Investment management includes more than just purchasing and selling financial assets and other investments. For example, creating a short- or long-term strategy for acquiring and selling portfolio holdings is a management component. It may also cover banking, budgeting, and tax-related services and obligations.
So, are you planning to start your investment management business in the British Virgin Islands (BVI)? Here’s all you need to know about the process and the pertinent regulation.
The Parameters for a Company to Come Under an Asset Management Company?
In all actuality, the following activities constitute an investing business:
- Providing investment advice
- Providing administrative or managerial services pertinent to investments
- Managing third-party investments
- Dealing in or arranging deals in investments
- Functioning in an investment exchange
Investment Fund in BVI
The British Virgin Islands ("BVI") is a well-known and thriving destination for creating offshore investment funds in general and the second-largest offshore jurisdiction for hedge funds globally. Establishing investment managers and advisers in the BVI is a wise choice due to the flexibility of the BVI's alternative regulatory regimes for small to mid-sized hedge fund firms. This is only one of the many benefits that make the British Virgin Islands a top location for offshore hedge funds.
The Benefits of Investment Funds in BVI
Here are some advantages of the investment management company:
- The BVI Business Companies Act of 2004 combines solid corporate governance with a flexible corporate code.
- Compliance with the BVIs' opt-in regime under Alternative Investment Fund Managers Directive 2011/61/EU
- The regulatory environment for private equity and venture capital firms is more welcoming and has a "lighter touch."
- Uses the Approved Manager Regime and the specialized Approved and Incubator Fund products to market to smaller fund managers.
- Strong commercial court Affordable incorporation costs
Security and Investment Business Act
The Securities and Investment Business Act 2010 governs the regulation of investment business in the British Virgin Islands (BVI) (SIBA). It stipulates that to undertake any investment activity in or out of the BVI, a person must first get a license from the BVI Financial Services Commission (FSC).
SIBA applies to
- BVI entities carrying out investment business within or outside the BVI and
- Non-BVI entities carrying out investment business within the BVI
Before the passage of SIBA, only BVI entities that offered services falling under the category of mutual funds were needed to get the authorization mentioned above.
Consequently, the regulatory framework used to not apply to the investing business.
In 2010, a change was made in this.
How to Conduct Investment Management in the BVI
The BVI introduced the Approved Manager’s regime in 2012. This special license may be issued in cases where a full management license is unwarranted under SIBA.
To be classified as an approved manager, a licensee must:
- Be a BVI company,
- Have 2 directors (who needn’t necessarily be BVI residents),
- and Have a licensed, authorized representative in the BVI
In addition to managing or offering advice on funds outside the BVI in a recognized jurisdiction, such a certified manager may also contain or advise on private or professional funds identified under SIBA.
Would you like to establish an investment management business in the BVI?
According to the Securities and Investment Business Act, you must use authorized representative services in addition to company incorporation. BSW can help you with this, so do so.
Also, go through our guide on BVI Offshore Company Formation Rules to get an overall idea of the legal proceedings.
How Can We Help?
The most successful and economical way to launch a business is with the assistance of our team of seasoned experts. With Business Setup Worldwide, you may establish an investment company in the BVI with end-to-end regulatory support and consulting. Please don't hesitate to contact us; we'll help.
What is the incubator fund in BVI?
An incubator fund is one in which a maximum of 20 investors are allowed. Net assets may be most US $ 20 million. The fund must change to a different form at the end of its two-year validity period. An incubator fund typically has a two-year validity period.
What is the approved fund in BVI?
There is the Approved fund for fund managers who want to provide a private offering to a select group of investors over the long term. The maximum number of investors is 20, and the maximum net asset value is US$100 million. However, the fund is not needed to select an auditor, management, or custodian, and there is no minimum starting investment requirement.
What is the investment required for the professional fund in BVI?
What are the divisions of public funds in BVI?
Ordinary Mutual Fund Selective Mutual Fund