BVI VISTA trusts—common uses
Produced in partnership with Alexander Way of Walkers
Practice notesBVI VISTA trusts—common uses
Produced in partnership with Alexander Way of Walkers
Practice notes
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 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:
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monitor the activities of any company held (wholly or partially and directly or indirectly) subject to the trust
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supervise the conduct of Directors
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intervene in the management and control of the company to preserve the trust fund
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enhance the value of the trust fund, and
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consider diversifying the trust fund
The essence of the prudent person rule is that while an
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Jurisdiction(s):
United Kingdom
Key definition:
Shares definition
What does Shares mean?
The CA 2006 merely provides that a share is a share in the company's share capital. A company's share capital comprises the number of shares issued by it to investors either on or after incorporation. Those investors then become the shareholders in the company. A shareholder’s shares are their personal property. By contrast, the assets of a company are owned by the company itself. Owning shares does not entitle a shareholder to any property rights in the company's assets.
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