A BVI Approved Manager is a regulated offshore investment manager or adviser vehicle which enjoys fast and simple registration, and "light touch" ongoing regulatory requirements.
BVI Approved Managers allow emerging and established asset managers to use a regulated, offshore (tax neutral) investment manager or adviser vehicle without the time, cost and regulatory burden of obtaining a full securities license.
Key Benefits
- No audit requirement (must submit unaudited annual financial statements)
- No requirement to appoint BVI-resident directors (must have two directors, including one individual director)
- No requirement to establish Economic Substance in BVI (unlike other low/no tax jurisdictions including Cayman, Jersey, Guernsey etc. where fund management requires local management and control, and adequate local premises, personnel and expenditure)
- Fast and simple registration
- "Light touch" ongoing regulatory requirements
Fast and Simple Registration
- BVI business company incorporation is quick and affordable
- Short-form Financial Services Commission
("FSC") application including
- funds/accounts to be managed
- anticipated AUM
- directors/owners confirmed to be fit and proper
- CVs/resumes of directors/owners
- Form of investment management agreement(s)
- Typically approved within 21 days
- US$1,200 FSC application fee
What Regulated Business Can BVI Approved Managers Conduct?
BVI Approved Managers can act as investment manager or investment adviser to:
- BVI incubator, private, professional or private investment funds
- Investment funds from recognised jurisdictions with equivalent characteristics to private or professional funds*
- qualifying feeder funds and affiliates
- other persons approved on a case-by-case basis (eg managed securities accounts of Professional Investors)
subject to maximum AUM of $400M (open-ended) or $1Bn (closed-ended).
*Maximum 50 investors
OR
Invitations made on private basis only
OR
Minimum investment of $100,000 AND Professional Investors only (ie ordinary business involves acquisition/disposal of same kind of property as fund invests in, or net worth (jointly with spouse) >US$1,000,000)
"Light touch" Ongoing Regulatory Requirements
- No requirement to appoint a Compliance Officer (must appoint a Money Laundering Reporting Officer – typically a director, or a professional service provider)
- Annual FSC fee of $1,800
- Annual FSC return (including details of funds/accounts managed and AUM)
- Annual AML/CTF Return (including information re corporate governance, record keeping, risk profile, distribution channels, customer exposure, PEPs, sanctions, risk monitoring, annual AML/CFT review/audit, geographic exposure and suspicious activity reporting)
- Non-reporting Financial Institution under FATCA (exemption under Annex II, Model 1 IGA)
- Reporting Financial Institutions under CRS (must register with BVI International Tax Authority, appoint Principal Point of Contact and Authorizing Person (typically a director, or a professional service provider), and submit CRS forms annually – often nil returns)
- Notify BVI FSC of change to information in application/annual return
- Appoint licensed BVI authorised representative (acts as conduit between BVI Approved Manager and FSC – this is typically the BVI registered agent who provides the registered office, or its affiliate)
BVI Legal Counsel Involvement
BVI counsel's scope of engagement typically includes:
- Legal advice and assistance with Approved Manager application
- preparation of BVI-compliant AML policies and procedures (or could be provided by AML compliance services provider)
- preparation of Investment Management Agreement (or could be prepared by onshore counsel etc.)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
