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BVI Professional Funds
BVI Fund Types In the BVI regulated funds are categorized as either Incubator Funds, Approved Funds, Private Funds, Professional Funds, or Public Funds. Another option also exists in the BVI as not all companies operating as pooled investment vehicles are subject to the Securities and Investment Business (Amendment) Act 2015 (amending the Securities and Investment Business Act 2010 (SIBA). SIBA regulates only open-ended funds (i.e., those whose equity interests are redeemable at the option of the investor). Consequently, closed-ended "funds" (i.e., whose equity interests are not redeemable at the option of the investor) are not subject to specific regulation in the BVI. The redemption feature represents the key distinction between closed-ended companies operating as "funds", Incubator Funds, Approved Funds, Private Funds, Professional Fund and Public Funds. Learn More About Using a BVI Closed-Ended Company as a Hedge Fund
BVI Professional Funds Professional funds interests may only be made available to “professional investors” and the minimum initial investment into a professional fund by each investor must not be less than US$100,000 (or the equivalent in another currency).A “professional investor” is a person whose ordinary business involves dealing in the same kind of property as the fund or who has net worth (individually or with their spouse) in excess of US$ 1,000,000 (which can include real estate). A useful advantage to the Professional Fund is that it may carry on business or manage or administer its affairs for a period of up to 21 days without being recognized by the Financial Services Commission (FSC).Both Private and Professional funds are required to have two directors (at least one of whom must be an individual) and are required to appoint an investment manager, an administrator, a custodian and an auditor. In certain circumstances, exemptions are available from the requirement to have a custodian, investment manager and/or auditor. They must also keep the FSC appraised of the appointment (or removal) of any prime brokers. These funds also filed annual returns with the FSC to report activity through June 30.
BVI Fund Structure Sponsors and fund managers considering a BVI fund may choose to structure the fund as one of the following: a BVI business company, a limited partnership or a unit trust. The majority of BVI investment funds are established as companies limited by shares under the Business Companies Act (2004). Limited partnerships are also a common form of investment fund, while unit trusts are relatively rare. Business companies are usually incorporated with limited liability, with open-ended investment companies issuing redeemable shares. The limited liability company is widely used for hedge funds.
The unit trust is also used in the British Virgin Islands and essentially follows English trust law whereby unit trusts are established under a trust deed giving unit holders undivided beneficial interests in the trust property. Unit trusts are often used, in place of companies, for investors in jurisdictions where participation in a unit trust is more acceptable or attractive.
BVI Professional Fund Advantages Aside from the fact that Professional Funds are subject to minimum investment and investor suitability requirements, the only other distinction between Private Funds and Professional Funds is that a Professional Fund, under SIBA is permitted to operate for 21 days before receiving its license from the Financial Services Commission (FSC), provided that it files its application for recognition within 14 days of commencing business. The best part about the BVI is that your hedge fund's service providers (i.e., investment managers, advisers, brokers, administrator, auditors etc.) maybe located anywhere in the world. There is no local audit or sign off requirement in the BVI. Creating BVI a hedge fund can be done quickly and readily. BVI government fees are low. BVI hedge fund law is very practical and flexible. BVI insolvency law is simple and effective. BVI has a strong and reputable compliance culture, professional infrastructure and reputation. BVI has an English-based legal system and an established judiciary that has pro-business reputation similar to that of Delaware in the United States. The BVI is well known for its established and experienced financial services sector. The BVI is extremely compliant with international anti-money laundering, anti-terrorist financing and other financial regulatory standards. The BVI has a good number of international tax information exchange agreements and OECD White List status.
Our BVI Professional Fund Services Include: • service and legal fees • FSC mutual fund application fee • FSC mutual fund recognition fee • BVI company license fee • authorized BVI mutual fund agent fee (upon appointment and annually thereafter) • registered agent/office (upon incorporation and annually thereafter) • communication/courier/company seal costs • name check • preparation of the company memorandum of association • preparation of the company articles of association • preparation of company registration forms • filing with the BVI registrar of companies • certificate of incorporation • share certificates • minutes of the first board meetings • register of directors • register of members • company seal • re-draft, filing and certifying memorandum & articles of association for the fund formation • preparation of offering documents and fund agreements • preparation of investment fund application for recognition and licensing with BVI FSC • filing the fund application with the BVI FSC • certifying documents for the FSC • payment of first year BVI Registered Agent/Office (annual) • payment of first year Authorized BVI Mutual Fund Agent Fee (annual) • payment of first year BVI Business Company License Fee (annual) • payment of first year FSC Mutual Fund Recognition Fee (annual) • courier service (1 time)
Annual Fees Include: • Authorized BVI mutual fund agent fee • registered agent/office for a mutual fund • BVI business company license fee • FSC mutual fund recognition fee
Why the British Virgin Islands? The British Virgin Islands (BVI) is an attractive and affordable country for hedge funds. The BVI is a zero tax country and has no capital gains or capital transfer taxes, no inheritance tax, and no sales tax or VAT. BVI is committed to remaining fully compliant with international financial regulatory norms and regulations. There are no regulatory restrictions on investment policies or strategies and there is no requirement to appoint local directors, administrators or auditors. It boasts a full range of professional service providers and very low start-up and ongoing fees and costs.The British Virgin Islands (BVI) is one of the best countries in the world to set up a hedge fund and a licensed investment management business. Presently, it offers start up fund managers more fund options than any other country. In the BVI regulated funds are categorized as either Incubator Funds, Approved Funds, Private Funds, Professional Funds, or Public Funds. Another option also exists in the BVI--the Closed-Ended Company
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Call Us First We are experts in international hedge funds and tax. Click on any reference below to our leading articles:
Strategic Hedge Fund Planning by Hannah Terhune. Wilmott Magazine Ltd. (Volume 2013, Issue 63, pages 8-11 January 2013).
Trading Foreign Index Contracts? Know the Tax Rules Before You Trade by Hannah M. Terhune and Roger D. Lorence. Stocks, Futures and Options (June 2005).
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