Understanding succession planning in the BVI – Part 3

We are pleased to bring you Part 3 of our series.  The full content of Part 1 and Part 2 can be viewed by clicking on the link.

Overview and Recap

We are in uncertain times but there are certain things we can control. Succession planning is one of these. This series investigates 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 3 will focus on BVI Trusts in particular:

  • Standard

Other topics to be covered in this series are:

  1. Private Trust Companies
  2. Joint Tenancy
  3. Memorandum and Articles of Association with cascading shares
  4. Private Placement Insurance Policies

BVI Trusts

Standard Trust

A trust can be an ideal solution in the right circumstances. The shareholder, who will be the settlor, transfers the shares to a trustee, who then has legal title to the shares and who has a fiduciary duty to protect and pass on the shares to the nominated beneficiaries of the settlor.  Moreover, the shares will generally not be available to the creditors of the settlor during the lifetime of or after the death of the settlor, there will be no need to obtain a Grant from the BVI Probate Registry and all information in relation to the shares/company will remain confidential.

A trust is also scalable – it can be set up simply as a Will substitute or it can be very tailored. It can be established to give the settlor effective control by reserving powers to the settlor such as the right to revoke or amend the trust, receive dividends and direct the trustee in relation to trust investments. However the trustee still has certain duties to the beneficiaries which the trustee would probably prefer not to have. Trusts are generally regarded as one of best “succession vehicles” but they have historically been hampered by a rule of law known as “the prudent man of business rule” which imposed onerous duties on the trustee to preserve the value of the trust investments.  To address the issues created by “the prudent man of business rule”, the BVI created the concept of the VISTA Trust.


VISTA is a piece of legislation enacted in, and unique to, the British Virgin Islands.

VISTA provides a structure for individuals seeking the protection and benefits of a trust, whilst not wishing to transfer day-to-day management of any underlying company to a trustee and offers a workable solution for family businesses and entrepreneurs. The legislation permits a shareholder to establish a trust of his/her company which frees the trustee from management responsibility and permits the company and its business to be retained as long as the directors think fit

Further, it exonerates a trustee from liability for holding company shares, rather than disposing of them. The legislation provides that the trustee’s duty to retain the shares has precedence over any duty to preserve or enhance their value or the value of the underlying assets in the company.

VISTA can be used in circumstances where:

  • the settlor wishes to, or needs to retain control of the underlying company;
  • the trustee’s involvement in the underlying company is inappropriate, perhaps due to a high degree of expertise, or risk;
  • the underlying assets of the company will comprise unusual or speculative investments;
  • the settlor wishes to ensure that the business of the company is continued by a named individual on his death.

Where the underlying assets are to compromise of speculative investments or the investments involve a degree of risk which would otherwise be regarded as inappropriate for the trustees of a non-VISTA trust.

VISTA has proved to be a very popular succession planning tool globally, particularly in Asia and South/Latin America.

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 has a wealth of experience in providing BVI trust structuring advice including the drafting of tailored trust deeds.

AMS Trustees Limited is licensed to act as the trustee of BVI trusts.

If you would like to learn more about how to put a BVI trust in place, please contact Philippa O’SullivanBarry Mitchell, Calvin Crilly or your usual contact at AMS Financial Group.