
|
|
Maximum Net Assets
|
$20,000,000
|
$100,000,000
|
No limit
|
No limit
|
No limit
|
|
Minimum Investment
|
$20,000
|
No minimum
|
No minimum
|
$100,000
|
No limit
|
|
Maximum No. of Investors
|
20
|
20
|
50
|
No limit
|
No limit
|
|
Life of Fund
|
2 years but can be
extended by one further year
|
unlimited
|
unlimited
|
unlimited
|
unlimited
|
|
The requirements for PIF recognition are similar to those of professional and private BVI funds. As such, a PIF comes in three types :
-
a PIF limited to only 50 investors;
-
a PIF that is limited to marketing investment in the fund on a private basis; and
-
a fund whose investors are limited to professional investors, i.e., persons whose net worth is at least US $1M, and certain institutional investors.
The FSC requires a fund wishing to be recognized, registered or approved to submit an application which must include evidence of the fund’s status together with details of each of the fund’s functionaries (being the investment manager, administrator, custodian and auditor) or appointed persons, as applicable.
KNOWLEDGE
