Working in close co-operation with licenced Mutual Fund Administrators in the British Virgin Islands CHCL Fiduciary Group offers assistance in the incorporation and, when applicable, licencing and administration of Mutual Funds there.
For the investment professional a BVI Mutual Fund enables efficient use of existing research and investment expertise and resources. The properly structured offshore fund offers a number of features that distinguish it from a traditional mutual fund:
- Flexible regulation makes it easier to establish and administer the funds.
- Formation and operating costs are significantly lower.
- Lower costs means funds can be offered at zero or low load and with competitive management fees and service provider fees not tied by regulations.
- Wide choice of fund structure.
- Fund assets may be anywhere in the world.
- Investors may be individual or entities anywhere in the world. Whilst there are no restrictions on investors the fund should seek legal advice in each country of offering.
- There are no taxes or duties enabling the fund to reinvest profits and gains in their entirety. Generally tax on gains is deferred until redemption by the investor. Tax advice must be sought in the jurisdictions of the sponsor, manager and investors.
- No requirement for the key fund functionaries to be resident in the BVI.
- No substantial back office operation required.
- Placing clients in a fund significantly reduces client transactional paperwork. Investors simply receive the periodic Net Asset Value or financial statement.
- The fund enables efficient use of research, investment expertise and resources through the pooling of investments.
When choosing an offshore financial centre in which to establish the fund, there are a number of factors to consider both from the sponsor’s and the investor’s point of view. Integrity is the key to investing millions of dollars in or through a perhaps unfamiliar jurisdiction. The BVI has a reputation second to none as a corporate domicile and is a leading centre for formation of funds. The Securities and Investment Business Act ensures a well regulated regime which balances a policy of non-interference in the day to day operations of the fund with safeguards for investors. Many offshore jurisdictions regulate only funds of a certain size or nature and do not specifically licence the professionals involved. The differentiated regulatory scheme covers all levels of funds but is in no way burdensome to the fund. Some of the many other benefits include:
- Choice of structure as a Company, Limited Partnership or Unit Trust.
- Simple and flexible legislation that reflects modern practices for example:
- Share capital can be denominated in any currency or multiple currencies
- There is no limit to the number, type, designation or rights of different classes of shares.
- There are no restrictions on borrowing powers or investment practices or policies.
- Minimum formality and speedy approval procedures.
- Ease in formation and administration of funds.
- Cost efficiency makes all sizes of funds a viable and attractive proposition.
- The US Dollar is the official currency of the BVI.
- There are no exchange controls or other restrictions on the movement of funds.
- Professionals experienced in all aspects of establishment and administration of the fund.
The BVI is a leading jurisdiction for the formation of funds of which the majority are private and professional funds.