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Trusts, foundations and charities


Are trusts legally recognised in your jurisdiction? If so, what types are available and most commonly used?

All types of trust that are permissible under English law may be established under British Virign Islands (BVI) law.

BVI trusts may be discretionary or fixed interest in nature. This means that the trust assets can either be held for a class of beneficiaries with distributions being made at the discretion of the trustee (discretionary trusts) or, alternatively, the trust deed can set out the specific beneficial interests of each beneficiary, such as a right to the income earned by the trust assets (fixed-interest trusts).

It is also possible to create reserved power trusts and both charitable and non-charitable purpose trusts.

Purpose trusts

Non-charitable purpose trusts may be established in the BVI provided that the following conditions are met:

  • The purpose is specific, reasonable and possible;
  • The purpose is not immoral, contrary to BVI public policy or unlawful; and
  • At least one trustee is a ‘designated person’ (which usually results in the trustee being a licensed BVI trust company or a BVI private trust company).

Reserved powers

For a number of reasons, a settlor may wish to retain a certain level of control over specific elements of the administration of a trust. The BVI was one of the first offshore jurisdictions to bring in legislation allowing powers to be reserved in favour of the settlor or another. As a result, certain powers that would usually be vested in the trustee (generally, a third-party professional offshore trust company) can instead be conferred on a ‘protector’, who can be the settlor or such other family member, friend or adviser as the settlor chooses to appoint. 

The powers held by the ‘protector’ might include:

  • power to determine the law governing the trust;
  • power to remove and appoint trustees;
  • power to exclude or include beneficiaries in the class of potential beneficiaries; and
  • power to approve or refuse distributions of income and capital.


The Virgin Islands Special Trusts Act (VISTA) came into force on March 12004 and was introduced in order to allow a shareholder to establish a BVI trust over a BVI company that disengages the trustee from administrative and managerial responsibility in relation to that BVI company.

The principal effect of VISTA is to remove the duty of trustees to monitor and intervene in the conduct of the directors and in the running of the BVI company held in trust. Owing to the large number of companies incorporated in the BVI, VISTA was introduced:

  • to offer a vehicle that would remove the need to obtain a grant of probate in the BVI (which would otherwise be a requirement on the death of the owner of BVI company shares) by implementing a trust structure; and
  • to allow the owner to retain effective management and control of the company after having divested him or herself of its ownership.

The VISTA regime can apply to discretionary trusts, fixed-interest trusts, charitable trusts or purpose trusts, as long as certain conditions are satisfied.

The VISTA legislation was amended in May 2013 to fine-tune certain elements of the regime and introduce greater flexibility; as a result, is likely to remain the most popular form of trust vehicle in the BVI.

What rules and procedures govern the establishment and maintenance of trusts?

BVI trusts follow traditional equitable concepts of a trust whereby a person (the settlor) places assets under the control of another (the trustee) for the benefit of beneficiaries or a specific purpose set out in the trust deed.

The general principles of BVI trust law are derived from those of English trust law; they have been supplemented by statute to offer a variety of flexible and user-friendly trust structuring solutions.

The main statutory sources of trust law for the creation and administration purposes can be found in the BVI Trustee Act 1961, which was largely based on the English Trustee Act 1925. The BVI trust regime has since been enhanced by the Trustee (Amendment) Acts 1993, 2003, 2013 and 2015.

How are trusts taxed in your jurisdiction?

Not applicable.

Foundations and charities

Are foundations and charities legally recognised in your jurisdiction? If so, what forms can they take?

There is no foundation legislation in the BVI.

A charitable trust may be established under BVI law to create a charitable fund or to make provision for existing charitable institutions or purposes.

A trust under BVI law is charitable if all its purposes fall exclusively within one or more of the categories of charitable purposes recognised by law listed below:

  • the relief of poverty;
  • the advancement of education;
  • the advancement of religion;
  • other purposes beneficial to the community at large; and
  • there is an element of public benefit.

What rules and procedures govern the establishment and maintenance of foundations and charities?

See above.

How are foundations and charities taxed?

Not applicable.

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