The BVI Approved Manager: A Regulated Offshore Investment Manager with Less Regulation

A BVI Approved Manager is a regulated offshore investment manager or adviser vehicle which enjoys fast and simple registration, and “light touch” ongoing regulatory requirements.

BVI Approved Managers allow emerging and established asset managers to use a regulated, offshore (tax neutral) investment manager or adviser vehicle without the time, cost and regulatory burden of obtaining a full securities license.

Key Benefits

• No audit requirement (must submit unaudited annual financial statements)
• No requirement to appoint BVI-resident directors (must have two directors, including one individual director)
• No requirement to establish Economic Substance in BVI (unlike other low/no tax jurisdictions including Cayman, Jersey, Guernsey etc. where fund management requires local management and control, and adequate local premises, personnel and expenditure)
• Fast and simple registration
• “Light touch” ongoing regulatory requirements

 Fast and Simple Registration

• BVI business company incorporation is quick and affordable
• Short-form Financial Services Commission (“FSC”) application including
  • funds/accounts to be managed
  • anticipated AUM
  • directors/owners confirmed to be fit and proper
  • CVs/resumes of directors/owners
  • Form of investment management agreement(s)
• Typically approved within 21 days
• US$1,200 FSC application fee

What Regulated Business Can BVI Approved Managers Conduct?

BVI Approved Managers can act as investment manager or investment adviser to:

• BVI incubator, private, professional or private investment funds
• Investment funds from recognised jurisdictions with equivalent characteristics to private or professional funds*
• qualifying feeder funds and affiliates
• other persons approved on a case-by-case basis (eg managed securities accounts of Professional Investors)

subject to maximum AUM of $400M (open-ended) or $1Bn (closed-ended).

*Maximum 50 investors

OR

Invitations made on private basis only

OR

Minimum investment of $100,000 AND Professional Investors only (ie ordinary business involves acquisition/disposal of same kind of property as fund invests in, or net worth (jointly with spouse) >US$1,000,000)

“Light touch” Ongoing Regulatory Requirements

• No requirement to appoint a Compliance Officer (must appoint a Money Laundering Reporting Officer – typically a director, or a professional service provider)
• Annual FSC fee of $1,800
• Annual FSC return (including details of funds/accounts managed and AUM)
• Annual AML/CTF Return (including information re corporate governance, record keeping, risk profile, distribution channels, customer exposure, PEPs, sanctions, risk monitoring, annual AML/CFT review/audit, geographic exposure and suspicious activity reporting)
• Non-reporting Financial Institution under FATCA (exemption under Annex II, Model 1 IGA)
• Reporting Financial Institutions under CRS (must register with BVI International Tax Authority, appoint Principal Point of Contact and Authorizing Person (typically a director, or a professional service provider), and submit CRS forms annually – often nil returns)
• Notify BVI FSC of change to information in application/annual return
• Appoint licensed BVI authorised representative (acts as conduit between BVI Approved Manager and FSC – this is typically the BVI registered agent who provides the registered office, or its affiliate)

BVI Legal Counsel Involvement

BVI counsel’s scope of engagement typically includes:

• Legal advice and assistance with Approved Manager application
• preparation of BVI-compliant AML policies and procedures (or could be provided by AML compliance services provider)
• preparation of Investment Management Agreement (or could be prepared by onshore counsel etc.)

Please contact [email protected] to discuss whether a BVI Approved Manager could meet your needs.