Monday, March 26, 2007

Offshore Industry Professionals Highlight BVI Regulations' Changes Favourable to Financial Community

The British Virgin Islands continues the improvements of business environment for corporations and financial institutions, which actually started from the British Virgin Islands Special Trusts Act 2003, and the BVI Business Companies Act 2004.

One of the leading global offshore companies, Walkers, has recently expressed its opinion on the newly implemented private trust company legislation and the Legal Profession Bill. Offshore professionals have also highlighted other important enhancements contributing to BVI leading positions in offshore financial world including the development of the Caribbean's first Commercial Court and the appointment of a Managing Judge for the Eastern Caribbean Supreme Court.

The planned introduction of the new private trust company legislation was announced in October 2006, and the law provisions came into force on 15 January 2007. Under the newly enacted law, certain private trust companies may be exempted from licensing requirements and other provisions of the Banks and Trust Companies Act. Under procedures implemented by the Financial Services Commission, these exemptions will be applied to the BVI private trust companies which do not offer their services to the general public.

Private trust companies allow for establishing family-controlled structures, and offer trustees all the benefits of limited liability and perpetual existence which are usually the features of corporate vehicles, and can decrease the amount of taxes, by moving the liability from the settlor to the trust company. This kind of corporate vehicles has become increasingly popular in offshore financial centres during the last 15 years.

Other important steps taken by the BVI Government is the development of the first Commercial Court in the Caribbean and introduction of the Legal Profession Bill, which makes provision for the fusion of the barrister and solicitor branches of the legal profession, and promotes legal education and the discipline of legal practitioners. This Bill is another example of how the jurisdiction focuses on providing the highest level of legal services.

New legislation's positive impact on offshore industry is confirmed by the growing volumes of financial services provided by offshore law firms. For example, Walkers law firm has reported the increased amount of work in its BVI office, including the high net-worth corporate transactions and complex international litigation cases. As a result of an increase in litigation work, the law firm recently added three members to its BVI department, and now it has become the second largest law firm in the BVI.
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