BVI VISTA trusts—common uses
Produced in partnership with Mourant Ozannes
BVI VISTA trusts—common uses

The following Private Client practice note produced in partnership with Mourant Ozannes provides comprehensive and up to date legal information covering:

  • BVI VISTA trusts—common uses
  • The prudent person rule
  • Excluding the prudent person rule
  • The VISTA Law
  • Further applications for VISTA Trusts

British Virgin Islands (BVI) trusts law is contained in the Trustee Ordinance, Cap 303 (as amended) as revised from time to time and the Virgin Islands Special Trusts Act 2003 (as amended) (VISTA Law) (the legislation is available in the further reading links to Spitz & Clarke Offshore Service in the related documents pod and on the BVI FSC—Banking and Fiduciary Services Legislation web page). The most commonly used application for trusts established pursuant to the VISTA Law (VISTA Trusts) is to hold shares (either directly or indirectly) in companies engaged in trading activities.

The prudent person rule

The use of trusts to hold shares in trading companies has been inhibited historically by the common law duty of prudence in relation to investments. This duty is often referred to as the ‘prudent person rule’ and in practical terms requires trustees to:

  1. monitor the activities of any company held (wholly or partially and directly or indirectly) subject to the trust

  2. supervise the conduct of directors

  3. intervene in the management and control of the company to preserve the trust fund

  4. enhance the value of the trust fund, and

  5. consider diversifying the trust fund

The essence of the prudent person rule is that while an individual or company may be prepared to take risks with his own property (often in the hope of generating an above-average return on investment), a

Popular documents