Investment Business Licence Application in the British Virgin Islands. Service offer

A licence must be applied for by:

Under Schedule 2 of SIBA, the licence is required for the following types of business:

1. Dealing in Investments

(a) Buying, selling, subscribing for or underwriting investments as an agent.

(b) Buying, selling, subscribing for or underwriting investments as principal where the person:

1. holds himself out as willing, as principal, to enter into transactions of that kind at prices determined by him generally and continuously rather than in respect of each particular transaction;
2. holds himself out as engaging in the business of underwriting investments of the kind to which the transaction relates;
3. holds himself out as engaging, as a market maker or dealer, in the business of buying investments of the kind to which the transaction relates with a view to selling them; or
4. regularly solicits members of the public for the purpose of inducing them, whether as principals or agents, to buy, sell, subscribe for or underwrite investments and the transaction is, or is to be entered into, as a result of the person having solicited members of the public in that manner.

2. Arranging Deals in Investments

Making arrangements with a view to:

(a) another person (whether as a principal or an agent) buying, selling, subscribing for or underwriting a particular investment, being arrangements which bring about, or would bring about, the transaction in question; or

(b) a person who participates in the arrangements buying, selling, subscribing for or underwriting investments.

3. Managing Investments

(a) Managing investments belonging to another person in circumstances involving the exercise of discretion (other than as manager of a mutual fund).

(b) Acting as manager of a mutual fund.

4. Providing Investment Advice

(a) Advising a person on investments (other than as the investment adviser of a mutual fund) where the advice:

1. is given to the person in his capacity as an investor, or a potential investor, or in his capacity as agent for an investor or potential investor; and
2. concerns the merits of the investor, or a potential investor, doing any of the following (whether as principal or agent):
   1. buying, selling, subscribing for or underwriting a particular investment; or
   2. exercising any right conferred by an investment to acquire, sell, subscribe for, underwrite or convert an investment.

(b) Acting as the investment adviser of a mutual fund.

5. Providing Custodial Services With Respect to Investments

(a) Acting as custodian or depository of assets belonging to another person, other than as custodian of a mutual fund or trustee of unit trust, where:

1. those assets include investments falling within paragraphs 1 to 6 of Schedule 1; or
2. the custodial (or depositary) arrangements are such that those assets may consist of or include investments specified in subparagraph (a) (i) and the arrangements have at any time been held out as being arrangements under which investments would be safeguarded.

(b) Acting as custodian of a mutual fund.

(c) Acting as the trustee of a unit trust.

6. Providing Administration Services With Respect to Investments

(a) Administering or arranging for the administration of assets belonging to another person (other than as administrator of a mutual fund) where:

1. those assets include investments falling within paragraphs 1 to 6 of Schedule 1; or
2. the administration arrangements are such that those assets may consist of or include investments and the arrangements have at any time been held out as being arrangements under which investments would be administered.

(b) Acting as administrator, registrar or transfer agent of a mutual fund.

7. Operating an Investment Exchange

Providing a facility, whether by electronic means or otherwise, for the orderly trading of investments or for the listing of investments for the purposes of trading, by members of the investment exchange.

Based on the said activities, SIBA provides for the following categories of licences:

Sub-category A: Dealing as Agent

Sub-category B: Dealing as Principal

Sub-category A: Managing Segregated Portfolios (Excluding Mutual Funds)

Sub-category B: Managing Mutual Funds

Sub-category C: Managing Pension Schemes

Sub-category D: Managing Insurance Products

Sub-category E: Managing Other Types of Investment

Sub-category A: Investment Advice (Excluding Mutual Funds)

Sub-category В: Investment Advice (Mutual Funds)

Sub-category A: Custody of Investments (Excluding Mutual Funds)

Sub-category В: Custody of Investments (Mutual Funds)

Sub-category A: Administration of Investments (Excluding Mutual Funds)

Sub-category В: Administration of Investments (Mutual Funds)

Currently, a licence application can only be submitted by companies that have not yet commenced investment business which is subject to licensing*.

BVI companies that had started investment business BEFORE the enactment of SIBA should have made their submissions for the licence by 31 December 2010, otherwise such companies were no longer permitted to carry on investment business after that date.

Assessment of applications and grant of licences fall under the authority of the BVI Financial Services Commission (‘FSC’). After SIBA was adopted, the FSC was instructed to develop Application Forms for investment business licence and the necessary guidelines which are now available on the FSC’s official website.

*The licence application process hereinafter described applies to companies that have never before carried on any investment business.

1) Application for an Investment Business Licence on Form F100 (with necessary attachments);

2) Form A (to be completed for each director, shareholder, and Compliance Officer) together with attachments; for the directors and shareholders the following is also required:

• certified passport copies and proof of address;
• CV;
• police clearance certificate;
• diplomas and certificates showing the required level of qualification and education;
• reference letters (Bank Reference, Professional Reference, Personal Reference).

The directors and shareholders must satisfy the FSC’s “fit and proper” criteria: these individuals need to have sufficient knowledge and qualifications to carry on investment business, must not have had any criminal record or have been bankrupt at any time in the 10 years preceding the submission of the Application.

Bank Reference is a letter from any bank to confirm that the director or shareholder holds a personal account at that bank.

Professional Reference is a reference letter from a business partner demonstrating that this partner has known and worked with the director or shareholder in a certain business sphere for a significant period of time.

Personal Reference, or Character Reference, is issued by any individual who knows the director or shareholder and can judge about their personal qualities.

An applicant company must have at least 2 directors who meet the FSC’s criteria.

3) Signed Consent Letters (consent to be appointed and act in certain capacity) from the Auditor and Authorized Representative;

The applicant must appoint an Authorized Representative who will represent the applicant before the FSC if the applicant does not have own office or staff in the BVI. Appointed as Authorized Representatives are normally local law firms or the registered agent of the applicant company.

Both Auditor and Authorized Representative must be approved by the FSC in the course of assessment of the application.

4) Draft Compliance Manual describing “Know Your Client” procedures;

The applicant must develop a specialized procedure to identify its potential clients and a separate set of anti-money laundering and terrorist financing measures. To address these tasks, the applicant must provide for the FSC’s approval the candidates for the staff to perform such functions.

5) Detailed Business Plan describing the proposed business, company’s objectives, business management structure and resources which would allow the company to do business;

6) Statement of Paid-Up Share Capital saying that the share capital has been paid up or will be paid up by the start of business;

7) Financial Risk Insurance Certificate / Policy.

The documents submitted to the FSC should preferably reflect the following:

• Do the company’s directors/employees have sufficient expertise and experience to carry on investment business?
• How will the company be dealing in foreign currency markets?
• How will the company keep and record its client’s funds?
• How will Due Diligence in relation to clients be preformed?
• Where will the company’s offices be situated and what will their functions be?
• Where will the company open accounts?
• Does the company have sufficient funds to carry on investment business?

The FSC has a right to request from the Applicant any additional documents or clarifications on the documents already submitted. Having assessed the application and the supporting documents, the FSC can at its sole discretion refuse to issue the licence to the Applicant.

After the licence is granted, the company will be obligated to prepare and file audited financial statements. The start and end dates of the first financial year must have been completed on the Application for a licence and approved by the FSC.

The holder of the licence must also get the FSC’s prior approval to any of the following:

• Appointment of any new director or senior employee;
• Change of shareholder or issue of new shares;
• Change of company name;
• Opening of branches and representative offices, setting up of or purchase of shares in subsidiaries.

The FSC can also impose on the holder of licence a duty to regularly provide complaint reports registering clients’ complaints or can request any other information about how the investment business is carried on.

[1] The fees are valid as of January 2025

[2] For 1 (one) category of licence, including such licence fee