Fund Management Application in the British Virgin Islands

Fund Management Application, Legislation, Requirements and Expenditures in the British Virgin Islands (BVI)

There are two ways to obtain regulatory approval from FSC as an approved manager under the Securities and Investment Business Act 2010 or the Investment Business (Approved Managers) Regulations 2012. Investment Business Regulation 2012 offers a significantly simplified approval process.

You can set up a British Virgin Islands commercial company registered under the British Virgin Islands Commercial Companies Act (as amended) as an approved manager. Individuals cannot have an approved management license.

An approved manager can act as an investment manager, offering discretionary or non-discretionary advice to certain BVIs and foreign funds, in particular:

• private, incubator or approved foundations registered in the BVI or in a recognized jurisdiction in accordance with SIBA 1;
• private investment funds or funds incorporated under the laws of the British Virgin Islands with the characteristics of a private or professional fund 2 (the “BVI CE Fund”);
• persons associated with a private, professional, incubator or approved or BVI CE foundation;
• any foundations incorporated in a recognized jurisdiction with the characteristics of a private or professional foundation;
• foreign funds registered in an unrecognized jurisdiction with the characteristics of a private, professional or private investment fund that invest all or a significant part of their assets in a private fund, professional fund or BVI CE fund;
• other persons (person) approved by FSC on a case-by-case basis.

An approved manager, in the case of an open-ended fund management, cannot manage aggregate assets of more than USD 400 million. In the case of managing a closed-end fund, it cannot manage total assets of more than USD 1 billion.

Seven days after the submission of the application to FSC, the applicant for an approved manager license may start management activities unless FSC agrees to a shorter period in writing. Pending approval of the application, the applicant may pursue “relevant cases” for 30 days (or other extended period approved by FSC).

The approved manager must meet a number of requirements:

• the presence of two permanently appointed directors, one of whom must be an individual;
• a designated authorized representative who is FSC certified;
• mandatory notification to FSC of any matter that has or may have a significant impact on the approved manager or his “business”;
• submit financial statements, which do not require auditing, to FSC within six months of the end of the financial year and, in addition, submit an annual report (and renewal fee) by January 31 of each year.

We draw your attention to the fact that this article is for informational purposes only. For more advice, contact us at the contacts listed on the site.