Establishing an Investment Business in British Virgin Islands in 2024
The British Virgin Islands (BVI) has established itself as a reputable and competitive hub for financial and investment services. This reputation has been bolstered by the active role of the BVI Financial Services Commission (FSC), the regulatory body responsible for overseeing all financial services activities in and from the territory. Through robust regulatory frameworks and international compliance, the BVI continues to attract global businesses and investors, ensuring its status as a secure and attractive jurisdiction for financial services.
The BVI FSC has successfully positioned the Islands as one of the most popular offshore financial systems in the Caribbean. Its mandate is to uphold the integrity of the Islands as a well-regulated international financial center and safeguard its economic interests, by ensuring industry compliance. As a result, there has been a rising demand for the BVI’s securities and investment business licenses from startups, established financial groups, and firms seeking to expand their global footprint through this dynamic jurisdiction.
In this article, the SALVUS Investment Firms Licensing team discusses the establishment of an Investment Business in BVI, its advantages and other important information on this matter, as follows:
1. Why are businesses established in BVI?
2. What is the applicable Regulatory Framework for Investment Business?
3. License Categories & Business Activities
4. Capital Requirements
5. How SALVUS can support your licensing application
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1. Why are businesses established in BVI?
The BVI offers a unique blend of political, economic, and financial advantages that benefit businesses looking to establish operations there, making it an attractive jurisdiction for global financial operations.
As a British Overseas Territory, the BVI provides stability, favourable tax policies, and a well-regulated financial environment, having a tax-efficient environment with no corporate income, capital gains, or withholding taxes. In addition, it is coupled with the absence of VAT or sales tax, which collectively reduces the overall tax burden on businesses.
The regulatory framework, overseen by the BVI FSC, is robust yet flexible, allowing firms to operate effectively while maintaining compliance with international standards. This is complemented by the BVI’s strong reputation for regulatory compliance, particularly in anti-money laundering (AML) and combating the financing of terrorism (CFT).
Another benefit is the efficiency of the incorporation process, with low setup and operational costs, and the jurisdiction offers high levels of confidentiality and privacy, as financial statements and ownership details are not required to be publicly disclosed. The BVI’s global recognition as a reputable financial centre, coupled with its stable political and economic environment, further enhances its appeal.
Finally, the BVI provides a range of flexible business structures, strong asset protection laws, and a convenient time zone for conducting business with both North American and European markets. Thus, these factors make the British Virgin Islands an ideal location for establishing an investment business, particularly for those seeking a secure, efficient, and globally recognized financial base.
2. What is the applicable Regulatory Framework for an Investment Business?
The Securities and Investment Business Act, 2010 (SIBA) is the cornerstone of the regulatory framework, governing businesses engaged in securities, investment, and related activities within the BVI. SIBA was enacted for firms operating in the territory, to ensure adherence with internationally recognised standards for transparency, investor protection, and market integrity.
In addition, any financial institution is subject to the requirements of the legislative framework developed for their supervision. This is comprised of the following acts:
- The Counter-Terrorism Act,
- The Public Funds Code,
- The Regulatory Code,
- The Mutual Funds Act, and
- The BVI Business Companies Act.
Contact us at info@salvusfunds.com if you are interested in establishing an Investment Business in British Virgin Islands; our Investment Firms Licensing team is ready to answer your questions.
3. License Categories & Business Activities
An Investment Business license provides permission to its holder to establish a trading platform in BVI and trade securities and similar products on behalf of clients. As per the table below there are seven categories of Investment Business licenses that can be issued in the BVI, authorised to conduct different sets of investment activities.
| License Category | Authorised Activities |
|---|---|
| Dealing in Investments | Buying, selling, subscribing for or underwriting investments as an agent or principal; |
| Arranging Deals in Investments | 1. Making arrangements with a view to: a) another person (whether as a principal or an agent) buying, selling, subscribing for or underwriting a particular investment, being arrangements which bring about, or would bring about, the transaction in question; or b) a person who participates in the arrangements buying, selling, subscribing for or underwriting investments. |
| Investment Management | 1. Managing investments belonging to another person in circumstances involving the exercise of discretion (other than as manager of a mutual fund); 2. Acting as manager of a mutual fund; |
| Investment Advice | 1. Advising a person on investments (other than as the investment adviser of a mutual fund) where the advice: a) is given to the person in his capacity as an investor, or a potential investor, or in his capacity as agent for an investor or potential investor; and b) concerns the merits of the investor, or a potential investor (whether as principal or agent). |
| Custody of Investments | 1. Acting as custodian or depository of assets belonging to another person, other than as custodian of a mutual fund or trustee of unit trust; 2. Acting as custodian of a mutual fund; 3. Acting as the trustee of a unit trust. |
| Administration of Investments | 1. Administering or arranging for the administration of assets belonging to another person (other than as administrator of a mutual fund); 2. Acting as administrator, registrar or transfer agent of a mutual fund. |
| Operating an Investment Exchange | Providing a facility, whether by electronic means or otherwise, for the orderly trading of investments or for the listing of investments for the purposes of trading, by members of the investment exchange. |
4. Capital Requirements
The BVI FSC evaluates the adequacy of an applicant’s capital resources based on its business plan and financial projections over a specified period. As such, there is no predetermined or fixed capital requirement across all businesses. Instead, the required capital will depend on the specific risks and nature of the applicant’s operations. It is crucial that applicants demonstrate their capital resources are sufficiently robust to support their business through various scenarios and unforeseen challenges.
5. How SALVUS can support your licensing application
The SALVUS Investment Firms Licensing team has developed an effective project management approach targeting the specific characteristics of each licensing project. Due to our extensive knowledge and expertise, after discussing your business vision and objectives we provide you with the most suitable selection of license categories for your business plan.
We work in coordination with our client’s team to gather all the necessary information and prepare the required paperwork for the submission of a complete application, following regulatory guidelines. We serve as a dependable intermediary between the regulatory authority and your applying firm, streamlining the entire licensing process.
Contact us at info@salvusfunds.com if you are interested in establishing an Investment Business in British Virgin Islands; our Investment Firms Licensing team is ready to answer your questions.
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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.