BVI VISTA Trust
The British Virgin Islands (BVI) is recognized as a premier jurisdiction for the establishment and administration of trusts. Among its offerings is the VISTA trust, a structure unique to the BVI and particularly well-suited for holding shares in BVI-incorporated companies.
The jurisdiction benefits from a well-developed trust industry, underpinned by modern legislation and a reliable legal system. Trust matters are overseen by a dedicated Commercial Court, with final appeals heard by the Privy Council in the United Kingdom.
The BVI also offers a favorable tax environment, with no gift, estate, income, or capital gains taxes for individuals or corporations. This makes it an attractive location for setting up trusts with fiscal neutrality.
The BVI VISTA Trust is specifically designed for settlors who wish to retain control over the management, administration, and succession planning of underlying companies.
Created under the Virgin Islands Special Trusts Act, 2003 (as amended), the VISTA trust represents a modern and flexible trust structure intended for scenarios where:
Shares in BVI companies are to be held for the long term, and
The trustee is not expected to interfere in the day-to-day operations of the company, except in narrowly defined circumstances.
Under traditional trust law, trustees are generally required to act as “prudent investors” regarding shares held in a company. This responsibility includes overseeing the company’s performance and management and may compel the trustee to sell the shares to either enhance the value of the trust’s assets or reduce risk through diversification.
Such obligations can often clash with the objectives of family-owned trading or investment companies.
The VISTA trust framework addresses these issues by allowing the establishment of trusts in which trustees are explicitly relieved of any duty to become involved in the company’s operations or to unlock the underlying value of the shares.
Summary of BVI VISTA Trust main provisions
Shares in a company held under a VISTA trust can be retained indefinitely.
The directors or other designated individuals within the underlying company are free to manage its operations without intervention from the trustee.
VISTA legislation is applicable exclusively to shares in BVI-incorporated companies.
Under VISTA, the trustee is generally required to hold the shares without disposing of them, unless specific conditions set out in the trust allow otherwise.
Although the trust mandates the retention of shares, the trustee may be permitted to dispose of them with the approval of the company’s directors, the settlor, or another individual specified in the trust deed, depending on the exact terms of the trust.
The trustee is explicitly restricted from using any voting rights or powers associated with the shares to influence company management or day-to-day operations.
However, in certain circumstances, an “interested person” (such as a beneficiary) may require the trustee to intervene in the affairs of the company. In such cases, the trustee must act if the individual provides a valid “permitted ground of complaint”, as defined in the trust instrument.
The settlor may also establish detailed provisions within the trust to govern the appointment, removal, and compensation of company directors. For instance, if the settlor serves as a director, the trust can specify a successor to take over following the settlor’s death.
The trust can further include instructions for the distribution of company shares to named beneficiaries upon the settlor’s death. This allows shares to be transferred smoothly to family members without the need for a will, thereby avoiding probate delays and expenses. This structure can offer tax efficiency, continuity of ownership, and peace of mind for the settlor and their heirs.
VISTA Trusts and non-BVI companies
It is important to note that VISTA Trusts are limited in their direct application to shares of BVI-incorporated companies. To include shares of non-BVI entities or other types of assets, these must be owned by a BVI company whose shares are, in turn, directly held by the trustee of the VISTA Trust.
When to set up a BVI VISTA Trust
You should establish a BVI VISTA Trust, when:
You want to retain control
The settlor or family wants to keep strategic control of a company while ensuring smooth succession.
Long-term succession planning
Ensuring generational transfer of wealth without loss of business control.
Business continuity
For family-owned businesses where external trustees’ interference might be unwelcome.
You’re using BVI companies
It’s most effective when the core assets are shares in BVI-incorporated entities.
You want privacy and flexibility
Unlike foundations, trusts provide a more flexible and private solution for asset protection and inheritance
Advantages of a BVI VISTA Trust
Here are some key advantages of BVI VISTA Trusts:
Settlor’s Control Over Management
VISTA Trusts allow the settlor to retain control over the management of a BVI company, usually by appointing directors, without interference from the trustee in day-to-day business operations.
Trustee’s Limited Duty
Trustees under a VISTA Trust have no obligation to interfere in the management of the underlying BVI company. This is ideal for entrepreneurial settlors who want trustees to stay passive regarding business decisions.
Succession Planning
They offer a robust framework for succession, allowing for the smooth transfer of shares and control in family businesses or holding structures across generations.
Retention of Voting Powers
The settlor can retain voting control by acting as a director of the underlying BVI company, while still placing legal ownership of the shares in trust.
Asset Protection
As with traditional trusts, VISTA Trusts provide protection against forced heirship claims, creditors (subject to applicable laws), and family disputes.
Flexibility and Customization
The trust deed can be tailored to the settlor’s wishes, including rules for appointing and removing directors or other company governance matters.
No Need for Trustee Interference
Unlike traditional trusts where trustees must monitor and potentially intervene in company matters, a VISTA Trust legally relieves trustees of this responsibility.
Privacy
VISTA Trusts offer a high degree of confidentiality, as trust documents are generally not publicly filed.
Tax Neutrality
The BVI offers a tax-neutral environment, making VISTA Trusts appealing for international clients, although tax advice should always be taken in the settlor’s jurisdiction.
If you’re considering setting up a BVI VISTA Trust, it’s highly advisable to consult one of our Business Development Managers, a legal and trust professional, to ensure the trust is structured correctly and complies with all relevant laws.
