The following describes what the trust in the British Virgin Islands represents, and also what advantages it provides to the trust manager, the founder of the foundation and the beneficiary. We will study together how to create trust in the British Virgin Islands and what requirements must be met in order to establish an offshore trust.
Why create a trust in the BVI? Offshore property and income are not taxed
The information below describes the process of creating and operating a trust in a BVI. The requirements for creating a trust in the BVI are listed, it is stated why the BVI is the ideal jurisdiction for trusts. Finally, the advantages of creating a trust in the BVI are listed.
In the BVI there are many functioning trusts with big capital. It relies heavily on common law trusts legislation, which provides a sound legal framework to regulate the process of creating trusts and foundations in this jurisdiction. Some of the attractive characteristics of BVI trusts include:
– a fixed period of existence (up to 100 years),
– avoidance of the right to an obligatory share in the hereditary mass
– the legislation provides the founder with wide rights for the trustee in terms of attracting investment in the trust
– according to the law on trusts in the BVI, offshore property and income are not taxed
– BVI trusts should include “provisions for trust trusts” in relation to trust assets.
At the BVI, the conditions for economic activity and financial planning are constantly being developed and improved. In 2004, new legislation came into force here, which secured the title of the most attractive place to create trusts for the BVI. These laws include:
– BVI Special Trust Law (VISTA)
– Trustees Act (as amended)
– Property Law (various provisions).
The Law on Trustees supplemented the legislation on trusts in the BVI and improved the regulation of the activities of trusts in this jurisdiction for offshore founders. New, improved provisions open up new opportunities for trust and activity to provide services.
It is quite obvious that since 2007 the BVI has significantly increased the number of offshore trusts created here. In this jurisdiction famous for its professionalism and good reputation, various options for trusts are possible.
What is a trust in BVI?
First, the trust in the BVI provides for the conclusion of an agreement between the founder (transferring his assets / personal fortune to the trust) and the trustee (appointed by the person responsible for managing the trust). The purpose of the trust is to bring benefits to the beneficiary. The trustee must be an adult in his right mind and conscientiously execute a declaration of trust. The founder may also have a guarantor, whose main task is to ensure that the trust’s activities comply with the declaration of trust (trust agreement). The trustee administers the trust on behalf of the founder for the benefit of the beneficiaries appointed by him.
In the BVI, there is no requirement to register a trust with the Financial Services Commission or any other government body. The rules applicable to the declaration of trust are minimal compared to neighboring jurisdictions.
Trusts are mainly used by rich people who have the opportunity to plan their financial affairs and provide for their descendants and future generations. In this regard, an attractive feature of the trust is that potential heirs cannot sue the trust and that the assets of the trust cannot be seized. The rule of compulsory share in the hereditary mass in trusts on the BVI does not apply, which allows the founder to choose to whom and in what amount he wants to distribute his assets. Many people want to protect their assets and become founders of trust. As a founder, you have the right to transfer any assets to the trust and legally declare that you do not own them.
Many people incorrectly believe that creating a trust in the BVI is a costly and time-consuming enterprise. The time required to create a trust depends on the type of trust. Trust in the BVI must pay a fee for creating a trust, which is a small amount that has recently increased from $ 50 to $ 100.
The most commonly used trusts in the BVI
– Private trusts are most popular in the BVI. According to the BVI legislation, the founder of the trust has more opportunities to manage their assets and control the execution of the trust declaration.
– Charitable trusts – are created for environmental protection, poverty reduction and the implementation of fundamental freedoms.
– Target trusts.
BVI Trust Assignment
– Asset Protection Tool
– Planning for family welfare and condition distribution
– Tax planning
– Emergency planning
– Avoiding inheritance rules
Advantages of trusts in the BVI
– BVI Trusts Benefit from No Profit, Income or Dividend Taxation
– Trusts at the BVI do not pay annual state fees
– BVI trusts do not pay capital gains tax
– Stamp duty is no longer charged on pension trusts and trusts containing assets that are outside the limits of the BVI
– there is no minimum capital requirement to create a trust
– effective tax planning, less taxes
– a high degree of asset protection due to the fact that the BVI courts cannot interfere with the activities of trusts in the BVI
– foreigners can own a trust
– a high degree of anonymity, despite the requirement to disclose the names and addresses of the beneficial owners
– avoidance of the rule about the obligatory share in the mass
– avoid proof of authenticity
– lack of currency regulation
– A high degree of asset protection and condition management.