A BVI Vista Trust offers the ability for settlors to retain control over the management of the trust. The perfect structure for holding shares in companies around the world while providing asset protection for the settlor. Available to foreigners to create for the benefit of foreign beneficiaries.
The BVI Special Trusts Act of 2003 (hereinafter, the “Act”) established the legal structure for creating this unique type of trust and the types of activities they may engage in along with their termination.
Background
The British Virgin Islands (BVI) situated in the Caribbean Sea near the U.S. Virgin Islands and Puerto Rico. For more than 325 years, BVI has been a British Overseas Territory. English is their official language.
BVI Vista Trust Benefits
A BVI Vista Trust provides these types of benefits:
• Foreigner Participation: Foreigners may be settlors, beneficiaries, and assets can be located around the world.
• Settlor’s Control: The Vista Trust offers unique benefit of settlors maintaining control of their companies held by the trust.
• No Tax: The BVI does not impose any type of taxes on their trusts. However, U.S. taxpayers and those subject to taxes on global income must report all income to their governments.
• Estate Planning: Perfect for preserving a family’s companies for many generations of succession.
• Asset Protection: Companies ownership separated from the settlor and his or her family from future creditors.
• Privacy: No public records exist regarding trusts, settlors, trustees, beneficiaries or their assets.
• Fast Formation: Vista Trusts can be formed in one day.
• English: Being a British Overseas Territory for over 325 years makes English its official language.
BVI Vista Trust Benefits Name
Trusts must select a name totally unlike any other legal entity’s name in the BVI.
The name must end with the word “Trust” so third parties know the type of legal entity.
Purpose
This special type of trust holds shares in companies under these circumstances:
• Its only purpose is to hold shares in companies in which the trustee cannot become involved with the operations of the companies except for special circumstances; and
• The shares are held for an indefinite period of time.
A typical trust gives the trustee lots of powers and discretion to monitor the company’s managers and to sell the shares. Often these powers conflict with the interests of a family investment or trading company. These potential conflicts are removed by a Vista Trust where the trust deed provides for no duties or powers for the trustee to interfere with the company’s management or to arbitrarily share the company’s shares.
Highlights of the Vista Trust
• Holding a company’s shares indefinitely by the Vista Trust;
• Allowing the managers and directors of the company to continue managing without interference from the trustee;
• The trust deed may limit the trustee from disposing of the company’s shares without obtaining prior consent from the settlor or the directors or any other person designated in the trust deed;
• The trust deed may also prohibit the trustee from voting on all matters or other typical powers may be limited to prevent the trustee from interfering with the company’s management or business activities.
Settlor
The power of the settlor to retain rights normally given up when a company’s shares are held in trust makes this law unique.
The settlor can be residing anywhere and be a citizen of any country.
Trust Deed
The settlor can set forth rules normally found in a corporation’s articles of incorporation and bylaws. These include the appointment, removal, and compensation of officers, managers, and directors of the company whose shares are held by the trust. The trust deed can specify certain named persons to succeed a director upon the death or retirement of the director. The settlor can remain as the managing director of a company and name his or her successor.
The trust deed may require the trustee to transfer the company’s shares to specified beneficiaries upon the settlor’s death. This avoids the necessity for a will and probate proceedings which can be time consuming and costly. It also legally avoids inheritance and estate taxes.
BVI Shares
The Vista Trust Act only applies to holding BVI company shares. However, the way to get around this is for a BVI company to hold the international companies shares and then the Vista Trust holds the BVI company’s shares. Then, everything mentioned above still applies.
Asset Protection
The best time to set up a Vista Trust is when a company enters risky ventures such as shipping, airplanes, investment options and futures, and any other risky business. The reason is that these types of business activities can lead to large losses or personal injury liabilities (ships and airplanes) leading to lawsuits against the personal assets of the directors, officers, and managers of a company. The Vista Trust separates these assets from the rest of the settlor’s assets providing asset protection for the remaining assets.
The ability to protect a family business while maintaining control through a Vista Trust is what makes the Vista Trust unique amongst other jurisdiction’s trusts.
Beneficiaries
A Vista Trust is typically a family trust for the benefits of the settlor’s children, grandchildren and many generations of heirs.
Beneficiaries are not BVI residents and can live anywhere and be citizens of any country.
Trustee
The trustee can reside anywhere and does not have to be a BVI citizen or resident. Trustees can be natural persons or legal entities registered anywhere.
Trustees must follow the terms and conditions in the trust deed.
Taxes
The BVI does not impose any type of tax on their trusts. This includes: income tax, corporate tax, capital gains tax, gift tax, inheritance tax, wealth tax, withholding tax, and stamp duty.
Note: U.S. residents pay taxes on all worldwide income (as do residents of other countries) so they must declare all global income to their tax agencies.
Public Records
Trust do not register with the government. Therefore, all information concerning the trust, settlor, trustee, beneficiaries, and assets are private and not included in any public records.
Time for Formation
Trust deeds can be written quickly, even in one day.
Form a BVI Vista Trust Conclusion
A BVI Vista Trust offers the following benefits: Complete foreign participation, no taxes, asset protection, estate planning, privacy, fast formation, English as official language, and settlor’s control of his or her companies.
