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Trust & Foundation Service - FAQs

1. What about taxes for Trust?

The income of the trust is reported directly on the tax return of the current beneficiaries. Because it is a grantor trust, which is a trust in which the creator (or grantor) keeps some interest in the income and funds inside of the trust. It is not recognized as a separate taxable entity separate from the grantor for tax purposes. It is, thus, “Income Tax Neutral” to the grantor. So, the for tax purposes, it is equivalent to holding the funds in your name. From an asset protection standpoint, however, it is the difference between keeping and not keeping your own money. It can also pass real estate tax deductions and mortgage interest deductions to your personal tax return.

2. Who is a Company Manager?

A General Trust Licence holder is an entity which holds a valid general trust licence as prescribed by the Banks and Trust Companies Act, 1990 and enables the holder to carry on trust business without restrictions. Trust business as defined by this Act means "the business of (a) acting as a professional trustee, protector or administrator of a trust or settlement, (b) managing or administering any trust or settlement, and (c) company management as defined by the Company Management Act, 1990.

3. Who is a General Trust Licence holder?

A General Trust Licence holder is an entity which holds a valid general trust licence as prescribed by the Banks and Trust Companies Act, 1990 and enables the holder to carry on trust business without restrictions. Trust business as defined by this Act means "the business of (a) acting as a professional trustee, protector or administrator of a trust or settlement, (b) managing or administering any trust or settlement, and (c) company management as defined by the Company Management Act, 1990.

4. Who is a Restricted Trust Licence holder?

A Restricted Trust Licence holder is an entity which holds a valid restricted trust licence as prescribed by the Banks and Trust Companies Act, 1990 and allows the holder to carry on trust business with restrictions specifically providing trustee services to a

5. What is a Registered Agent ?

A registered agent as defined by the International Business Companies Act ("IBCA") means "the person who is at any particular time performing the functions of registered agent of a company incorporated under this Act pursuant to subsection (1) of section 39" (of the IBCA).

6. What is an Authorised Agent ?

An Authorised Agent is a person designated by a trust company to act as an intermediary between the licence holder and the Commission.

7. What is a principle office ?

A principle office is the office of the Company Manager or Trust Licence holder with a physical presence in the (British) Virgin Islands.

8. What is a Trust Company ?

A Trust Company is a company that carries on trust business as defined in (2) above.

9. What are the capital adequacy guidelines for trust licence holders?
Under the Banks and Trust Companies Act 1990, general trust licence holders are required to have a minimum fully paid-up capital of two hundred and fifty thousand US dollars ($250,000) or its equivalent in foreign currencies; or such sum as the Financial Services Commission by order determines; and to have deposited or invested a sum of money as may be specified by the Commission but not exceeding US$100,000. Applicants for a restricted trust licence are not subject to capital requirements.
10. What are the capital adequacy guidelines for Company Managers?

Under the Company Management Act, 1990, a Company Manager is required to have a minimum paid up capital of twenty five thousand dollars (US$25,000).

11. What are the minimum requirements for a company management licence?

The minimum requirements for obtaining a company management licence are:

  • proven company-management experience
  • a minimum paid-up capital of twenty five thousand US dollars ($25,000)
  • physical presence in the British Virgin Islands.

The application fee is two hundred US dollars ($200).

Special note: these requirements are by no means exhaustive.

Note:

A consensus has now emerged that, only in circumstances where:

  • the institution concerned is of blue chip international stature and renown, and whose presence in the jurisdiction would be a fillip to the reputation of the BVI as a situs for conducting international business; or
  • the institution concerned will be providing additional services not currently provided within the jurisdiction;

will company management licences be granted to companies other than companies with local ownership and a physical presence in the BVI. In both cases, the company is expected to establish its own physical presence and apply for a general trust licence within two years of the grant of the company management licence. All other institutions will initially have to apply for a general trust licence.

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