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British Virgin Islands Investment Funds

The British Virgin Islands ("BVI") is the second largest offshore jurisdiction for hedge funds globally and a prominent and flourishing jurisdiction for establishing offshore investment funds, generally. The BVI's flexibility in offering alternative regulatory regimes for small to mid-sized hedge fund groups makes it an efficient proposition to establish investment managers and advisers in the BVI. This is one of the many advantages that makes the BVI a leading domicile for offshore hedge funds.

Advantages of BVI Investment Funds

  • High-level of corporate governance and a flexible corporate statute with the BVI Business Companies Act 2004
  • Alternative Investment Fund Managers Directive 2011/61/EU compliance with BVIs opt-in regime
  • Private equity and venture capital managers are welcomed with a 'lighter touch' regulatory regime
  • Targets smaller fund managers with the Approved Manager Regime and the specialised Approved and Incubator Fund products
  • Robust commercial court
  • Competitive incorporation fees

Types of BVI Investment Funds

BVI Incubator Hedge Funds

The BVI Incubator Fund is a start-up fund for those managers who want to keep costs in line until they have a track record to attract sufficient subscriptions to make the funds viable for the long term. The fund may have:

  • a maximum of 20 investors;
  • a minimum initial investment of US$20,000; and
  • net assets of up to US$20 million.

The benefit of an Incubator Fund is that it does not require an offering memorandum, licensed investment manager, administrator, custodian or auditor. Rather, investors must only be provided with a written description of the investment strategy and a written outline of the risks including the risk of investing in an Incubator Fund. The Incubator Fund can only be approved for a two year period.

For managers who have gained investor interest and traction during the two year period, an Incubator Fund may be converted into an Approved Fund, Professional Fund or Private Fund.

BVI Approved Funds

A BVI Approved Fund is a low cost hedge fund vehicle which allows a manager to bring together a small number of investors. This fund is cost-effective and designed to avoid the regulatory burden when establishing a small fund. An approved fund may include:

  • a maximum of 20 investors;
  • no minimum investment; and
  • net assets of up to US$100 million.

Unlike the Incubator Fund, the Approved Fund has no term limit.

BVI Professional Funds

A Professional Fund is a mutual fund whose interests are made available only to professional investors and the initial investment of each investor (other than certain "exempted investors") is not less than US$100,000.

BVI Private Funds

A Private Fund is a mutual fund whose constitutional documents specify either that it will have no more than 50 investors or that the making of an invitation to subscribe is to be made on a "private basis" only.

Funds Formation in the British Virgin Islands

Funds in the BVI may be incorporated as business companies or formed as partnerships or unit trusts.

Segregated Portfolio Companies ("SPC")

Funds can be incorporated as an SPC. With an SPC, any asset linked to a particular portfolio held as a separate fund for that segregated portfolio, will not form part of the general assets of the SPC and will not be available to meet the liabilities of any other segregated portfolio. Once established, a segregated portfolio company constitutes a single legal entity; each segregated portfolio does not. The SPC can issue shares and declare dividends on its own account, as well as with respect to each individual segregated portfolio. As such, the SPC is a particularly useful vehicle for multi-class or umbrella funds which wish to offer different investment strategies to investors.

Unit Trusts

Unit trusts are suitable for a variety of investment structures, including the stand-alone trust and the umbrella trust. When properly structured, a unit trust is exempt from BVI income tax, estate tax, inheritance tax, succession tax, gift tax, or any other duty.

Counsel for BVI Investment Funds

Our lawyers advise on fund formation and structuring in the British Virgin Islands, including constitutional and contractual documentation, incorporation, registered office and administration services, regulation and compliance, as well as restructuring, liquidation, insolvency and winding up of funds.

With offices in the major international financial centres of Hong Kong, London and Singapore, we are more than able to provide you with our responsive legal services. We are also well equipped to service the Middle East North Africa market, with lawyers who have thorough expertise and understanding of the region.

Contact our Investment Funds Team

Piers Alexander
Partner

HONG KONG   +852 2842 9525
Mobile   +852 6469 3375


Charissa Ball
Associate

Hong Kong   +852 2842 9550
Mobile   +852 6469 0270


Robert J.D. Briant
Partner, Head of BVI Corporate

British Virgin Islands, Cayman Islands   +1 284 852 1100


Alexander Doyle
Associate

HONG KONG   +852 2842 9552
Mobile   +852 6469 3345


Eric Flaye
Associate

British Virgin Islands   +1 284 852 1124


Vivien C.S. Fung
Partner

HONG KONG   +852 2842 9500
Mobile   +852 6469 3380


Anton Goldstein
Partner

British Virgin Islands   +1 284 852 1119


Linda Martin
Director, Head of London Office

London   +44(0)20 7562 0353


Janice Oh
Director

Singapore   +65 6603 0703


Christopher J.R. Page
Counsel

Hong Kong   +852 2842 9589
Mobile   +852 6469 3367


Preetha Pillai
Director, Head of Singapore office

Singapore   +65 6603 0707


Hanifa Ramjahn
Counsel

Hong Kong   +852 2842 9586
Mobile   +852 6469 3382


Audrey M. Robertson
Counsel

British Virgin Islands   +1 284 852 1111


Winnie W.S. Wong
Counsel

Hong Kong   +852 2842 9533
Mobile   +852 6469 3372


Accolades
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"In terms of structuring companies and funds, Conyers are well versed with the various aspects of company law in BVI & Cayman."
- Chambers and Partners

RELATED JURISDICTIONS

British Virgin Islands


RELATED INTERNATIONAL MARKETS

Hong Kong
London
MENA
Singapore


Get in touch with us

British Virgin Islands

Head of BVI Corporate
Robert J.D. Briant
+1 284 852 1100 |  Email |  View Profile


Hong Kong

Partner
Piers Alexander
+852 2842 9525 |  Email |  View Profile

London

Head of London Office
Linda Martin
+44(0)20 7562 0353 |  Email |  View Profile

Singapore

Head of Singapore Office
Alan Dickson
+65 6603 0712 |  Email |  View Profile