The British Virgin Islands (BVI) is one of the world’s largest offshore jurisdictions for hedge funds, as well as offshore investment funds. The level of regulatory flexibility on offer for small to medium sized groups makes it an attractive option for both investment managers and advisers.
An Approved Fund is a low-cost investment fund vehicle which brings together a small number of investors and is great. It is low-cost in terms of management and set-up fees, is subject to less stringent regulation, and has no minimum investment. With up to 20 investors able to partake and a maximum cap of US$100 million, there is no maximum period of operation as long as either the value of funds or number of investors is not breached.
If you think a BVI Approved Fund is for you, these are the steps you need to take to set it up.
Engage Fast Offshore
In order to set up an Approved Fund or any other kind of fund in BVI you need to engage a corporate service provider who have experience both in BVI and in the area of setting up funds. We have been active in the industry for over two decades and are well placed to guide you through the whole process, as well as to take care of any other business or personal considerations that you might have.
Appoint An Administrator
An approved fund is not required to have a manager, auditor, or custodian, but you are required to appoint an Administrator and an authorised representative.
Know The Requirements
Luckily, with a BVI Approved Fund there is not much in the way of requirements. You do not need to create an offering memorandum like you do with other kinds of funds. Other requirements include not exceeding 20 investors and ensuring the balance of the fund remains below $100 million. Should it go over this amount, you have seven days to remedy it, or change it to a more appropriate kind of fund.
You are then required to fill out an application form stating all information pertaining to the individuals and companies involved in setting up the fund as well as the name of the Authorised Representative, Directors, and Administrator. You should also include the CV of Directors involved in the Approved Fund, at the application stage. Also included, should be the constitutional document of the Fund, including a clear statement as to the fact it will be an Approved Fund.
Other documents to accompany the Application include the Certificate of Incorporation, Memorandum of Association, Articles of Association, investment warning, written description of investment strategy or an offering document, and the application fee of $1500.
Once the application has been sent, approval can be given in as little as two days.
Abide By Ongoing Requirements
Ongoing requirements including paying an annual fee of $1000 before the 31 of March each year. You are also required to have at least two directors at all times, one of which must be an individual. Should there be any changes to the information that you submitted to the Commission upon application, you need to update them immediately. You are also required to file annual financial statements and bi-annual returns but you don’t need to have them independently audited. If this sounds like a bit of a headache, don’t worry because Fast Offshore can help you there as well!
Contact us to find out more.