Summary Of Regulations Enabling Exempt Private Trust Companies To Be Established In The BVI


The Financial Services (Exemptions) Regulations, 2007 came

into effect on 1 August 2007.

The Regulations exempt British Virgin Islands

("BVI") companies from obtaining

trust licences under the BVI's Banks and Trust Companies

Act, 1990 (as amended) (the "BTCA")

if they satisfy certain conditions.

In order to qualify for the exemption a company (an

"exempt PTC") must satisfy each of

the conditions which are summarised in paragraphs 2.1 to 2.8



The company must be a BVI company that was originally

incorporated under the BVI Business Companies Act (the

"BCA"), but certain companies which

were originally incorporated under the International Business

Companies Act and which were voluntarily or automatically

re-registered under the BCA will also qualify1.

The company must be a limited company (whether limited by

shares or limited by guarantee and whether or not, in the case

of a company limited by guarantee, it is authorised to issue


The company's name must include the designation

"(PTC)". This must be placed before one of the

permitted endings for the name of a BVI company (such as

"Limited", "Ltd" or "Inc").

The company's memorandum must state that it is a private

trust company.

The registered agent of an exempt PTC must hold a class 1

trust licence under the BTCA. (All BVI companies which are

incorporated under the BCA, whether or not they are exempt

PTCs, are required by that Act to have registered agents and

most, but not all, of them have class 1 trust licences.) The

company must at all times ensure that the registered agent has

such a licence.

The company must not solicit trust business from members of

the public.

The company must carry on no business other than that of

being the trustee, protector or administrator of trusts (or of

managing or administering trusts). However activities which are

incidental or ancillary to trusteeship and trust administration

should not disqualify the PTC from falling within the


All of the company's trust business must either be

"unremunerated trust business" or "related trust

business", but an exempt PTC is permitted to carry on a

mixture of unremunerated trust business and related trust

business. If at any stage it carries on trust business which is

neither unremunerated trust business nor related trust business

it will no longer be eligible for the exemption and will need

to obtain a trust licence. "Unremunerated trust

business" is considered further in paragraphs 3.1 to 3.5

below and "related trust business" is considered

further in paragraph 4 below.


"Unremunerated trust business" is defined by

paragraph 2(1) of the Regulations as trust business which is

carried on "if no remuneration is payable to, or received

by, the [exempt PTC], or any person associated with [it], in

consideration for, or with respect to, the services that

constitute trust business".

"Remuneration" includes money or any other form of

property and includes remuneration payable or received out of

the assets of the trust (or its underlying assets), from the

settlor or a beneficiary, or from any other person pursuant to

an arrangement with the settlor or a beneficiary.

Persons who will be regarded as being "associated

with" an exempt PTC for the purposes of the definition in

paragraph 2(1) of the Regulations include those who have a

legal or beneficial interest in it, its directors and employees

and its former directors and employees.

If remuneration is paid to a director of a PTC it will be

treated as being remuneration which is paid to a person who is

"associated with" the PTC within the meaning of the

definition in paragraph 2(1) of the Regulations unless

two conditions are satisfied. The conditions are that it must

be paid in relation to professional director services provided

to the PTC and that the director must not otherwise be

associated with the PTC (eg as a result of having a direct or

indirect beneficial interest...

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