Understanding succession planning solutions in the BVI – Part 2

We are pleased to bring you Part 2 of our series, following on from the introduction provided by Part 1, which was published earlier. The full content of Part 1 can be viewed here

Overview and recap

We are in uncertain times but there are certain things we can control. Succession planning is one of these. This series looks into various succession tools that are available to people who own shares in BVI companies to facilitate the continued operation of a BVI company with minimum disruption following the passing of a shareholder.

Part 2 will focus on BVI Wills and Reserve Directors.

Other topics to be covered in this series are:

  1. BVI Trusts
    • Standard
    • VISTA
    • Private Trust Companies
  2. Joint Tenancy
  3. Memorandum and Articles of Association with cascading shares

BVI Wills

Under BVI law, in order to deal with the shares in a BVI company, a BVI grant of representation must be obtained. Until a grant is obtained, the shares are effectively paralysed and cannot be dealt with in any way.  The position is made worse when the single individual shareholder is also the only director. In such a case not only are the shares paralysed but the continued operation of the company is also paralysed as a new director cannot be appointed until such time as a Grant has been obtained. Where there are no directors, the annual fees of a BVI company may not get paid. Non-payment of fees can lead to a company being struck-off. Where a BVI company is struck off for seven years it automatically becomes dissolved. Once a company has been dissolved, it can only be restored to the Corporate Register by the BVI High Court, a costly and time consuming process. If an application to restore is not made within the 10 year period following the dissolution of the company no restoration is possible under the BVI Business Companies Act and there is no certainty that the assets of the company can be recovered.

The advantages of a BVI Will are that it will ensure that you:

  • do not lose control over how your shares are distributed in the event of your death;
  • make sure your shares pass on to the right people, in the right manner, as efficiently and effectively as possible;
  • will be able to appoint people you know and trust to be in control of the process;

Further advantages of making a BVI Will include:

  • reduced after death costs – a BVI will has the benefit of being written in English therefore the costs and time associated with getting a certified and qualified translation of the domestic will where written in a language other than English will not exist;
  • efficiency – the formalities associated with getting a BVI grant of probate can be addressed at the point of making a will rather than after death; and
  • parallel applications – with a BVI Will a BVI application for probate can run at the same time as a domestic application for a grant of probate. If there is only one non-BVI Will it is very difficult to run parallel applications.

Reserve Directors

Where a BVI company has a sole individual shareholder/director, people should consider appointing a reserve director. A Grant will still need to be obtained in the BVI but it allows the company to continue to operate while the Grant is being processed. It is a simple process.

How can the AMS Financial Group help?

AMS Financial Group (www.amsfinancial.com) is a global, dynamic organization with offices in the main financial centers, a strong infrastructure, know-how, staff and vision that provides real time solutions to corporate and private clients as well to the asset management industry.

AMS Law offers a BVI Will drafting service and also offers a special discounted rate to all clients with companies at AMS Trustees Limited.

AMS Trustees Limited can act as the executor to a Will as well as provide a reserve director where it is necessary.

If you would like to learn more about how to put a BVI Will in place,  how to appoint a reserve director or any of our other solutions, please contact Philippa O’SullivanBarry Mitchell, Calvin Crilly or your usual contact at AMS Financial Group.

Update on Fund Annual Return (“FAR”) filings for Private Funds


On 19 April 2021, the Cayman Islands Monetary Authority (the “Authority”) issued a Notice regarding the Private Fund FAR Form (the “FAR Form”).

Reporting requirements to be submitted via the FAR Form, when audited financial statements for 2020 are submitted to the Authority, are detailed in the Private Funds (Annual Returns) Regulations, 2021.

The Authority anticipates the FAR Form will be available by 30 June 2021 and to accommodate this release, the deadline for filing audited accounts for 2020 and the FAR Form has been extended to 30 September 2021.  In the interim, Private Funds will not be subject to any penalties for non-compliance with section 13 of the Private Funds Act (2021 Revision).

AMS Law will issue a further update on the release of the FAR Form.

Please contact Stefanie Suckoo at stefanie.suckoo@amslaw.com or (345) 324-6382 to discuss how this may affect your business and how AMS Financial Group can assist you with compliance.

Update on enhancements to BVI Trust and Probate law


The stakeholders in the BVI financial services industry have always taken great pride in constantly reviewing and looking to improve its offshore legislation. In keeping with this, the BVI has recently produced new legislation to modernise BVI trust legislation and simplify its probate procedures. Following is a summary of the most important of these changes.

Court variations to beneficial entitlements

The amendments provide the High Court with additional powers to vary the terms of a trust without the need for the consent of the adult beneficiaries. The High Court can approve such variations where it considers it expedient in all circumstances to do so. Various checks and balances have been built into the new provisions to prevent abuse but it is envisaged it could be very useful in certain situations where having to exercise powers in a certain way may be disadvantageous to beneficiaries.

Rule in Hastings-Bass

The rule in Hastings-Bass allowed certain decisions by trustees to be unscrambled on the basis that they had unintended consequences. The amendments to BVI law make it clear that the High Court has the power to set aside trustee mistakes. It will be particularly useful in situations where trustees have made poor decisions in relation to the exercise of a power, where such decisions have led to disadvantageous consequences to beneficiaries of a trust.

Reserved powers

The amendments expand the reserved powers provisions already contained in s 86 of BVI trust legislation and makes it explicit  that a settlor’s decision to reserve powers does not invalidate the trust, prevent its terms taking effect or cause any of its property to become part of the settlor’s estate on death. In addition the changes make it clear that the grant of powers by the settlor to others will also not invalidate a trust.

Conflict of laws ‘firewalls’ provisions

The firewall protections afforded by s 83A, making it clear that any questions arising in relation to the trust will be determined by BVI law rather than under potentially less favourable foreign laws. This is particularly useful in providing protection against forced heirship and matrimonial claims from foreign jurisdictions.

Third parties dealing with trusts

Due to the very nature of a trust, third parties and trustees were often reluctant to enter into contracts using a trust structure. In 2003 legislation was enacted which provided both third parties and trustees various protections when entering into a contract which reduced the perceived risks involved into entering into such contracts. However the changes only applied to trusts established after the legislation was enacted. The current amendments allow trusts established before March 2004 to take advantage of the changes made in the earlier legislation.

Probates (Resealing) Act, 2021

Prior to the amendment it was only possible to reseal a grant of probate in the BVI from a limited number of jurisdictions. The changes mean that a greatly extended list of jurisdictions will now be able to have a grant of probate resealed in the BVI pursuant to a simplified procedure. The new jurisdictions, which total 67, include Hong Kong, India, Singapore and the USA.

If you would like to know more about these changes, please contact Philippa O’Sullivan, Barry Mitchell, Calvin Crilly or your usual contact at AMS Financial Group.

Understanding succession planning solutions in the BVI – Part 1

The British Virgin Islands (“BVI”) is a leading jurisdiction for the establishment and management of companies and trusts. The “VISTA” trust offers a form of trust unique to the BVI which is particularly attractive for holding shares in BVI incorporated companies. Additionally we are seeing many more clients making enquiries about the benefits of having a BVI Will to deal with the shares they own in a BVI company on their passing. Over the past few weeks, in the midst of the COVID-19 crisis, we have received many inquiries and questions regarding  pragmatic options for cost effective succession planning. As a result, we are going to publish a series of pieces on some practical issues that arise around succession planning and that should be considered, in the hope of creating a greater understanding and awareness. In this piece we will highlight some typical queries we are being confronted with regularly.

What is forced heirship and when do forced heirship rules apply?

Forced heirship determines which heirs are entitled to receive the assets of a deceased person. The rules vary from country to country, but in essence, where forced heirship rules apply, an individual cannot freely dispose of their assets as they see fit; the entitled heirs are determined by the applicable forced heirship laws in force.

Forced heirship is subject to legal restraints depending on the jurisdiction and various laws impose different restrictions. When families don’t carefully structure and plan their succession, forced heirship can lead to complex situations.

What assets can be affected?

In the  BVI, shares in local companies are classified as moveable property for succession purposes. This means BVI legislation treats the law of the country in which the deceased was domiciled as the governing law. If the individual is domiciled in a country where forced heirship rules apply, those rules will apply to their BVI company shares. However this may be able to be overcome through the use of a BVI trust. The BVI has very well drafted trust law dealing with forced heirship issues.

What solutions for succession planning are available to me?

There are various solutions available in the BVI:

  • Establish a BVI will
  • Use of reserve directors
  • Hold  shares in joint tenancy
  • Establish a BVI Vista Trust
  • Establish a regular trust
  • Set up a Private Trust Company
  • Set up a company with “cascading shares”

How can AMS Financial Group help? 

AMS Financial Group (www.amsfinancial.com) is a global, dynamic organization with offices in the main financial centers, a strong infrastructure, know-how, staff and vision that provides real time solutions to both corporate and private clients as well as the asset management industry. We’ve learned that it is important to consider the pros and cons of using a “cheap and cheerful” solution, which might not be the best solution in the long term. By engaging with AMS professionals, many clients have been able to find the appropriate solution for their specific requirements.

We will discuss each of the solutions set out above in this series. Should you need information on our solutions please do not hesitate to liaise with your usual contact at AMS Financial Group.

Update on Private Funds Regulations in the Cayman Islands

The legislative framework for Cayman Islands Private Funds came into force in February 2020 when the Legislative Assembly passed into law the Private Funds Act (2020).

The Private Funds (Annual Returns) Regulations, 2021 and the Private Funds (Amendment) Regulations, 2021 are supplemental regulations which have recently been approved and are now in force.

The Private Funds (Annual Returns) Regulations, 2021 provide the form of annual return to be filed by private fund operators when providing general operation and financial information for private funds as required by the regulator, the Cayman Islands Monetary Authority (CIMA).  These regulations also set out the filing fees which must be paid along with submission of annual returns.

The Private Funds (Amendment) Regulations, 2021 set out the process for notifying CIMA, for registered private funds that are not legally required to file audited accounts or annual returns because they have not received capital contributions from investors.  Private fund operators must submit an operator’s declaration with six (6) months of the private fund’s financial year-end.

Please contact Stefanie Suckoo at stefanie.suckoo@amslaw.com or +1 345 324 6382 to discuss how the recent amendments may affect your business and how AMS Law can assist you in this regard.