One of the main reasons the British Virgin Islands (BVI) is often chosen as a jurisdiction for investment managers to set up their fund vehicles is the flexibility the legislative regime provides for structuring these funds. There are over 2,200 regulated funds and almost certainly a similar amount of unregulated fund vehicles established in the BVI. Our understanding through years of working alongside some of the biggest names in the industry is that investment managers are seeking a jurisdiction with three basic characteristics: political stability, an efficient and reliable legal system and experienced industry practitioners on the ground. The BVI happily possesses all three. This has led to a very wide range of clientele showing a keen interest in the jurisdiction, from well-established institutional fund managers in major jurisdictions around the world with billions in assets under management all the way through to individuals wishing to set up incubator funds with a small amount of start-up capital and wishing to establish a successful track record. The legislation allows for this diversity by offering a product suitable to every shape and size of investment business and ensures that the BVI stays on the cutting edge of global financial services.
Structuring Vehicles -
Although the limited partnership and the unit trust are available vehicles through which fund managers who are more familiar with those investment structures can structure funds, the limited liability company (a BVI business company limited by shares) is still the most popular for investors whether the fund to be structured is a stand-alone fund or a master-feeder fund. Since the BVI Business Companies Act, 2004 introduced the ability for funds to be structured as segregated portfolio companies (SPCs), fund managers have also taken advantage of this type of company in structuring their BVI funds.
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