The BVI is home to approximately one quarter of the world’s hedge funds, making it the second largest offshore jurisdiction for hedge fund formation. With a sophisticated Commercial Court for fast-track dispute resolution, an English common law legal system and a tax neutral environment, the BVI is the natural jurisdiction of choice for fund formation at a low cost.

In the BVI, investment funds can be structured as BVI business companies, limited partnerships, or unit trusts. The BVI also offers segregated portfolio companies as a regulated or non-regulated product. Open-ended investment funds are subject to regulation by the BVI Financial Services Commission (“BVI FSC”). Closed ended funds are not regulated in the BVI. Offshore funds specialists in the BVI provide expert advice on various types of fund structuring options.


  • Establishment and administration of funds
  • Structuring and restructuring advice
  • Regulatory and corporate governance advice
  • Ongoing advice to fund managers and promoters
  • Listings and ongoing obligations
  • Fund liquidation


Incubator Funds

The BVI Incubator Fund is a fund for start-up managers who want to build a track record to attract sufficient subscriptions to make the fund viable for the long term while keeping costs low. The fund must remain within the following thresholds:

  • have no more than 20 investors;
  • have a minimum initial investment per investor of US$20,000;
  • and have net assets not exceeding US$20 million.

Approved Funds

A BVI Approved Fund is another low-cost fund vehicle which allows a manager to bring together a small number of investors on a longer-term basis. This fund is cost-effective and designed to avoid the regulatory burden when establishing a small fund. An Approved Fund is restricted to:

  • a maximum of 20 investors;
  • net assets not exceeding US$100 million; and
  • unlike the Incubator Fund, the Approved Fund has no minimum investment threshold and no term limit.

Both Incubator Funds and Approved Funds benefit from a fast-track approval process that enable them to commence business two business days after submitting a completed application to the BVI FSC.

Private Funds

A Private Fund has no minimum initial investment amount. It may either have no more than fifty investors or must be offered on a private basis only.

Professional Funds

Professional Funds make up the majority of open-ended funds in the BVI and are aimed typically at professional investors or high net-worth individuals. The minimum initial investment requirement for an investor in a Professional Fund is US$100,000.

Public Funds

Public Funds have no minimum investment criteria. These funds are viewed as retail products and are generally subject to more extensive regulation than private or professional funds. A Public Fund is not only subject to regulation under the Securities and Investment Business Act 2010 (“SIBA”) but must also comply with the BVI Public Funds Code.

Private Investment Funds

New type of recognised collective closed-end investment vehicle.


Business Companies (“BVIBC”) - A BVIBC is a separate legal entity from its investors (whose liability is limited by statute). Shares do not need to have any par value or capital attributed to them. The directors may also designate different series within each share without need to amend the fund’s constitutional documents. Due to its flexibility, BVIBCs are the most commonly used vehicle.

Segregated Portfolio Companies ("SPCs") - A SPC is a single legal entity with the statutory ability to segregate assets and liabilities between segregated portfolios established within the company. The SPC can issue shares and declare dividends on its own account, as well as with respect to each individual segregated portfolio. As such, the SPC is a particularly useful vehicle for multi-class or umbrella funds which wish to offer different investment strategies to investors.

Unit Trusts - Unit trusts are suitable for a variety of investment structures, including the stand-alone trust and the umbrella trust. Under BVI law, a unit trust does not have separate legal personality and therefore is not entitled to the same statutory limited liability as other structures. Unit trusts are rarely used as fund structures. However, regardless of the structure, a BVI Investment Fund and its investors are exempt from BVI income taxes or capital gain taxes.

Limited Partnership Act (“LPA”) - The new BVI Limited Partnership Act has recently been updated to provide a modern and flexible partnership regime, in particular for those conducting investment activities. The LPA is innovative and will be highly attractive to Funds, particularly Private Equity Funds.

This new regime provides yet another option for persons looking to establish a fund structure in the BVI. The benefits of the updated LPA include:

  • Ease and cost-effectiveness of formation
  • Extensive flexibility and freedom of contract regarding the terms of the partnership agreement
  • Flexibility of legal personality
  • A high degree of flexibility for dealing with limited partners who default on capital commitments
  • Provisions facilitating capital call financing
  • Protections for managers/gps who manage a wide range of funds
  • Ability to publicly register security against a limited partnership with legal personality and to obtain priority under BVIlaw in relation to the relevant assets of the limited partnership as a result of the filing
  • Extensive safe harbour provisions for limited partners
  • Application of certain corporate law concept to limited partnerships, such as continuation, merger, consolidation, redemptions of minority interests and arrangements