Statement and guidelines dated 26 May 1987, issued by the BVCA and approved by HMRC on the use of limited partnerships as venture capital investment funds. Section 2, which is about the taxation treatment of individual partners involved in the management of the partnership, has been superseded by the Carry MoU.

The British Private Equity and Venture Capital Association (BVCA) has announced the expansion of the Investing in Women Code (liWC), which commits firms to helping female entrepreneurship in the UK, to include data on Limited Partner (LP) firms, with the Department for Business and Trade formally inviting BVCA to lead on data collection efforts for LPs. Alongside the announcement, BVCA has published a report on diversity and inclusion (D&I) in UK-based LP investment teams and provided recommendations for improvement in this area across the sector.

The British Private Equity and Venture Capital Association (BVCA) has updated its model documents for early stage venture capital investments, replacing the February 2023 versions.

Restructuring & Insolvency analysis: the BVI Court of Appeal ruled on directors’ duties to creditors when companies approach insolvency, ordering repayment of US$13m plus interest for breach of the rule in West Mercia. The judgment establishes that balance sheet neutrality cannot defend against claims for breach of fiduciary duty to creditors, and personal benefit is not required for remedy. Beyond the BVI, this decision reinforces directors’ accountability as stewards of company assets for creditors’ benefit, providing welcome clarity on duties during insolvency across common law jurisdictions including England & Wales, Australia, Hong Kong and Singapore and the rule in West Mercia. Practical implications written by Scott Cruickshank, partner of HFW.

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: • monitor the activities of any company held (wholly or partially and directly or indirectly) subject to the trust • supervise the conduct of directors • intervene in the management and control of the company to preserve the trust fund • enhance the value of the trust fund, and • consider diversifying the trust fund The essence of the prudent person rule is

British Virgin Islands (BVI) trusts law is contained in the Trustee Ordinance (as amended) (Cap 303, Laws of BVI) 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—Legislation web page). Trusts established pursuant to the VISTA Law (VISTA Trusts) are required to comply with certain prescribed formalities and may also include a number of special features made possible by the flexible and innovative nature of the VISTA Law. Express application The VISTA Law does not apply generally to all BVI law governed or administered trusts. In order to take advantage of the unique opportunities provided by the VISTA Law the author of the trust instrument must include an express provision that confirms its application to the trust being established. Such a clause may take the following form: While the proper law of this Settlement is the law of the British Virgin Islands it is hereby directed that the provisions

British Virgin Islands (BVI) trusts law is contained in the Trustee Act (as amended) (Cap 303, Laws of BVI) and the Virgin Islands Special Trusts Act 2003 (as amended) (VISTA Law). Trusts established pursuant to the VISTA Law (VISTA Trusts) typically hold shares (whether directly or indirectly) in a company engaged actively in some form of business (rather than passive investment holding) in an industry with which the trustee is not familiar and often in a location geographically remote to the BVI. The ability to deal with these challenging circumstances is what led to the design and enactment of the VISTA Law in the first place and makes VISTA Trusts such a valuable resource in an international wealth structuring context. This Practice Note addresses certain aspects of the management and administration of VISTA Trusts. Separation of trust and corporate governance The VISTA Law recognises that trustees are rarely natural entrepreneurs. On the other hand a settlor of a VISTA Trust may be a highly successful and enterprising businessman who is comfortable ceding ownership of his business

This Practice Note is produced in partnership with Josephine Howe, partner,and Grace Gao, counsel, both of Ogier. Key points For individuals who are not domiciled in the British Virgin Islands (BVI), but who personally own assets situated in the BVI, they may have a separate Will governed by BVI law to dispose of such assets and to facilitate the later probate process. Under BVI law, the applicable law for both the formal validity and essential or material validity of a Will of a foreign domiciled person depends on the nature of the assets. For immovable property situated in the BVI, the applicable law is the lex situs, meaning that of the BVI. For movable property, such as cash in bank, shares in BVI companies or interest in a BVI partnership, the applicable law is the law of the deceased’s last domicile. The situs of BVI company shares is determined by section 245 of the BVI Business Companies Act, 2004, which provides that: ‘For the purpose of determining matters relating to title and jurisdiction but not for

Restructuring & Insolvency analysis: A British Virgin Islands (BVI) law firm has been prevented from coming off the record as counsel to a sanctioned Russian bank and the receivers appointed by the bank could not be discharged without a license. Written by Nick Moser and Louise Jennings of Taylor Wessing LLP.

Arbitration analysis: The court held that respondent Arius made improper use of court procedures by introducing a Statutory Demand to compel payment on a disputed debt that had already been submitted to arbitration. The Insolvency Act governs use of Statutory Demands in debt disputes. Under § 157(1), the court must set aside a demand where there is a substantial dispute as to whether all or part of the debt is ‘owing or due’. Under § 157(2), the court has the discretion to set aside a demand to prevent ‘substantial injustice’. The pursuit of a parallel proceeding in relation to a matter already subject to arbitration is impermissible when used for an improper purpose, such as exerting pressure on the parties subject to arbitration. Here, the court set aside respondent’s Statutory Demand, finding that a substantial dispute existed as to the debt and that failure to set aside would further respondent’s improper purpose of exerting pressure on applicants in ongoing arbitration proceedings. Written by Charles H. Camp, president, and Meghan Briggs, law clerk at Law Offices of Charles H. Camp, PC, Washington, DC.

This Practice Note provides an introduction to the British Virgin Islands (BVI) in the context of offshore trusts. For general information about the BVI, see Practice Note: Private Client—British Virgin Islands—Q&A guide [Archived]. Geography The BVI is located to the east of Puerto Rico in the Virgin Islands archipelago known as the Leeward Islands and consist of the main islands of Tortola, Virgin Gorda, Anegada, and Jost Van Dyke, together with over fifty other smaller islands. The North Atlantic Ocean is to the north and the Caribbean Sea is to the south of the BVI. Road Town is the capital of the BVI and is situated on Tortola at the centre of the financial services industry. Government Ultimate executive authority in the BVI is vested in King Charles III. A resident Governor is appointed by the Queen on the advice of the government of the UK and exercises constitutional powers on her behalf. The BVI has its own constitution, the Virgin Islands Constitution Order 2007. Parliamentary elections are held approximately every

This Practice Note provides guidance on British Virgin Islands (BVI) trusts. For general information about the BVI, see Practice Note: Private Client—British Virgin Islands—Q&A guide [Archived]. Trusts law The trusts law of the BVI is contained in the Trustee Ordinance (Cap 303, Laws of British Virgin Islands) (TO) (as amended) and the Virgin Islands Special Trusts Act 2003 (as amended) (VISTA Law). The trusts law of the BVI is also based on the English law principles of equity and jurisprudence but there are significant statutory differences. English common law is of merely persuasive authority and BVI trusts law has been modified and abrogated in many respects. The features of the trusts law of interest to settlors are discussed below. Registration There is no requirement to register a trust or any trust documents with any formal register. Providers of trustee services resident in the BVI are registered and regulated pursuant to the Banks and Trust Companies Act, 1990 (BTCA) and are required to keep proper records and accounts and provide the same