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Private Investment Fund in the British Virgin Islands in the form of a company limited by shares. Service offer

A Private Investment Fund (“PIF”) in the British Virgin Islands represents a company, partnership, unit trust or any other legal entity registered, incorporated or created in accordance with the laws of the British Virgin Islands or other country, that:
(a) collects and pools investor funds for the purpose of collective investment and diversification of portfolio risk; and
(b) issues fund interests that entitle the holder to receive an amount computed by reference to the value of a proportionate interest in the whole or in a part of the net assets of the company, the partnership, the unit trust or other similar body, as the case may be.

Thus, a PIF may be created in the form of a company limited by shares with a special articles of association providing for

Contents

    1. two classes of shares:
    2. The following types of an investment fund may be created:
    3. An appointed person may be:
  2. FEES**

two classes of shares:

  1. Shares with voting rights and (optionally) a right to dividends – shares of this class are issued to the investment manager (who can also be appointed as director of the company) responsible for the management of the company’s affairs;
  2. Non-voting shares with a right to dividends – such shares are issued to investors who do not participate in the management of the company (for example, cannot appointremove directors), but receive income in the form of dividends paid out of the company’s total profit.
In addition to specially drafted articles, a Subscription Agreement and a Shareholders Agreement are drafted if there is a need to further regulate the relationship between the shareholders (which is especially relevant where investors receive voting shares or where a lock-up period for selling shares is to be put in place)

In order for such company to be deemed as a PIF, it is necessary to submit a corresponding application to the Financial Services Commission and attach the following documents:

  • copies of constituent documents of the fund;
  • a copy of the Certificate of Incorporation of the fund or a similar document;
  • if the Private Investment Fund issued or plans to issue an offering document or a term sheet, a copy or draft of such offering document or term sheet; and
  • a copy of the valuation policy of the fund.

The following types of an investment fund may be created:

  1. A fund designed for private investors only. The number of investors is limited to 50 and any invitation to subscribe for fund interests may be made on a private basis only;
  2. A fund designed for professional investors only. The minimum amount of investments will be 100 000 USD (or a greater amount applicable to the fund)
By default, a private investment fund shall prepare an offering document or a term sheet that will contain an offer for a potential investor to purchase or subscribe to shares/interests*. That offering document or term sheet should also contain the information concerning the type of the fund

A private investment fund should have at least two directors, and at least one of them should be an individual. The BVI laws do not set any requirements regarding the residency of the directors – a non-resident of the BVI may act as a director.

A private investment fund must at all times have an appointed person or persons who is or are responsible for undertaking:

  • the management of the fund’s property;
  • the valuation of the fund’s property; and
  • the safekeeping of the fund’s property, and specifically the segregation of the fund’s property.

An appointed person may be:

  1. An entity having a relevant license issued by the Financial Services Commission or a regulatory authority in a recognized jurisdiction;
  2. An independent third party with experience in performing the specified functions; or
  3. A director, partner or trustee of the private investment fund.
Each private investment fund shall prepare and submit audited financial statements to the Financial Services Commission on an annual basis

FEES**

Service
Fee (USD)
Formation (including drafting of non-standard articles reflecting the specific activity of the PIF)
5 500 (if the authorized number of shares is less than 50 000); or
6 000 (if the authorized number of shares is more than 50 000)
Drafting and filing an application for recognition of the company as a PIF and assistance throughout the procedure***
from 15 000
State fee for filing of a PIF application
700
State fee for recognition as a PIF
1 000
Drafting a Subscription agreement in accordance with the laws of England and Wales
from 2 500 (depending on the complexity of the agreement)
Drafting a Shareholders agreement in accordance with the laws of England and Wales
from 4 500 (depending on the complexity of the agreement)
Authorized representative for 1 year
2 900 (plus fees for the time spent on the negotiation with FSC during the next year if such necessity arises, at the rate of 200 USD / hour)
Annual renewal of the PIF (starting from the 2nd year):
Annual renewal of the PIF in the form of a company, not including the Compliance fee
4 500 (if the authorized number of shares is less than 50 000); or
5 500 (if the authorized number of shares is more than 50 000)
Annual state fee for recognition as a PIF
1 000
Authorized representative for 1 year
2 900
Advices, drafting of documents, negotiations with the FSC (if necessary)
300 USD / hour
Compliance fee.
To be paid in the following cases:
- incorporation of a company,
- annual renewal of the company,
- liquidation of the company,
- transfer to another agent,
- issue of a power of attorney to a new person,
- change of director / shareholder / beneficiary / investor, except for change to a nominal director / shareholder,
- issue of units for a new investor,
- signing of documents.
350 (standard rate – includes checking of 1 individual)
+ 150 for each additional individual (director, shareholder, beneficiary, investor) or legal entity (director, shareholder, investor), if the legal entity is a client of GSL
+ 200 for each additional legal entity (director, shareholder, investor), if the legal entity is not a client of GSL
350 (for High-risk companies, includes checking of 1 individual)
100 (signing of documents)

*If the private investment fund has not issued and does not plan to issue an offering document or a term sheet, then it should provide a reason for such non-issue to the FSC, and specifically it should explain how the relevant information and invitation or offer will be provided to potential investors.

**The fees are valid as of the date of sending of the offer.

***Not including the preparation of an offering document, term sheet, business plan, valuation policy.

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5500 USD
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