BVI Hedge Fund Formation | Finlaw

BVI Hedge Fund Formation

The British Virgin Islands is home to over 600,000 offshore entities, making it the largest offshore destination in the world. Among these entities are some of the world’s largest and most renowned hedge funds. Since 1984, this stable, British Territory has been a fixture on the global stage as one of the preeminent offshore financial services jurisdictions.

Relying on the United States dollar as its prevailing currency, the British Virgin Islands continues to be attractive not only to asset managers, but also to investors seeking favorable tax treatment and privacy. Corporate income tax has been abolished in the BVI and replaced with a withholding tax applicable only to entities earning domestic income. Moreover, the nation’s Financial Services Commission has remained committed to streamlining corporate and financial services compliance, all at a relatively low cost.

The British Virgin Islands is an ideal jurisdiction for the formation and registration of an investment or hedge fund. The BVI offers a multi-tiered fund registration structure ideal for investment vehicles of any sizes, including the BVI “Incubator Fund” for startup hedge funds. As a result, a significant portion of the world’s hedge funds are domiciled in the British Virgin Islands

Advantages of a British Virgin Islands Hedge Fund

Since the advent of hedge funds in the 1970’s, asset managers have flocked to tax-advantaged jurisdictions to shelter their above-market gains from punitive tax rates in traditional jurisdictions such as the United States and United Kingdom. That trend has continued through today as sophisticated investors have come to expect often complex, private tax-neutral structures for their investments. As such, the British Virgin Islands is a preferred jurisdiction for a registered investment fund.

BVI Fund Registration

License Incubator or Professional Fund
Time to License 1 Month
Capital Requirement Zero
Tax Structure No income or capital gains tax
Economic Substance No
Local Director Yes
AML/KYC Yes
Audit No

Resources

Description QR code Download
British Virgin Islands Hedge Fund – Information Sheet and Fee Schedule.
BVI – Approved Investment Manager Application.
BVI – Approved Fund Application.

The British Virgin Islands Hedge Fund Registration Package

  • Formation of British Virgin Island limited company (management company) together with Articles of Association, investment management agreement, organizational meeting minutes/resolutions, founder subscription agreement, membership unit ledger, physical certificates.
  • Formation of British Virgin Island limited company (master fund) together with Articles of Association, investor due diligence questionnaire, investor subscription agreement, limited share unit ledger, certificates of partnership, capital call and distribution notices, UBTI agreement/entity.
  • Formation of US limited partnership (feeder fund) together with limited partnership agreement, investor due diligence questionnaire, investor subscription agreement, limited share unit ledger, certificates of partnership, capital call and distribution notices, UBTI agreement/entity.
  • Draft two (2) private placement memorandum; (a) master fund investors and (b) US feeder fund investors together with related subscription agreements.
  • Anti Money Laundering, Know-Your-Customer, OFAC policy, code of ethics, valuation policy and Disaster/Data Loss policy together with website disclosures.
  • Regulatory filings including fund registration and exempt manager registration with British Virgin Island Financial Services Commission and Form D filing with US. Securities and Exchange Commission.
  • Draft and structure investment management agreement together with related investor disclosures.
  • Facilitate opening of bank and brokerage accounts for master and feeder funds.

Contact the BVI Hedge Fund Experts

Trust our over fifty year’s combined experience in creating innovative solutions for our clients. Contact the hedge fund registration experts at FinLaw to begin the process of obtaining your British Virgin Islands hedge fund registration today. Our knowledgeable and skilled professionals are pleased to answer any of your questions.

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