This Guide is intended to explain the requirements to obtain and maintain private trust company status under the Financial Services (Exemptions) Regulations, 2007 (the “Regulations”).
1. Company requirements
The intended Private Trust Company (“PTC”) must satisfy the following requirements:
1.1 it must have been first incorporated under the BVI Business Companies Act, 2004 (“BVIBC Act”); or
1.2 incorporated under the BVI International Business Companies Act, 1984 (“IBC Act”) and voluntarily re-registered under the BVIBC Act; or
1.3 incorporated under the IBC Act and has been compulsorily re-registered under the BVIBC Act, and in respect of which an election to disapply Part IV of Schedule 2 to the BVIBC Act has been made and registered; or
1.4 incorporated under the Companies Act (Cap. 285) and has been voluntarily re-registered under the BVIBC Act;
1.5 it must be limited by shares or guarantee;
1.6 it must contain in its memorandum of association the statement that it is a ‘private trust company’; and
1.7 its name must end with the designation “(PTC)”, placed before: “Limited”, “Ltd”, “Corporation”, “Corp” or “Inc” as the case may be. The name cannot include “trust”, “trustee”, “trust company” or “fiduciary” or any derivatives thereof whether in English or otherwise.
2. Trust business requirements
The PTC must conduct “trust business” that is the business of acting as a professional trustee, protector or administrator of a trust or settlement or managing or administering any trust or settlement.
In addition, it must only conduct trust business which is either “unremunerated trust business’ or “related trust business”.
2.1 A PTC conducts “unremunerated trust business” where the following is satisfied:
2.1.1 payments made to the PTC are only in respect of costs and expenses incurred in acting as trustee, protector or administrator of the relevant trust or settlement - the PTC is not permitted to make a profit;
2.1.2 only “professional” directors are remunerated for providing director services, and such professional directors are not connected to the PTC, whether by share ownership or otherwise;
2.1.3 no person associated with the PTC is remunerated in consideration for or with respect to the PTC providing services that constitute the relevant trust business.
A person is “associated” with a PTC where:
2.1.4 he has an interest, whether legal or beneficial, in the PTC; or
2.1.5 he is a director or former director of the PTC (excluding a professional director); or
2.1.6 he is an employee or former employee of the PTC.
If the above is satisfied, the PTC may act for any type of trust except a trust subject to the provisions of the Virgin Islands Special Trusts Act, 2003.
2.2 A PTC conducts “related trust business” where the following is satisfied:
2.2.1 the relevant trust or settlement is exclusively charitable; or
2.2.2 all the beneficiaries of the trust or settlement are “connected” to the settlor, or are otherwise charities; and
2.2.3 the settlor of the trust or settlement is not a beneficiary.
For the purposes of 2.2.2, a beneficiary is “connected” to the settlor if the relevant beneficiary and settlor fall within a class of family relationship, as defined by the Regulations. If the above is satisfied the PTC may charge a profit, and lay directors and persons otherwise associated with the PTC may be paid remuneration.
3. Registered agent requirements
The Regulations require that the registered agent of the PTC satisfy the following requirements:
3.1 at all times holds a class 1 trust licence under the BVI Banks and Trust Companies Act, 1990;
3.2 has taken all reasonable steps to satisfy itself that the PTC is or will only carry on trust business which is either “unremunerated trust business” or “related trust business” before agreeing to act as registered agent of the company;
3.3 conducts periodic reviews and take all reasonable steps to satisfy itself that the PTC is only conducting trust business which is either “unremunerated trust business” or “related trust business”;
3.4 ensures that it has up to date copies of the following:
3.4.1 the trust or settlement deed;
3.4.2 any deed or document of variation, varying the terms of the trust or settlement; and
3.4.3 any other deeds or documents which the registered agent has relied on to satisfy itself that the relevant PTC is complying with the requirements contained in 3.2 and 3.3 above.
3.4.4 notifies the Financial Services Commission if at any time it forms the opinion that the relevant PTC is not conducting trust business which is either ‘unremunerated trust business’ or ‘related trust business’.
4. General restrictions
In addition, a PTC is not permitted to do any of the following:
4.1 conduct any business that is not trust business;
4.2 solicit trust business from members of the public;
4.3 carry on any trust business other than either “unremunerated trust business” or “related trust business”;
4.4 make any representations in any advertisement, billhead, circular, letter, letterhead, notice, paper or in any other manner that the PTC is conducting trust business.
5. Transitional provisions
A trust company that had, prior to 2nd August 2007, been relying on either paragraph 7(c)1 or paragraph 7(d)2 of the Banks and Trust Companies (Application Procedures) Directions, 1991 to avoid the need to obtain a trust licence, under the under the Banks and Trust Companies Act, 1990, has until 31st December 2008 to either comply with the Regulations or obtain a trust licence.